When the payment of the monthly rent for business premises is delayed, the lessors are often interested in seeking the termination of the agreement with the tenant instead of continuing the lease relationship with said tenant.
The Spanish Urban Tenancy Act 29/1994, of 24 November (Ley de Arrendamientos Urbanos, hereinafter the “LAU”) allows lease agreements to be terminated in the case of defaulting on the rent, without specifying whether the late payment of the rent can be considered as grounds for terminating the contract.
Likewise, the Spanish Civil Procedure Act 1/2000, of 7 January (Ley de Enjuiciamiento Civil, hereinafter the "CPA") establishes the possibility of ending the eviction process of a process due to the tenant defaulting on the rent, if prior to the court hearing, the tenant pays the lessor the amounts sought in the action. This power cannot be used by the tenant when eviction has been avoided by a late payment on a previous occasion.
This impossibility for second or subsequent avoidance of eviction by late payment allows the defaulting tenant, who fails to pay his rent and only meets his obligations when an action is filed with the courts, to be penalised.
The problem comes when a tenant after having avoided eviction by late payment delays the payment of the rent a second time.
Jurisprudence has been contradictory in this area, as on the one hand, the Provincial Courts have found on many occasions that defaulting on the payment of rent in the period stipulated in the lease agreement is a mere delay and cannot lead to such a serious penalty as the termination of the agreement, and at other times they have deemed that the delay in payment of the rent is sufficient grounds to terminate the agreement and therefore leads to eviction of the tenant.
The Supreme Court ended the disparity of criteria in the jurisprudence of the Provincial Courts when it issued its decision on 24 July 2008, where it declared as jurisprudence doctrine that “(…) the payment of rent outside the agreed period does not exclude the applicability of the reason to terminate the lease envisaged in the Spanish Urban Tenancy Act (Ley de Arrendameintos Urbanos) and that is true even if that petition is based on the defaulting of a single month’s rent and it has been paid extemporaneously (…)”.
The Supreme Court understands that the urban lease agreement is for value and commutative and the first obligation of the tenant is obviously to pay the rent. On the other hand, unless the parties had agreed that the payment for the income occurred as one-off payment, the agreement is a continuing obligation and defaulting on a single monthly payment of rent can be grounds for terminating the contract.
This jurisprudence has been recently followed in rulings such as the Decision of the Supreme Court of 26 March 2009 and the Ruling of the Provincial Court of the Balearic Islands on 20 July 2010.
In conclusion, the mere delay in the payment of the rent is sufficient grounds to order the eviction, and therefore, the current criterion of the most recent jurisprudence establishes that the delay in the payment of one month's rent is grounds for terminating the lease, which enables and entitles the lessors to terminate the leases whose tenants pay the rent outside the established period.