Those of you who have spent a long time here in Spain will probably already know exactly what a ‘community of owners’ is and how it operates. But there are many people for whom it is a big surprise and something which they have never come across before.
A community of owners is a legal entity made up of all the property owners in the same building or urbanisation and is governed by the rules and by-laws agreed by them. While it is not physically an independent legal person, it retains many of its features, which enables it to perform certain legal transactions, such as operate a bank account and contract for services etc.
Those of you who have lived in a block of flats in the UK may be more familiar with the idea, as you will have been responsible for paying service charges in respect of the building’s common areas such as gardening, lifts and lighting. These areas and costs relate solely to that building, which means that the local council won’t be responsible for their upkeep or bear the cost. Instead, the costs have to be shared amongst the individual owners.
However, for those of you who have only ever lived in a house, this concept is probably a completely new one.
Here in Spain, it isn’t just flats and apartment blocks which are affected, but any property which is part of a development, otherwise known as an urbanisation. This means that the property owner does not only own their home, but also a share of the communal parts of the building or urbanisation, including entrance halls, passages, lifts, terraces, gardens, sports facilities (such as swimming pools and tennis courts) and sometimes even the roads.
In general, the only properties that don’t belong to a community of owners are detached houses built on individual plots in public streets or on rural land.
When you buy a community property you automatically become a member of the community of owners and this applies to two-thirds of foreign property owners in Spain.
So it is of upmost importance to find out exactly how being a part of a community will affect you and what it will add to your monthly or quarterly costs of maintaining your home abroad.
In Spain, where there is a community of owners (called a ‘comunidad de propietarios’ in Spanish), there is a law which governs how these costs and the running of the community shall be carried out. This is known as the Horizontal Property Law (‘Ley de Propiedad Horizontal’ in Spanish), and this applies in all areas of Spain, except Catalonia. In addition to these laws, specific statutes are drafted by the community of owners governing the organisation and minimum standards expected of residents, landlords and tenants alike. For example the swimming pool timetable, security measures and colours of external walls, types of fencing etc. In many cases these serve to set standards and avoid conflicts of interests which may otherwise arise.
The main points of interest governed by these laws are:
- Property owners are required to represent their community as presidents or secretaries. Communities can establish criteria through their bylaws for regulating the rotation of duties, length of service required etc.
- Every owner is obliged to contribute to the cost of the community in accordance with their share as established by the horizontal law of division.
- An Annual General Meeting shall be held at least once a year to approve the budgets and accounts. Other meetings may be held (by request of the Chairman or owners, but subject to certain criteria).
- A property buyer is responsible for the seller’s outstanding debts with the community of owners on the date of purchase which is why the seller is obliged to provide a certificate of debts, unless they are expressly exempted from this obligation by the buyer. Your solicitor will be able to advise you on this matter and is in fact obliged to inform the community of owners of any changes in ownership.
- The day to day management of the community is usually carried out by an Administration Company (‘Administración de Fincas’ in Spanish). The Administrator shoudl be registered on the "Colegio de Administradores de Fincas" (Official Association of Administrator) as a guarantee of knowledge, quality and good performance.