Community charges - who pays the short fall

Hi Claire

The banks or whoever will never take on utility or patronato or whatever debts of previous owners ~ why should they?

It is essentially the function of the purchasers solicitor to make sur all these things are cleared.

Any new owner will (or should) start afresh with the electric or water company and enter in to a new contract.

Unfortunately before the new owner can start a new contract all debts against the property must be paid. The utility company can do this because even if the new owner knew nothing about the arears  their choice is Do you want water/ electric or don't you. You do so you pay. ~ So "because they can"!!

Your recourse is against the solicitor who did not do their job properly. You can probably sue them and win but you will be able to buy a mercedes convertible with what it will cost you! and you will be too old to drive it when you get the judgement. So pay up and look happy.

The obligation of the new owner (be it bank or whatever) in regard o community charge is to pay current year debt and previous year debt. A stupid law because if you buy in December you are saddled with 24 months debt whereby wait until January and the debt halves. Generally speaking the banks do not rush to register the property thereby giving the community a chance to find them. They try to sell on to a gullible buyer and saddle them with the debt. A lot of this is illegal but your choice would be spend the money to fight it or buy a sunseeker yacht to tow behind your new Mercedes.

Some of the posts here are hard for me to understand because some people are speaking about developers , empty apartments etc.

If the complex has an opening and occupation licence and a community is formed every apartment has an owner (even if the developer only sold 5 out of 10 he is still responsible for the community charges on the 5 unsold.

The developer or bank or whoever are bound by the horizontal laws the same as every individual owner.

Overall the laws are quite fair but they may as well not be there because they can't be easily utilised.

The sun shines it's January and warm!

You may as well leave your brain bouncing around on the carousel at Luton airport and enjoy it.

 

Dave

 

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Ladies and Gentlemen,

David Nicholson has laid out the cold unpalatable truth, clearly and concisely for all to see.

My personal thanks to him for clearing up so many enigmas.

There is a law in Spain and it does work, everso slowly, everso costly, everso painfully.

The question is:- Do we have the time and money to persue it?

The answer is:-  CAVEAT EMPTOR (you pays yer money, you takes yer chance)

Back to the sunbeds folks this party is over.

Cheers

Leo

 

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The moral of the thread is, if you are thinking of buying in a community, check not only that the individual property is free of debt, but also the state of the community's affairs. Find out who the administrator is and go ask for a copy of the annual accounts and the minutes of the last agm. If they are reluctant to provide the info, there's probably a problem. There's probably a problem anyway. Our adminsitrator runs 25 communities, and has only two (ours included I'm happy to say) that have NO debts. He has one community where 100% of owners are debtors. Complete disaster. At the risk of sounding a bit Jeremy Clarkson, if I had my way I'd have the law changed to make non-payment a capital offence and have them all lined up and shot.

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Sad but true Story

Perfect advice and I would add to it by saying walk around the community. You can soon see if there is spirit of pride. If the pool is dirty, the walls neeed painting and the gardens overgrown it's best to walk away.

Capital Punishment is a little excessive although radical changes to the law protecting owners who often gullibly buy believing everything the agent or solicitor says. This applies doubly to owners who let their dream home because the taxes etc are rising every year. The rental agent will say anything to rent it  but when the tenant defaults never wants to know and the police could not care less. 

The law or effective policing of the laws is inadequate it seems the "perceived" rich foreigner can stand it. I know the economy in Spain is in the s**t but it would be much worse without foreign purchasers or maybe not, but there would be far more donkeys and less porsches.

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 Hi,

 

Fighter 2 are you talking about one of the golf resorts near Los Alcazeras?

 

prima

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 Answers below in bold green:

Do Banks have a legal obligation to accept ALL debts ( just community of owners debts of year of acquisition and before) relating to the property upon repossession and become liable for those debts, even if there is an outstanding mortgage? Yes, rights linked to the outstanding mortgage will be realised by the Bank by public auction. Obligations of the new owner ( bank is in the interim from repossession to adjudication in public auction) needs to be covered irrespectively. Those are two different legal concepts which do not interfer one with other. The outs Where does Spanish Law stand on this? Obligation  of new owner with Community of owners is exposed in provision 9.1.e of the Horizontal Property Act

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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If Spain wanted to improve its tarnished image it would introduce better ENFORCEABLE laws to protect consumers with a route to timely justice that doesn't cripple the claimer (via effective small claims courts), before claims get too large and too much of a burden for communities. It seems as though the rule in Spain is, if you can get away with it then play the game. This psychology might suit some but it certainly doesn't work for the majority who are looking for an enjoyable and less stressful future. There are already too many insecurities that are sadly working against the welfare of the consumer in Spain so why not try to correct them (not with rhetoric I might add but action!)?

Perhaps that is an impossible pipe dream in Spain? One thing for sure, it needs to get its act together quickly if it wants the better  educated public (via forums such as EOS) to invest in its shores. It's not just about getting a cheap deal in Spain it's about how much it realistically costs thereafter and how secure you feel in your new environment. Ignorance is no longer bliss I'm afraid.

 (Our postings crossed Maria, so thank you for your explanations).

 

This message was last edited by ads on 14/01/2012.

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Thank you all very much for your very helpful contributions.

I am the current President of a Community of 40 apartments.
The community has outstanding debtors totalling 25% of this year's budget.
The debtors are 6 apartments, 4 of which are with a bank.
Some debts have been building for nearly 2 years old.

I will be most grateful for answers to the following questions:

1. Is it possible to register the total debt owed by the present Owner of an apartment against the property at Land Registry?

2. If so, what is the procedure?

3. How expensive is it?

4. How long does it take?

5. Does registration of the debt assure the Community's interests if and when a property is sold?

We have tried to limit the expense of running the Community.
One of our resident Owners acts as Caretaker, cleans the communal areas and maintains the pool as well as doing small repair jobs.
He receives a small honorarium for doing this - what a Diamond!

One debtor lives in UK.
I have telephoned, written and emailed and have obtained agreement for a Direct Debit arrangement commencing this month.

Another debtor lives in Russia and refused to receive a registered letter because the name of the street was not precisely correct.
Since then I have discovered the correct email address but my messages remain unanswered.

I have asked our Administrator to try to obtain written agreement from the bank to guarantee the mounting debts in respect of the 4 apartments they have taken over from the developer.
I think I may need to make my own direct approach.

Is the problem with the banks that low interest rates do not allow sufficient income for them to pay their dues?
It is diffficult to justify.
Many of our Owners are finding things very difficult.

DaiO

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 Hi,

 

Can the community administrators write into the community rules recovery of non payment, espeacially when those bad debtors either live on the resort or rent out their properties?

Seems to me the only way to collect from these people is intimidation of the people in the property (renter or owner) or of the property its self, which is not ideal, but something needs to happen other than the debt be loaded onto payers.

 

regards,

 

prima

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I think that Prima's suggestion of intimidation is probably very much against the law.
It would hardly be fair to target tenants of Owners who are in debt to the Community.

It would be very helpful to know if it is legitimate to add the costs of pursuing debtors to their debt.
Is it reasonable to set a standard figure for each time the Community demands payment?
Is it possible to add a rule to the Community's Normas (rules) to allow interest to be added to an outstanding debt?

We had an instance where a tenant's teenage daughter was inviting all the young lads in the village to come to use the pool.
It appeared that many of these young lads were the ones who had been vandalising the Community.
When they were reluctant to leave, the Guardia Civil were called.
They advised us that if the Normas were not published on a sign and did not limit the number of guests allowed by each apartment, we could do nothing.

It would seem then, that the Normas are very influential, but what limits apply to the Normas a Community can make?

It is disappointing that the peaceful enjoyment of resident Owners is so often unreasonably disprupted by the acts and behaviour of tenants or 'guests' of other Owners.
It is difficult enough to 'police' behaviour within the Community.
It can even become dangerous.
Nobody wants their Community to turn into a perpetual battleground.

DaiO.

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Respect your opinion Oakley,

 but it is hardly fair that those debtors advertise the benefits of the community and continue to earn, then blatantly refuse to contribute to the running of that community, that is totally in the face of those that pay on time every month!

 

The idea of intimidation would be a last resort, but if all else has failed are we payers just expected to pay increased fees? Iam not suggesting anybody step outside the law, but there are ways of removing the earning opportunity so those owners who refuse to pay, so they will get it in the ear from returning renters.

 

If community charges increase that community will only increase its number of debtors, if it reaches that point its a no win situation.

 

prima

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I agree with Prima in principle.

I believe that the Community has the right within the Law of Horizontal Poperty to restrict debtors from using communal facilities.
Unfortunately that option is not a practical one for many Communities.

2 of our debtors continue to earn from their properties at the expense of Owners who pay their contributions as they fall due.
Many of our Owners are retired on fixed and in some cases very limited incomes.
It is just not fair, but the law does not appear to offer a Community a cost effective way of evening the score.

Intimidation was used half a century ago in London by unscrupulous landlords to gain vacant posession of tenanted properties.
It even has a name - Rackmanism.

All too often those tenants to suffer would have nothing to do with the debtor.
They have just as much right to the peaceful enjoyment of their rented home as any Owner in the Community
It would be very unfair to victimise them.

All too often, the wronged are those who attract the attention and even disbenefit of the law which seems so frequently to favour those who expect a free meal ticket.

I would dearly love to hear that the Normas may provide an answer in the long term.
Communities may then be able to be authors of their own advantage.

Does someone have some advice on that possibility please?

DaiO

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It is now possible for the President or managing agent of a community to recover debt from any debtor in Spain in any EU country that  the debtor is resident.

In fact our company Wincham Legal Ltd is acting for many communities in Spain recovering debt in the UK. We can issue proceedings against UK residents, obtain judgement and recover using Baliffs,Sherrifs or obtain attachment of earnings orders and even charging orders on UK assets.

It should be remembered that even if the owner has surrendered their property to the bank we can still recover outstanding debts in the UK courts.

If you are a President of a community and would like to talk about our low cost debt service, then send me a private mail.

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 Hello malcroach,

 

Thanks for the info, I have forwarded the message to our admonistrator.

 

regards,

 

prima

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And what about debts that are incurred by Spanish residents and Spanish Banks who have repossesed properties? Does the same procedure and speed of application apply to them also in Spain? It would be unfair for procedures to recoup monies to be one sided in their application. Perhaps you can clarify malcroach.

 

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I am sure that there is a difference between the relative speed with which the law can be brought to bear on private and corporate debtors.
The latter are no doubt sharper at protecting themselves from claims brought by non-profit-making Communities who are essentially relatively impoverished.
It is probably also true that the law will castch up with the little chaps long before it gets to grips with the developers and their like.

When we first agreed to buy our apartment through Parador and a Promoter, neither of whom have survived, we were advised that it is extremely unwise to try to take a Spanish developer through the courts unless you have sufficient finance behind you to go right through the system to the highest court in Madrid.
Our Community opted to pay for works including. the securely gated perimeter wall, to bring the complex up to the standard we were shown in the promotional literature and had agreed to buy.
There was much sole searching and discussion.
Spanish Owners were unwilling to contribute on the basis that, being a little more streetwise than their British neighbours,  they had waited and agreed to buy what they saw.
They had no expectations based on the 'pipe dream' of illustrations derived from the architect's plans.
I showed the architect round when he came to inspect the development before 'signing it off''.
I explained that many aspects were deficient.
He explained that if he did not sign the building off, the final Certificate of Habitation would not be granted and without which no occupants would have been able to open utility accounts - a famiar story to many I am sure..
That route leads to no services when ultimately the developer withdraws builder's services.

It dawns on me that if debtor Owners are deriving an income from their properties, they are probably advertising them somewhere.
I understand that it is permissible to exclude debtors from using communal facilities.
They should not therefore be permitted to advertise their properties as having the benefits of communal facilities.
Yes, it would be very difficult or impossible to enforce.

I sense that the secret is not to allow debts to build.
It is that aspect which Communities expect administrators to address and because of the reluctant President syndrome, they get away with it.

If UK resident Owners become debtors, it may be because they do not know how much they are expected to pay, how and when.
I think it is the duty of a non-resident owner to find out how much to pay and to how pay it - Ask.
The Law of Horizontal Property requires that Community notices are sent/delivered to an address at the Community or elswhere in Spain.
I do not think there is a requirement to publish notices in any language other than Spanish unless the Community has voted that the language of the Community will be other than Spanish at an General Meeting.
I am sure that many non-resident owners find that they have become debtors without realising their responsibilities.
Our Community voted at an AGM to notify all non-resident Owners about the AGM and to send the minutes.
Notifications were sent out later and later and by surface mail.
Many envelopes were incorrectly addressed .
The result was that some Owners have never received a communication from the Community and others only 4 or 5 weeks after the meeting had taken place.
The administrator now appears to have decided that the minimum compliance with the Law will do and delivered notices for the last AGM to the letter boxes at the Community.

There are so many issues to be addressed by me as President in an effort to make it clear and as easy as possble for all Owners to pay what and when they should that it seems an uphill struggle.
Clearly administrators will be as cost conscious as any other business in respect of their own running costs if they are allowed to be.
It makes me feel like Mr Nasty as I try to re-establish procedures which were all agreed by the Community as a whole.
The root problem is one of a lack on continuity I am sure.

I would still welcome some pointers on the details, procedures, costs and times associated with registration of debts at the Spanish Land Registry.

DaiO.
 

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Very good post, and I concur with almost all of what you say. The only part I'm not sure about is: "I understand that it is permissible to exclude debtors from using communal facilities". My understanding is that it is NOT permissable to exclude debtors from using communal facilities - although I very much believe that it absolutely should be not only possible, but law.

As for taking on developers / builders etc., in our community it is actually the reverse situation in as much as it is primarily the Spanish owners who want to do this, although as in your situation, it is those who bought off-plan and feel agrieved that they didn't get exactly what they expected or that there are some defects in the building. Those of us (like myself) who bought second-hand (albeit prior to completion of the buidling) are more ready to accept that what we got was more or less what we expected, and also that in this part of the world to expect top quality construction is ludicrous - especially if the property was thrown up in the height of the boom. Having never seen the ridiculously optomistic artists' impressions of Kew Gardens in the brochure that some owners still like to flash about (8 years on) I really couldn't give a fig if our geraniums aren't in full bloom. As for the defects, the most serious of these was the flooding garage everytime it rained. It has taken 8 full years of suffering to finally persuade the other (mostly absentee) owners that it is utterly futile to consider taking the developer, builder or town hall to court to resolve the issue - not least because it would cost us a small fortune (that we obviously don't have) even to get to the point of proving which of the above is actually culpable. In the end it cost each owner somthing like 200€ to get the problem solved. Totally wrong that we shoud have had to cough up a single cent, of course, but at the end of the day, sometimes you just have to give in to the reality.

Your comments about administrators ring very true with me too (as a president). From my experience, the very fact that these so-called professionals claim to belong to a professional body and (laughablly) have supposedly even passed some sort of mickey mouse exams to be able to pass themselves off as having something like a clue about what they are supposed to do, I find quite insulting. But the alternative of course is for the president to take on even more responsibility and give up even more of his/her time for nothing (least of all any thanks). So again, one has to roll with the punches.

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Ads - I believe the Spanish and Danish governments did not sign upto the EU legislation which allows Kettlewell or the likes to go after the debts.

DaiO - At your AGM you have to vote to take the debtors to Court. The Administrator then lodges the appropriate paperwork to the courts. This has to be done each year for the previous years debt as far as I know. All costs to do this are added on to the owners debt - i dont actually know how much this costs as our community aren't charged for this. We also add a percentage onto the unpaid fees, think it is 15%, for late payment.

Communication is the key. Speak to the owner if you can and explain the difficulties it causes and try to get upto date contact details for all owners - email addresses as well if your administrator is not posting agendas abroad.

Legally you can display the AGM minutes on your complex, which include the properties with debts. This is the nearest you can get to naming and shaming and this is where locked display cabinets come in handy.

Make sure that there is a zero tolerance approach by your committee to debtors and that this is communicated to all owners via the AGM minutes and that you will use debt collectors such as Kettlewell if necessary and that all costs will be charged to the debtor.

You can install electronic access to the pool and not give debtors a card but tell them they must go to the administrators for a card. Then the administrators get to speak to the debtor direct and hopefully get them to pay by bank card there and then. I would think this would get good results when they have rented apartment out the renters have no pool access.

There will always be someone who doesn't pay though but you could embargoe and force the sale of the apartment. We've never gone that far -YET. It is a constant battle but give them an inch and they'll take mile.

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Roberto, thank you very much for your comments.
I understand your frustrations very clearly.

If you think these sort of problems are limited to Spain, then please think again.
I have just retired as a director of a company owning a freehold with more than 20 dwellings held on leases and a budget of mor than twice that on which we operate in Spain with twice as many apertments.
Someone likened the UK system to the lunatics running the assylum.

Although the British interest in our Community is just over 58%, it is the Spanish Owners who seem to have greatest influence unless a special effort is made to spur the British interest.
We are fortunate that our Spanish Owners are generally very reasonaable now that things have settled down after 6 years.

I have not had a stem to stern read through the Horizontal Property Law lately but will take a copy to bed with me tonight. I could do with a good sleep.

You may well be right about denying use of communal facilities to debtors. That probably referred to Owners who have not contributed to the cost of an additional facility.

The real problem here appears to be that a few debtors can ruin the atmosphere of a whole Community if not turn it into a battleground.

DaiO

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 It is necessary to have a University degree and pass an exam to be a registered Property Adminisrator in Spain.

On procedures for the claim: It needs to be firstly agred in the Community meeting ( either ordinary or extraordinary) then, a monitorio procedure is necessary ( if debts are lower than 250k), by which you bring the claim to the Judge and once the basic elements are verified by him, he gives 20 days to the debtor to pay the debt or oppose its payment.

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