Commercial Eviction and Contract Resolution in the Canary Islands

Governed by the Civil Procedure Act (LEC), which entered into force on 8 January 2001, managing commercial defaults in the Canary Islands requires immediate legal action due to the specific tax framework of the archipelago. Under Spanish Law, landlords do not need to wait for a contractual "cure period" or serve a formal termination notice before filing for eviction (Desahucio) in court for non-payment of rent, although doing so via Burofax is a strategic necessity to block the tenant's right to stop the process.

1. The IGIC "Tax Trap" for Landlords

In the Canary Islands, commercial invoices are subject to IGIC (Impuesto General Indirecto Canario), usually at a 7% rate for property rentals (Ley 20/1991). This creates a significant financial risk for landlords during a tenant default:

• Accrual Basis Obligation: The tax accrues (devengo) when the rent becomes demandable according to the contract (Ley 4/2012). The Canary Tax Agency requires landlords to declare and pay the IGIC regardless of whether the tenant has actually paid the rent.
• Tolerating delays means the landlord is effectively financing the tenant's tax liability out of their own pocket, as the tax must be paid to the government even if the income has not been collected.

Filing for eviction as early as the first month of default is the only way to stop the accrual of further tax liabilities and initiate the recovery of the premises.

2. Blocking the "Enervación" (Burofax Protocol)

Under Article 22.4 of the LEC, commercial tenants have a one-time right to "enervate" (stop) an eviction by paying all outstanding debts in court. However, landlords can block this right:

To secure an inevitable eviction:

• Send a formal Burofax with certification of content and acknowledgment of receipt (acuse de recibo) claiming the exact debt.
• The demand must be sent at least 30 natural days before the lawsuit is filed (Art. 22.4 LEC and Art. 5 Civil Code).
• If the tenant fails to pay within this period, they lose their right to enervate the eviction, meaning the court will proceed with the launch (lanzamiento) even if the tenant attempts to pay the debt later during the judicial process.

3. The "Juicio Verbal" for Commercial Eviction

Once the Burofax period expires (or immediately if the landlord chooses to skip it), a civil lawsuit is filed in the Juzgado de Primera Instancia.

The procedure follows the "Juicio Verbal" rules (Articles 437, 438, and 440 of the LEC):

• The Letrado de la Administración de Justicia (LAJ), not the judge, issues the decree (Decreto) admitting the lawsuit and the summons (Requerimiento) granting the tenant 10 business days to oppose the lawsuit, pay, or vacate.
• Crucially, the specific date and time for the Lanzamiento (Physical Eviction) must be included in this initial summons (Art. 440.3 LEC).
• If the tenant does not oppose or pay within the 10-day window, the LAJ issues a final decree terminating the process and confirming the previously scheduled lanzamiento without further judicial orders. The judge only intervenes if the tenant files a written opposition, leading to a trial and sentence (Sentencia).
• On the scheduled date, a judicial commission, often accompanied by a locksmith and the police if necessary, will physically remove the tenant and return possession of the property to the owner.

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