Legal tip 682. Banks need to pay Community of owners fees
Saturday, January 14, 2012 @ 11:53 AM
From the Forum today:
Do Banks have a legal obligation to accept ALL debts relating to the property upon repossession and become liable for those debts, even if there is an outstanding mortgage?
Not all debts but those with the Community of owners corresponding to year of repossession and year before. Rights linked to the outstanding mortgage will be realised by the Bank by public auction: they will be recovering all or a substantial amount of the debt through this.
Obligations of the new owner ( bank is the owner of those properties in the interim from repossession to adjudication in public auction) needs to be covered irrespective of outstanding mortgage. These are two different legal concepts which do not interfere one with the other.
Where does Spanish Law stand on this? Obligation of new owner with Community of owners is stated in provision 9.1.e of the Horizontal Property Act. New owner owes to pay any outstanding debt of year of acquisition and previous
Also in the case of claims against individual owners who refuse to pay their debts, isn’t there a small claims route that can speed up this process for communities (and also prove more cost effective?) Yes: the monitorio is a small claim procedure, unfoatuantely not too effective and quick. Hope new government with the announced reforms of Justice change this.
It appears so unfair for communities to be continually burdened by these debts and the costs involved in gaining recompense. Is this yet another area where consumer protection is lacking in Spain and needs to be reviewed? It is not a matter covered by Consumers Law but it certainly needs Judges to consider that Banks are acquisitors of properties since embargo and therefore their obligations to pay start then.
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"Sierra Nevada", Granada, Spain, by enric archivell, at flickr.com