Legal advice - community problems!

Hi all.

Looking for some thoughts on our community issues and ongoing problems with the developer (Hogar Sur).

We bought an apartment a few years back, whilst the complex was still being completed. It was handed over and everything seemed fine. There are a toal of around 120 apartments, but only about 25 have ever actually sold.

You probably know what I am going to say, but the developer has NEVER paid any community fees. This now amounts to several hundred thousand Euros. There are also a number of problems with the building itself which we are having to take legal action to sort out.

Basically, this has left the complex with no money. We get a long just about, but we dont have any cleaning, the gardens arent properly looked after, if anything breaks we cant afford to repair it etc. etc.

We have since found that Hogar Sur are bankrupt (or in administration). Our community administrators (who have not really been paid much since they began with us) have organised lawyers in respect of the outstanding and ongoing non payment of community fees and also claims being made against the building defects.

We have been told over the last few days that BBV bank is going to be taking over the unsold properties and will be paying the outstanding and ongoing fees.

Unfortunately, the community administrators seem unwilling to give us much detail on the progres of either case. I dont blame them much, as they get so little payment from us, but it is still in their interests.

Is there anything we can do ourselves to check with the courts on what is happening? Or any way we can find out what the status of Hogar Sur is and if we can expect to see the outstanding community fees be repaid to us?

Any advice would be appreicated. I appreciate I havent gone into too much detail, mainly because we havent got all of the information!

Its a real worry. The owners at the complex are great, we all pull together and chip in to keep things going. Its still a lovely place, but without money it will no doubt slowly die a death.

Thanks.

 I checked on a Spanish forum and they are asking the same question there about the developer.  It's creditors trying to find information so that they get paid what they are owed by Hogar Sur.

It seems that the developer went into administration last year which means it's still early days; it will be many months (possibly years) before the bank takes over the development, I would assume.

I know it's no consolation but there are many communities in similar situations and everyone's just got to sit it out as eventually most will come good, and the banks should (although they don't always) pay all outstanding and future fees.  But I would think we're talking years not months.

Justin

The probability is that the banks will not pay the backdated community fees as their responsibilty when they assume ownership is for the remaining fees of the years fees in which they take ownership plus 1 more year...ie a miximum of 2 full years but probably less.

They may or more  probably will not pay even that unless you apply severe pressure to them, they WILL pay when the properties are sold but they will only volunteer the same as above...ie the oustanding payments for the year in which they sell plus 1 years debt.

The 2 year debt rule applies only to the the new owner of a property, the remaining debt stays with the original debtor but you obviously need to be involved in the administration process but by now are too late or have no chance of a return for the effort involved.

Barry

According to Provision 9.3 third paragraph of the Horizontal Property Act, the new owner ( Bank if repossessing or buying) will be liable of unpaid community fees of year of acquisition and year before.

What about rest of debts? If you start a claim against current owner and have the seizure registered in the Land Registry, you will be a preferential creditor once the property is sold.

This is the discussion I found on a Spanish forum.

Justin

Hi Superdon,

We seem to have a similar situation to yours - out of 200 apartments we have around 60 sold, with some other owners listed on the community accounts that we can't get any response from, so we are currently trying to run our community on a very thin shoestring with no expectation of any fees from the developer.  We don't have any resident owners so doing this from a distance is also a challenge, and we have really only just got started but thanks to a strong owners group there is a will to succeed.

Some thoughts for you, which may be useful:

1. Have the bank repossessed any of the apartments which were sold?  They have in our case, and while it may take longer for them to repossess the unsold apartments from the developer, they are currently owners of these repossessed properties and therefore members of the community of owners.  We approached the bank and asked them to communicate with us and take appropriate actions as co-owners, as members of the community of owners, and to protect their interests.  They have put us in contact with the lawyers they contract to represent them for their properties on the development.  These lawyers have been very useful in terms of speaking to the bank and to our own lawyers and we have been able to put pressure on the bank to pay the fees for the apartments they now own.  We have also been able to get more information about the bank's intentions with regard to repossessing the unsold apartments.

2. Is your president communicating with all owners and with the administrator, the bank etc.?  It seems vital to have a president who is interested and actively engaged and prepared to do the work - the administrator is just that, and is only required to follow the president's instructions/resolutions agreed at community meetings.  We have an active owner's group in regular communication, with links to Spanish owners through our new president.  We elected our new (Spanish)  president at the last AGM and decided to also appoint an (English) vice president who between them keep owners informed as much as possible, and therefore interested in what is going on & paying their fees.

3. The administrator works for the community, not the other way around.  Is the president asking for information and not getting it, or just not sharing it?  The administrator can be sacked at any community meeting and another appointed.  Our previous administrator was chosen by the developer, wasn't even local to the development, and failed on a number of fronts.  We have appointed a local administrator and will call them to account as necessary.  Sometimes it is just that there is no information, due to the incredibily slow bureacracy involved in any legal action, but at least it helps to know that this is the problem.  Our new administrator is with the company who also represent the bank's owned properties, are charging a lower fee and we are of course being cautious about making sure the administrator is acting in the interests of the whole community, not just the bank.

4. I've seen other threads on this forum about renegotiating contracts for maintenance etc, our new president is in process of doing this now, and also looking at all the options available for debt collection from fees defaulters in Spain and elsewhere.  We know that the likelihood of getting any money from the developer is extremely low and long term, so like you we are focussing on essential services to keep the development inhabitable, with longer term legal actions regarding recovery of developer's fees debt, building defects etc. 

We have positive noises from the bank about their intentions when they repossess, but also know this is a 'wait and see' scenario and will keep talking to them.

We know we have a long road to travel and it won't all be easy going, it seems that these problems are shared by a lot of communities in the current climate.  Any other information or support we can all benefit from would be really appreciated.

Our community is the same (103 built) and 50 sold

We are in vera playa, and the developer is still building ( but owes us €100,000) and will not even try and sell our vacant properties and instead is trying to sell the 250 that they have just completed.

We are in the same position, in that we have no money for repairs but our gardens are being maintained and is the cleaning being done.

Last summer the developer ( who shall remain nameless because we have started legal prceedings) even rented out the vacant properties and received over €15,000 in rent  and never paid anything towards the up-keep,and we assume this year thet will rent out even more properties because they are advertising with the spainish tourist board.

We are trying to do everthing legally and correct, but they seem to beable to break every rule and  get away with it and we are told that there is nothing that we can to stop them.

Any suggesstions would be very welcome ( sorry for the spelling)

Hi Paul & Carol

What a cheek! It does seem that developers can get away with doing more or less what they want while the punters who keep them in business by completing on their properties are treated with barely disguised disdain.

Have you thought about talking to someone in the Spanish tourist board - maybe the President should do this and let them know that this developer is not contributing towards the cost of running the community while making money on the back of other people's contributions - hardly a good advert for Spanish tourism.  If you are unfortunate enough to still have the developer as President, then the group of owners taking legal action could do it. 

Good luck - we all need some of that!

 Hi Hosilverlining,

As far as i am awear, our spainish lawyear has put an embargo on their un-sold properties.

The worst thing is that last year their renters destroyed the little bin in the sauna were you put the water to generate the steam,and were smokeing and drinking in the kids pool (dont have a problem with them drinking) but not there of all places.

Our president is fantastic, hes form bristol and lives on the complex and has tried everthing,we even put signs up (at his own expense) to warn people what the developer was like,and we were told to remove them that we were breaking the law,so he changed a few words ,put them back up,we were told that was ok,and then all of a sudden they some how just vanished, now i wonder, who would do something like that???????????????????????????????

Oh dear - though I'm not surprised and we will be waiting to see if our developer does something similar.  If you have a set of agreed community rules (normas) you can post these up too, ideally owners would have them posted inside their apartments if they are renting but I guess developers will just ignore this like they ignore everything else!  I'd be tempted to keep a few copies handy and shove them under the door every time an apartment has renters in it (no doubt you'll need them in Spanish if I am guessing correctly!)

I hope that Superdon doesn't have these problems on top of everything else.

 Judicial claims and preventive embargoes:only solution: the sooner the better

Thank you Maria, if we can enforce a court decision once it is made that would be wonderful - though it seems challenging in the real world.  

Could someone explain how an embargo works?  If the developer is not paying their fees (Superdon, Paul and Carol, and my own community - and many others I'm sure) and is also causing other problems (reckless renting, as in Paul & Carol's case, or as in ours we have unexplained interference with power supplies which could only have been caused by someone with keys...& we are powerless to do anything, even though they are not paying fees, as property owners they have to have access...)

It's the day to day problems which we need to be able to solve, as well as working out what legal action we can afford from a very small pot of community budget!

Paul & Carol - I wonder if the tax authorities, as well as the Spanish tourist board, would be interested to hear about the developer's rentals - maybe copy them both in to one letter.  If he is not paying his fees, I'd be surprised if he is paying tax either. 

 Hosilverlining:

In that case it is possible that a criminal action can be started with its corresponding civil liabilities.

Action is necessary, otherwise they will keep feeling they are the big guys.

Kindest,

Maria

Thank you Maria, 

We are talking to our lawyers, of course having evidence of who did this, even if we are pretty sure, is not necessarily easy and we are trying to secure the development (yet more costs) so that evidence is much easier to get.  

Could you explain whan an embargo is, and what it means for the developer if there is an embargo on their properties?

Thank you,