Landlords Afraid of non-Paying Tenants Take Pre-Emptive Measures

As read on the Sur newspaper, more than 9,000 landlords have adopted in their tenancy contracts the Arbitrage System which allows eviction associated costs to be cut down significantly. Malaga is the Andalousian province in which this practice has been most successful. More than 8.980 Tenancy Agreements uphold the arbitrage system should one of the parties breach the contract i.e. non-payment.

This system was created back in 2004 and allows to significantly reduce both the associated expenses as well as the necessary eviction time compared to a normal court procedure (which normally averages at least 10 months). However, this system only works if both parties, tenant and landlord, abide the mandatory Arbitral Award something which does not always happen as non-paying tenants may only buying time with no real intention of paying the arrears.

The Arbitral Court guarantees that the case will be examined within 30 days, often even less. The main advantage would be the swiftness in which the arbitral award is obtained. This is particular important in cases in which the landlord offsets the rent against his mortgage repayments.

To apply for it is only necessary to request it in one of the 120 real estate agencies of Malaga province which are homologated by the Arbitral Court or simply including it as a clause in the Tenancy agreement waiving the ordinary court procedure. It only costs 42 Euros plus a further 300 Euros in case of a protracted conflict. A normal court procedure would have an average cost of at least 2.300 Euros. The second advantage would be the considerable amount of money it saves the landlord.

Another option available to the Landlord is to hire a Rental Insurance which cover the event of the tenant defaulting until he is effectively vacated from the property. These insurance companies will request the tenants’ payslips to ascertain their financial ability.

More information on the subject can be found on our article Letting in Spain: The Safe Way.

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Larraín Nesbitt Lawyers is a law firm specialized in taxation, conveyancing, inheritance and litigation. We will be very pleased to discuss your matter with you. You can contact us by e-mail at info@larrainnesbitt.com, by telephone on (+34) 952 19 22 88 or by completing our contact form.

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