Non-payment of rent insurance: avoid problems

Tenants who cannot pay and landlords who cannot afford the expenses. Covid-19 has exacerbated the Spanish housing drama and due to the economic crisis and the decrease in income derived from the health crisis, communications due to non-payment have increased by 70%.

Faced with this situation, both the owner and the tenant have a series of rights that it is important to know in order to resolve this uncomfortable situation in the best possible way for both parties.

Non-payment insurance: the best solution to face possible problems with the rent

The best solution to deal with non-payments is to anticipate them and take out non-payment insurance. This figure has been experiencing a real boom in recent years in Spain and the Spanish Observatory for Rental Non-payment Insurance foresees that In 2021, 30% of new rental contracts include non-payment insurance.

Through non-payment insurance linked to the rent, a fee is paid to the insurer so that, in the event of a hypothetical non-payment, it is responsible for the payment of the rent during the months in which the payment cannot be met. The duration will depend on the hiring, but as a general rule they do not exceed twelve months.

Reach an agreement with the tenant to renegotiate the rent

In the absence of non-payment insurance, the best possible solution for both parties is to renegotiate the rental conditions. As long as the deal is in good faith, you can agree on the reduction of the fee for a few months, or extend the situation over time, plan a repayment of the debt …

What It is never convenient for the tenant to stop paying at all, because in that case and without having non-payment insurance, the owner must take advantage of a eviction procedure, a process that benefits neither party. The tenant, because they will forcibly evict him from the house, and the owner because it is a very long process, which means that the delinquency situation is maintained over time.

Therefore, the best option is try to regain possession of the property by reaching an economic agreement, or reduce the amount of the rent.

File an eviction claim in case of non-payment of rent

Theoretically, From the month of non-payment, an eviction lawsuit can be filed. Under normal conditions, eviction should be the last solution, but in the current situation, in addition, the tenant is protected as long as he proves to be in a situation of special vulnerability as a consequence of the Covid-19 crisis, banning launches.

This decree will have effect in practice until September 2021. However, evictions continue to take place, at the evaluation of the judge studying the case. The problem with this decree is that it does not establish any complementary measure for the owner who is not a bank or a large holder and who, therefore, may also be left in a vulnerable situation as a result of non-payment.

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