Penalties and Late Fees in Aragon Contracts

In Spanish and Aragonese residential property law, the Urban Leases Act (LAU) governs the general lease structure, but it is silent regarding late fees. Penalty clauses are instead governed by the principle of freedom of contract under Article 1255 of the Civil Code, subject to Article 1108 of the Civil Code and Article 85.6 of the General Law for the Defense of Consumers and Users (LGDCU). While late fees are generally enforceable if agreed upon, they are void if deemed "disproportionately high" or abusive under consumer protection standards.

Ordinary Demands for Payment and Management Fees

According to Article 17.2 of the Ley de Arrendamientos Urbanos (LAU), rent must be paid within the first seven days of the month, unless the parties explicitly agree to a different payment period.

Furthermore, under Article 20.1 of the LAU, landlords are prohibited from charging tenants for real estate management or contract formalization fees in residential leases. These costs must be borne exclusively by the landlord.

Penalty Clauses and Default Interest

Under the Spanish Civil Code, parties can stipulate penalty clauses (cláusulas penales) or default interest for delayed payments. However, Article 85.6 of the LGDCU voids any clauses that impose disproportionately high compensation on the consumer for failure to fulfill their obligations. These must be reasonable and proportional to the harm caused by the delay to be fully enforceable.

Explicit Contractual Agreement

For a landlord to legally enforce a late fee or default interest, it is mandatory to explicitly document this provision within the written lease agreement.

Proportionality and Limitations

Penalty clauses must maintain proportionality. Courts generally look to the official legal interest rate of money (interés legal del dinero) as a benchmark for reasonableness. For 2024/2025, this rate is set at 3.25%. Stipulating excessive penalties may be annulled or modified by a judge if challenged as abusive under Article 85.6 of the LGDCU.

What if the Contract is Silent?

If the lease agreement does not explicitly state a penalty or interest rate for late payment, Article 1108 of the Civil Code applies. In this case, the landlord is only entitled to claim the official legal interest of money for the period of delay, which is 3.25% for the 2024/2025 period.

Eviction for Non-Payment

Eviction for non-payment is subject to strict procedural requirements under Article 439 of the Civil Procedure Law (LEC), as amended by Ley 12/2023 (Housing Law). An eviction lawsuit must:

• State whether the property is the tenant's primary residence.
• State if the landlord is a "Large Holder" (owning more than 5 or 10 properties, depending on the zone).
• Certify whether the tenant is in a state of economic vulnerability via a social services report.
• For Large Holders, prove that a prior mediation or conciliation attempt was made with the vulnerable tenant before filing the claim.

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