Comments on the Judgment 787/2020, of 4 November. Barcelona Provincial Court
This Judgement, which establishes very important principles on lease contracts interpretation, arises from a procedure in which the plaintiff claims from the defendant the payment of a certain sum of money, due to the damages existing in the leased property at the time of its return.
To this end, the plaintiff directs her action not only against the two tenants of the property, but also against the joint and several guarantor of both.
When resolving the conflict, the Provincial Court establishes several principles, which can be summarised as follows:
Firstly, the Audiencia recalls the obligation of the lessee to return to the lessor the rented dwelling or premises at the end of the lease «as it was received, except for what has perished or has been damaged by time or by an unavoidable cause».
Furthermore, a double presumption iuris tantum (i.e. presumptions that can be rebutted by proof to the contrary) is also established: on the one hand, the tenant is presumed to have received the dwelling or premises in good condition at the beginning of the lease; and, on the other hand, the tenant is presumed to be at fault in the event of deterioration. The burden of proof to the contrary to rebut both presumptions rests with the lessee.
An important fact at this pont lies in the definition of “receiving in good condition”, which doesn’t mean receiving the dwelling “new”, but in the same condition in which it was received, admitting certain deteriorations due to habitability over time or due to unavoidable causes, by virtue of articles 1.562, 1.563 and 1.564 of the Spanish Civil Code.
All that the Provincial Court clarifies in this Judgment is understood, however, without prejudice to what has been agreed between the parties, who may establish, by mutual agreement, what they deem appropriate in the clauses of the contract.
In addition, the Provincial Court recalls the principle followed by the Supreme Court, when provides for compensation in the event of damage.
«It is reasonable to take into consideration the circumstances of the damaged property in order to reduce the compensation, for reasons of equity and to avoid unjust enrichment, considering as such the dilapidated condition of the property (…) or other similar aspects that detract from it».
This principle is intended to limit the cost of compensation, taking into consideration factors such as the age and condition of the rented property.
Finally, the principle we consider the most innovative and important (and, perhaps, the most technical-legal) lies in the perspective that the Barcelona Provincial Court holds on the joint and several surety in favour of a non-lessee third party, and its possible lack of standing to sue (that is, the impossibility of being sued in the process).
The Judgement, in order to verify wheter the liability of the joint and several guarantor can be extended to the object of the proceedings (compensation for damage caused by the lessee), and, thereforo, be considered a co-defendant, states that it is commonly accepted doctrine that the bond is not presumed, in accordance with article 1.827 of the Spanish Civil Code, but that it must be express and cannot extend to more tan what is contained therein.
In this way, in order to verify the scope of the bond, the Court establishes the obligation to attend what was agreed between the parties (by virtue of articles 1.091 and 1.255 of the Spanish Civil Code), both with regard to the contractual duration and the bonding clause. The Judgement established, as settled doctrine, that «in order to ascertain the intention of the parties, the entire contract must be taken into account, and not a clause isolated from the others».
Furthermore, according to the commonly accepted doctrine, it is provided that the guarantee clause must be interpreted in a restrictive way, for the debtor’s benefit, as a principle and general rule in the interpretation of contracts.
It should be noted that, in the lease contract object of this Judgment, one of those co-defendants was established as a joint and several guarantor in the following terms: “constitutes (…) himself (…) as personal and joint and several guarantor and for all purposes guarantees the tenants in the lease (…) taking responsibility for any non-payment that may arise”.
In the opinion of the Provincial Court, that clause doesn’t expressly extend the responsability to the fulfilment of all obligations, only to monetary obligations; and extending this liability to a non-monetary obligation (such as, certainly, the obligation to maintain and return the rented property or premises in the same state in which it was received), would violate the principle of restrictive interpretation of the bond, in favour of the debtor.
Therefore, the Provincial Court considers that liability cannot be extended to the joint and several guarantor in this case.
In the lease contracts that we draw up at BUSQUETS, we always recommend expressly detailing the obligations of the parties (lessor, lessee and possible joint and several guarantors), in order to avoid what happens in the present case: that, by not correctly foreseeing the extension of the responsibilities of the other party, the lessor may be harmed by a possible non-payment by the debtors, not being able to claim the fulfilment of non-monetary obligations from the joint and several guarantor, whose responsibility would have been extended if the clause in the contract had been drafted correctly.