Community charges..... non-payers....direct action?

I would like to publicly apologise to Solutions for any (unintended) offence by my previous post. He has, as he says, in fact offered to meet (he sent me a PM) but like I said before, we are in the fortunate position of having absolutely no debtors in our community.

I'm certain, however, that there are others here who do, so it would be very interesting if someone came forward to take him up on his offer - no win, no fee, so what is there to lose?

Roberto,

Thank you very much - I really appreciate that.

Libby,

Summons is in UK. Enforcement can take place in UK or Spain. Depends on where the best assets are.

Is nobody interested in looking in to this any further? How about all those who have complained about bad payers in their communities?

(We don't have any, not since I got myself a nice big stick spiked with nails!)

Hi Roberto

This is worth looking into and when Karesun is back from the UK, I am sure she will pick up on this.

Or, she may have been shopping in the UK and bought a wooden stick with nails in like yours!

Hi Roberto,

Our community is looking into this as I have passed the information on to our president who is investigating the possibilities. Main issue at the moment is if this will have any impact on the current court proceedings that have been instigated in Spain. The president is not sure if we can  process claims additionally in the UK - waiting for our lawyers to advise. Perhaps Solutions could best advise.

Regards

John

I hope Solutions is still watching this topic - I have a couple of questions. Anyone else is welcome to answer of course.

Quote: "Summons is in UK. Enforcement can take place in UK or Spain. Depends on where the best assets are."

What happens if there are no assets?

If a debtor owes community fees and the community pursues the matter through the courts, with a favourable result, we are led to understand that if there are no other assets, the court can order the sale of the property, and the debts can be paid from the proceeds.

First question: since notaries now require sight of a letter from the community confirming there are no outstanding debts, how can the property be sold before the debts are paid off? Who would actually buy a property knowing there are debts outstanding? I'm guessing a representative of the community (president) would have to be present at the signing in the notary, in order to receive the community's share of the proceeds, in order for such a sale to take place.

Second question: what happens if there is an outstanding mortgage on the property that will not be covered by the sale price? (i.e negative equity) This must be a very real possibilty at the present time. I presume a mortgage, which would have been registered against the property at the time of purchase, takes precedence over any other debts? So even if the court orders the property be sold, surely any proceeds from such a sale would have to be used to cancel the mortgage before any other debts are taken in to consideration? But what if the sale price doesn't even cover the debt to the bank? If a bank repossesses a property due to unpaid mortgage arrears, they may wish to sell it even for less than the amount lent, just to cut their losses on their stupid, irresponsible, reckless toxic sub-prime loan, but in this case, what happens to other debts owed on the property? I presume the bank would still have to pay the community dues before they can sell it?

I imagine a lot of community debtors now are also threatened with repossession from the bank. In such a case, surely it will be more complicated for the community to recover the debt quickly?

Roberto

Just a note on your first question

When we completed on our house a couple of weeks ago, our Lawyer had deducted all outstanding amounts owed from the vendor from his proceeds. The community charge hadnt been paid this year so we in effect had from Jan1 to feb 10 paid back to us and then we owed the charge from 1st Jan.

Like wise a proportion of electric and water for the same period was charged back to the vendor.

There was no representative of the community at the Notary

Steve

I think you may find that your fees are due quarterly, in which case, January and February are not actually overdue yet.

Nevertheless, interesting and surprising. I would understand if the lawyer asked you to present one cheque to the vendor for the sale price less the amounts owed, and another cheque for the outstanding community fees made out directly to the community. That way, the notary could be satisfied that the debt (if in fact it is a debt yet) was being paid off. But as it stands, you may have taken on a property with an outstanding debt. So the bit in your escritura that should say there are no debts, is strictly speaking, wrong! Not a problem for you of course, because I have no doubt that you will pay the outstanding dues at the first opportunity - but the community's interests were hardly protected by the notary allowing the sale to go ahead anyway, because the community has no guarantee that you will pay, and may end up having to go to court against you. (won't happen of course, but hypothetically speaking)

I was speaking to the administrator of a local community this morning, about a specific property owner who he told me owes about €5000 to the community. I don't think the same would happen if this property was changing hands!

Maybe Solutions would like the name of the owner?

I Take your point Roberto, yes our fees are due quarterly, I'm told 1st Jan 1st April 1st July and 1st Oct are the due dates, our community gives a discount for payment made within 1 month which I thought was a good idea, never heard of it before.

Steve

So no, there is no debt yet - but a bit of a b*mmer that you have to pay the full amount this quarter since the deadline for the discount has passed.

We introduced a discount for early payment (which in effect is a fine for tardy payers) while I was president - and ever since, we've had not one single late payment. Happy days!

Going back to my original questions, you may have guessed that they came to mind while discussing this owner who owes €5k in a nearby community. The apartment was purchased about 3 years ago with a mortgage greater than 100% of the purchase price, so even if property values weren't dropping but had stayed the same, this owner would be in negative equity. What chance, really, I wonder, do the community have of recovering their debt? It's going through the courts now. I don't know how long it's been in the legal process, but this debt clearly goes back a while.

I presume it is different depending on which part of Spain you are in, but we find it very rare for a solicitor/notary to contact us re the issue of Community fees and if any are outstanding or not.  The only way we have become informed recently is when the seller has told us they  have found a buyer and we have asked them  to forward the details of the solicitors, otherwise we would be none the wiser, as many have changed hands without our knowledge and the fees are still outstanding from the original owner.

We have had several debtors either hand the keys back to the bank or they have just walked away from the property.  In all these cases the banks have paid the outstanding fees, so in that sense it has been better for the Community but of course sad for the owners concerned and not nice having all these empty properties. 

I have nothing against the Company Solutions and to be honest have never heard of them but am interested to hear if anyone takes up their offer and is successful, we could not employ anyone without  full Community approval so would never find out ourselves but wonder how much there charges are and if they still apply if they are successful but the owner has no assets.

Our new house is in a community of 9, one has been empty now for around four years with no community charges being paid during that time,apparently the owners have not been contactable and the community have taken legal action with a view to having the property auctioned.

As a newby to the community I'm still finding my feet and trying to find out the full information without being pushy, but apparently the other eight of us have/are paying the missing charges between us which makes the fees sky high.

The president has told me that when the property is sold the community will have quite a bit of surplus cash that will be used to carry out a couple of major projects that have been needed and the quarterly fees will be reduced.

While I have the ear of presidents and or ex presidents on this thread.

Is it normal for things like this to go on for four years?

Is it normal for the community to pay the short fall of debtors

Thanks

Steve

Hi Steve and welcome to the wacky world of Communities!

The Community charge you are paying should not increase because of one  non payer if this is the case it suggests it was set too low in the first place.  We have a similar case on our Urbanisation and we have been pursuing the "owner" for the last four years with the contact details that were supplied by the Constructor.  There has been no response to the numerous letter and buro-faxes (like a registered letter) and now we have started to take court proceedings (amiss of us I realise) we discover that the property still belongs to the Constructor and was never actually sold!  The Constructor and the buyer are in a long winded court action because the buyer paid a percentage of the sale price but not all, and the Constructor wants his money.  The property is worth at estimate 50% of the original sale price as it has been used as a cat refuse and the windows have been left open to the rain and the winds all of this time, so goodness knows where this will end. 

Sorry to waffle on but just want you to check with the Land Register who owns the property, before you go to the expense of claiming the fees.  Also be aware that if the owner has a mortgage on the property more than the value you may be a long way down the line of getting your fees, although a new owner may be more willing to pay if they are aware of the situation before they buy.  In our experience though the banks, well all except one, have played fair and are paying the fees without any fuss, getting the gardens and pools of these empty properties maintained however, is another matter.

Team GB:

Always the agreements are in written, you can postpone the realization of the debt till it is actually negotiated. Of course, your rights to interests need to be accounted.

That agreement has an executive value ( aknowledgement of debt) and once it is decided by the COmmunity of Owners, you will be able to collect it ( out of court or judicially)

Best,

Maria

Maria & Denise

Thanks for the information, intresting.

Hi G.B

Maria has reminded me of an important point.   We have a charge of 20% on top of the Community charge for non payers and also a discount of 10% of early payment and this works well.  Initially at the A.G.M. two years ago we increased the Community charge by 10% at the same time offering the discount of 10% so those who paid and continued to pay early in the year were in effect still paying the same fees as they had from the beginning.  Those that could not be bothered and paid in the first quarter paid 10% more and those who pay after the first six months pay another 20% so the Community is in a win win situation and all of the owners are satisfied as they do not feel as though they are supporting the late/none payers who will have to pay eventually with the % on top.

Hi Denise

Yes this sounds like the way to go. I was pleased to find that our new community has a similar scheme, however as we completed on the 10th Feb and our lawyer had charged back the proportion of unpaid fees to the vendor ie 1st Jan - 10th Feb, we lost the discount for the first quarter.

Hey ho, will be on time next month!

Steve

Good luck!

Maria

Denise said: "The Community charge you are paying should not increase because of one  non payer if this is the case it suggests it was set too low in the first place."

Perhaps. Remember, though, Steve said his community only consists of 9 owners. Work out how big the shortfall would be in your community if over 10% of the owners did not pay. To keep essential service functioning, someone has to pay.

Hi All,

Just had a read through the posts and hope I can answer a couple of questions.

Johnf - You cannot have claims going through UK and Spanish courts at the same time. It is a question of considering what stage the cases are at in the Spanish court and what has been expended. If small amount of fees and at start of claim it may be worth abandoning over there and pursuing in the UK. I would really need to discuss in more detail to advise. There is a thought though that costs can be added to the debt through the constitution of the community itself. It is therefore possible to add these to the debt and chase in the UK. This would depend on the amount though.

Roberto - No assets, definately the biggest problem with simply selling the property in Spain. The good old man of straw. This is where I think the UK option has its main advantages. I say this looking at their UK property, attachment of earnings, baillifs etc. Also, yes it would be good to get the name of the owner regarding 5,000 euro debt!

deniseatnycs - The fees for my service are negotiable with any community. No I would not charge if I chased somebody with no assets. I would continue to try and enforce and if I recovered the money I would then charge.

I hope this helps.

I have been taken up on my offer by a community and will be attending there AGM (flight permitting) at the end of the week. I will update you on the progress and ask the President of the community to join this forum in due course and provide feedback on what I do.

Any other queries, please let me know.

Regards to you all