Community charges - who pays the short fall

Hi Mike,

Stephen Kettlewell is stephan@communityfees.com is the guy you need to contact for all owners who reside in europe excepting Spain and Sweden, you don't pay him he adds his fees onto the debtor. We have had many owners pay once threatened by court action in their own country. You have got to play hardball with these people as they are spoiling it for the rest of your community.

good luck

 

 

Mo

 

 

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Is there any reason why communities can't increase the community fees, say by 100%, but then give a discount of 100% to all those who pay on time.  Thus punishing those who don't pay and rewarding those who do ?

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Hi Costapacket - we actually add 20% for late payment, but if you can't get people to pay in the first place then an extra fee won't be paid either!

We have recently started using the UK based dept collection agency and suddenly our President has been flooded with emails and phone calls from people we had never been able to contact!  It is early days, but we are very pleased with the results so far and our debt is slowly reducing.  We also have had a mixed response from the banks, who own a lot of our properties - some have paid in full and others pay nothing. 

Thankfully we are beginning to see more and more of the empty properties being purchased, so that is injecting a bit more life into our community and easing the debt problem at the same time.   

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It is an extremely frustrating situation that responsible owners find themselves in when they see other owners enjoying all the facilities and not paying a penny. December is our year end and we have to carry forward a debt of €134,445. This debt increases on 1st January to €147,889 because we add a 10% surcharge.

I have calculated that our high risk exposure on this debt (i.e. Money we can't charge to the new buyer be it bank or whatever) is €61518. But this high risk amount increases to €92,605  over night simply because of the law.

For example. An owner has €10 a month community charge and a €240 debt. If a new buyer buys the apartment on 31st Dec he is legally obligated to pay €240, all the debt because the law states he pays current year and previous year.(24 months)

If the new buyer buys on 1st Jan he is obligated to pay on the same basis but the amount payable is €120.

The community is then obliged to claim the balance of €120 on the seller who they have been trying to claim from for over two years.

Not reasonable, not fair, not logical !!!!

We tried the UK debt collection route and found zero success. The agency simply took commision on money that would have been paid anyway. No court action was started or any other route used in fact promises made by them to us never materialised.

If you can contradict me and point me in the direction of someone succesful in this field I would appreciate it.

I am told by our administrator that we are doing everything we can and it is because the courts are so slow. Maybe that's true. Debt collection (unless you are the hacienda !!!) is not easy.

My advice (for what it's worth from someone who has failed miserably in this field) is start action against debtors sooner rather than later, make their life as difficult as you can (within the law of course), publish debtors lists so everyone knows who the debtors are and can treat them accordingly.

Make sure the debtors are aware of every move you make against them by sending burrofax and charging them for this privilege (obviously you may just add to your debt).

Be as hard as you can and do everything you can within the law.

If anyone has any advice or has found a better way please, please let me know.  Thanks

 

 

 

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You seem to be doing most things but we

1.Changed the locks to the main gates and key fobs and only issued to the payers

2.Switch of the water to the properties

3.Put notices on there doors every week

4.Wheel clamped any car in the debtors parking space

5.Changed the lock on the debtors storerooms

6.Added 50 euros per month to the debt

they soon started to pay again

G

 

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Hi and thanks so much for your reply which I will discuss with our administrator however I think most are illegal.

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So is not paying your debts

Time to get tough some wont pay and some cant you find the wonts still like to visit and the donts dont care and just want to forget about it.

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Hi, So sorrry to hear of your problems, it does appear that all communities have problems.

Have you tried taking the Spanish owned ones to the small claims court in Spain (anything under €9000). Stephen Kettlewell has been succesful on our community in collecting debts of other European owners. We have also taken one property to auction that was last February, we are still awaiting the money from the courts, we are dealing with this too, we are going to take the local court to a higher court in Grenanda, because they have deliberately kept passing our judgement from one Judge to another, especially as we will miss another years community fees.

Yes it does take an awful amount of time, and yes it is very frustrating, but set your goal, and stick with it, find ways round obstacles, there are lots of forums out there who have loads of experience. Believe me I have used this site so many times, and have had so much help.

Good luck.

Mo

 

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Many thanks for your reply. Much appreciated.

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Hi - regarding the situation when a property is sold and there is a debt to the community.  The selling agent should obtain a certificate from the Administrator showing the full debt to the community prior to the sale.  The debt should be paid either before the sale, or from the proceeds of the sale, along with any debts owed to Suma, elec and water, so that the buyer gets a property free of debt and the community is paid in full.

Hope that helps.

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Hi Claire,

What you say is true but in my experience it does not always happen! There are some very crafty persons out there!

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Yes of course this should happen and only doesn't when the solicitor is inefficient (which is too high a percentage) however the point I am making is that the community is able to claim from a new buyer the last 12 or 24 month debt, WHY?

Because the law states that you can claim the current and previous years debt, So that could be ~ if bougt in Dec 24 months. If bought in January 13 months.

So an apartment with a charge of 10 per month and a debt of 240 (2 years) is sold on 31st Dec. The debt transfered to the new owner is 240.

If the new owner waits 1 month and buys in January the debt transferred is 130. (current and last year)

More so regardless of this if it is a repossesion the bank will pay to the communit the minimum it can get away with.

 

Ok I love it here, it's January and the sun is shining but this sort of thing really pi****s me of.

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We had an owner who never paid a penny of community fees. The administrators annually logged the curent years debt with the spanish courts as agreed at each AGM. Eventually the property was repossessed by the bank. We didn't get paid the full amount of the debt as there was a mortgage on the property. Our administrators kept telling us we would get the full amount back but we didn't. So we have a debt of 2500 which will never be repaid unless we can track the individual down, which we can't. If there is a mortgage on the property and there is negative equity the mortgage debt gets priority over the community debt. However in saying all this our administrators now say 'the law has changed' and now the community can apply to the courts for something that gives the community priority over the mortgage. Anyway I am just telling you all this so others can make sure their administrators get that documentation to make the community debt top priority!

We have used Steve Kettlewell with some success.

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 Yes, of course Claire is correct, but what SHOULD happen and what DOES happen are two very different things.

When a vendor sells or indeed is forced to sell by the mortgage co. or bank, the only other person involved is the Notary.

It was always my understanding that the Notary should inform the community Administrator of the sale.

I was advised that this is only necessary if there is a debt to the community.

My question was " How does the Notary KNOW of any debt?"

I was then told that IF the purchaser accepts ALL debt liability, then the Notary does not need to advise the Administrator.

This transaction seems wide open to abuse from my point of view.

In the case I am discussing the bank repossessed, but we as a community did not know of the repossession.

We had no idea that the owner, whom we never saw, had relinquished ownership.

We had no idea who the new owner was. Naturally they wanted to remain below the parapet for as long as possible.

In this scenario it is quite impossible for the community to recover outstanding fees.

The system is unclear and appears to be unregulated. (assuming always that the administrator is being honest)

I suspect under the present situation in Spain or indeed Europe, there will be little change in the foreseable future.

All that can be done is to keep on trying and never give up. 

I hope someone can prove me wrong, very soon.

Cheers

Leo

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Thanks Leo

Yes pretty much my understanding and so frustrating. Has any one tried a debt collection agency? (Except Steve Kettlewell) or an aggresive specialist solicitor who may have a fast track through the courts they could recommend?

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 YES Please an alternative debt collector would be much apreciated.

The Kettle seems to have gone to ground. We don't get any response anymore.

He did great work initially to clear up a bunch of small debts but the big one is still at large.

There is an international firm called INTRIM Justicia. Alas they will only work directly with companies.

So your Administrator must register with them (in Madrid). Once registered they can use them for any case.

Including all other communities on their books. there is a charge but for small amounts it is minimal.

Spread over many owners in several communities it would be pennies.

Only for huge debts is there a more substantial charge (I think 10%).

It seems a good bet for Administrators to engage them, but my experience is that Administrators never seem to be over anxious to collect community debts. (Haven't yet figured the reason why) probably cost. Hmmnn...

Cheers

Leo

 

This message was last edited by leoleon on 09/01/2012.

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Thanks again ~ yes our expectation when appointing Steve Kettlewell was perhaps too high but the only debts we recovered were debts that we would have got anyway. I will ask our administrator to try INTRIM and let you know how we get on ~ Dave

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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? Where does Spanish Law stand on this?

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?)  

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?

 

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Hi Ads - we have had battles with one of the banks about accepting all the debts on properties.  They accepted the community debt and paid for it - which is good news for this thread - but refused to even try to find out about the utility debts.  They said that their position was that the buyer should take out new contracts on both water and electricity, therefore starting with a clean slate.  The buyer however had to pay for these new contracts.

Any decent agent will always check for all debts on properties and make sure they are either cleared before the sale or that enough money is retained for the buyer to pay them all off, but we had to admit defeat on this and accept that the buyer had to pay for the new utility contracts. 

 

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 Hi All, I saw you are having big problems at Polaris world.

I saw very discounted prices for the apartments for sale, right now, nad was start looking into this.

 

do you think these mngt problems are really big?

would you recommend buying now or even if prices are hugely discounted you would sincerely not ?

 

thanks everyone for your proactive aptitude.

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