Purchasing Appartment

Hi,

I am expecting to purchase an appartrment here in the next week or so, all looks good, is there any negatives that you can advise me on, before I take the plunge, it is quite a big step for me, are the communal fees good value, and what do you expect tp pay this year, thank you

Gordon

Did you not fancy La Tercia ?

Hi,

Did not manage to view the complex, although the prices are great,

Hi Gordon,

Community fees in my block on Phase 1 range from €1200 to €1500 per annum. Fees are dependent on apartment size. Fees for next year will be set at the AGM in March.

I consider the fees good value when compared to the fees I pay for my apartment in Manchester which are £2200 per annum. Especially when you consider that pool maintenance and cleaning, refuse recycling and 24x7 security are included. Things I don't have in Manchester or pay for via separate council tax.

If you have visited Las Terrazas you will have seen that the resort is kept in immaculate condition. 

There is likely to be a one-off charge this year to build a fund to keep the resort maintenance funded while unpaid community fees are recovered from the developer. Again the amount will depend on what is agreed at the AGM and whether the individual blocks decide to use the painting fund or emergency fund to offset these charges.

It should be noted that this is not an increase in community fees but a one off charge to build a fund to keep the community liquid. As money is recovered from the developer either via property sales or via the courts, this money will go into the fund and reduce future maintenance costs. It should also be noted that the developer recently paid a sum of cash and handed over some property to the La Torre community to cover their debt there. I would think there is a reasonable chance of our community receiving similar settlement at some point in the future.

Hi Duncan,

Thanks for your response, much appreciated, I am looking at a one bed in phase 1, they look great, and hope to take the plunge next week. just a bit concerned re additional costs, do you have any idea what the one off costs could be, and will it be a one off payment ? Can you shed any light on the goverment tring to get extra tax from the owners who have bought at greatly reduced prices from the banks?

I just want to ensure I am going into this with my eyes open, any info re this would be appreciated,

Regards

Gordon

HI Gordon, the community fees as they stand are I believe good value. But as I understand they are to increase substantially over the next year or so to cover for the shortfalls in our budget due to outstanding depts owed mainly by the developer. I have not heard of a one off payment, this may well be the case but news to me. I assume all will be revealed at the next ago in March. 

Regards Andy phase 1 block 28

Hi Gordon,

Just to re-emphasise, community fees will NOT be increased substantially. There will however be an extraordinary payment to the "Polaris World Bad Debt Emergency Reserve" fund that is being built to cover for lack of liquidity due to Polaris World's non-payment of their community fees . This is not a community fee increase to cover for a shortfall in budget, just a fund to maintain liquidity while outstanding debt is collected. As the debt is collected, it will be paid into the fund and hopefully giving a surplus and reducing fees in subsequent years.

As per my previous post, it is impossible to say what payments will be asked for as they will vary by block. Each block has its own painting fund and emergency fund. It may be that the block you are buying in will use these funds to offset the payment to the "Polaris World Bad Debt Emergency Reserve". The amount will be calculated following the completion of the end of year accounts for the community.

Like I said in my previous post, Polaris World have settled their debt to the La Torre Community. Our Community are pursuing Polaris World for the outstanding debt via the legal system and hopefully we can get a similar result.

In short, its not all doom and gloom, but there is a hole in the accounts due to Polaris World not paying their community fees. Whether they will eventually pay some or all of the debt is open to debate. They have been paying down some of the debt as they sell their properties. They also paid off all their debt to La Torre. Their debt to Las Terrazas de la Torre is much smaller than that owed to La Torre. This is well known and has been well known to every purchaser on Las Terrazas for years. It's all in the price as the saying goes.

Here is a good article on the Tax question. The bottom line is that if the price you pay is less than the Hacienda's valuation of the property you may have to pay tax on the difference. The Cadastral value on my Nota Simple is way below the price I paid for the apartment in March last year so I am not expecting the taxman to come after me. Even if they do, I would expect to win any appeal as I have ample documentation of market rates for similar properties and sales at the same time.

I have heard that some who bought four years ago were pursued and some appealed and won their appeals. This may be because the Hacienda's values had not been realigned to the reality of the post bubble property market at the time they bought. Your lawyer should be able to advise on your property. When I asked my lawyer they said "yes it is possible that during the next four years the Tax Office could send a letter asking for pay more taxes. If we received a letter like this or any other letter from the Tax Office or the Town Hall, we will send you an email in order to let you know and to see how to proceed."

So, clear as mud 

Hi Duncan,

am I missing something here? At the block presidents meeting in October we were informed that community fees would increase considerably anything from 50 to 70% depending on block and may last 2 or 3 years with the hope they would reduce year on year. This was also repeated in the then Community Presidents news letter.

know one is saying everything is doom and gloom. I've owned my apartment from the beginning approximately 5 years now and seen the resort continue to grow and flourish. We love spending our time their and would encourage anyone to consider joining our community, but unless something has changed regarding the fees that I am not aware off then I am expecting our fees to increase in this next financial year. 

Kind regards

Andy

Hi Andy,

I am going from the minutes of the meeting which I still have and am happy to share with owners. They said there would be an extraordinary payment to build the Polaris World Emergency Debt Fund which could be between 50%-70% but would not be determined until the accounts were completed at the end of the year. The minutes said that the amount could be offset if individual blocks decided to use their painting fund or emergency fund to offset the charge. They also said that any debt recovered would be credited to owners to reduce fees in future.

There has been some speculation that there may have to be be a smaller additional payment next year but this would depend on factors such as how many Polaris World properties are sold, the results of our legal action or even whether Polaris World go bust. However, this has not been agreed as far as I am aware.

In my view this is not the same as a permanent substantial increase in community fees going forward as your previous post implied. I don't think anyone is arguing that there won't be an additional extraordinary charge this year or that there might not be the need to provide more cash to the fund in future.

I have asked the president for clarity on the above.

Hi Duncan thanks for your reply. I too have gone from the minutes of the block presidents meeting on 24th October 2015.

appreciate it states it will be an extraordinary increase/payment to build up a fund. But as I understand this will be increasing our fees for a period of time therefore our quarterly community charge is going to increase.The way I read your interpretation is that we are going to make what seems a one off payment. Would be nice to have some clarity. Assume once all accounts have been finalised and budgets set we will learn what our contributions will be

kind regards andy

Andy,

It's probably not the best place to discuss private matters that relate to owners. However, the definition of extraordinary is:

1. Beyond what is ordinary or usual
2. Highly exceptional; remarkable
3. Employed or used for a special service, function, or occasion

An extraordinary payment is a one-off payment to cover a special circumstance.

The minutes say

"This reserve is not already closed, but it will include: sum of all debts, excluding those being written off plus anticipated 2016 shortfall and pass cost to all owners. The Blocks would be able convert paint fund and non-statutory SC reserves into their share of GC Special reserve (reduce fee increase)."

To me this means that the fund that is built with the extraordinary payment will cover all existing Polaris World debt plus all anticipated Polaris World debt in 2016.

There is no mention in the minutes of this being a permanent increase to community fees. There is also no mention in the minutes that there may need to be further extraordinary payments. Of course there is speculation that there may need to be further extraordinary charges to cover Polaris World's non-payments in 2017 and beyond, but if they were to materialise they would be nowhere near the charge required this year to pay for 5 years worth of Polaris World debt i.e. the previous 4 years plus 2016.

The amount of PW annual debt is reducing as they sell properties and their outstanding debt is paid off every time they sell an apartment.

For me this does not match your interpretation that community fees "are to increase substantially over the next year or so" or "that community fees would increase considerably anything from 50 to 70% "

Like I said, I have asked the President for clarity, but to be honest, he doesn't have a crystal ball.The only thing that is certain is that there will be an extraordinary charge this year to build the fund and we won't know what it is until the AGM. This is exactly what I said in my initial response to Gordon.

Hi Duncan thanks again for your reply. If you wish to carry on this conversation that's fine with me drop me an email with pleasure and we can continue our discussion. 

Good news from the latest newsletter. Anticipated extraordinary payment is likely to be average 20% of community fees rather than the 50%-70% surcharge mooted above. Payment to be added to normal Q2, Q3 and Q4 payments.