Extra Fees to cover Shortfall due to Debtors

Our Community has problems with debtors, as I think everyone does, which has created a shortfall in the Community's coffers.  There are a couple of court cases ongoing to recover monies from debtors, one which should be finalised soon.  

It was agreed at a recent meeting, (that I didn't attend), that there would be an extra payment of 125 euros per month for the next 6 months to cover the deficit.  Of course, although this applies to everyone, it won't get paid by everyone, and I imagine with the debtors it will just get added on to their debt, which seems a bit pointless but anyway..

This payment is in addition to the normal monthly community fee of 275 euros.  Although I understand the Community's predicament I simply cannot afford to pay 400 euros per month!  My account is up to date and I am furious that I end up being penalised because the Adminstrator didn't get their finger out soon enough to get debtors to pay.

I would have thought that if any of the owners pay this extra charge it should be treated as a loan to the Community and repaid at a later date when the Community recovers some of the debt. Apparently though that isn't the case, you have to pay it, and you never get it back.

Is this legal?

Can I refuse to pay it?

If I found a way to pay it am I within my rights to deduct it from future community fees once the crisis has passed?

Thanks in advance for any advice

 

 

This message was last edited by RubioExPat on 03/11/2013.

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Rubio.        In my opinion 275 euros a month is a very high cost community fee. Obviously i don't know your community but if you need another mortgage to pay the community fees then no-one is going to buy property in your urbanisation, and there is no wonder you have debtors.

Speaking as a serving president with some knowledge of how communities are run, this is what i would be doing - get rid of your administrators, they should be advising on how to reduce costs - they obviously are not doing, then elect a president (preferably English) with a business background, he (or she) would have knowledge of seeking out the "Black hole" that is draining your community coffers, your community is spending to much money with regard to your income, forget debtors, communities have to work within their income, as any business does.

I have seen this work (in our community) and others where a new president has come in and "slashed and burned" in order to cut costs and get community fees down to a reasonable level, and still have a high quality community - you would be amazed at where money is draining to - and that is being diplomatic !!

You (as a community need to get back to the basics and work from there, and remember the President is the "boss" not the administrators.

I know i have not answered all your questions, but... that's the way to do it.

 

All the best, hope the above helps in some way.

 

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Thanks for your response.  It's in Marbella so I suppose that it is why it is higher.  We are a small community of 30 townhouses.  Some are 2 storey, some are 3 storey.  I'm a 3 storey one so my fees are higher although I don't know why because the footprint of the house is no larger than any others.  The community has about about 10 houses that are permanent residents, who are a mixture of Spanish and English.  The rest are holiday homes owned by people of all nationalities.  The position of President is only ever held by one of the Spanish residents, due to the language difficulties and knowledge of Spanish systems, and there is only about 5 people to choose from.  It always ends up being a retired Spanish man as either President or Vice President who behaves like a Dictator.  He hasn't grasped that it is just an administrative role and behaves as a policeman monitoring what people do around the complex. He has the proxy votes of most of the owners of the holiday homes as they are never at any of the meetings, neither am I, because they always hold them at a time of year when there is no-one there.  The net result is he has enormous power and the administrators jump to his tune.  So it is a problem, and difficult to deal with from a distance.

Do you know whether or not it is legal to charge these extra fees and whether I can refuse to pay it?  

I don't want to accrue interest as there is a 10% interest charge levied every month on a late payment.  If you are one month late paying your fee of 275 euros there is a charge of 27.50 added.  That is repeated on every monthly late payment so the monthly fee becomes 302.50 until you can catch up.  That is something this President brought in whereas the system before was 4% interest on the debt applied every 6 months. Now it is hard to catch up if you have difficulty paying, especially when they want to add on an extra charge too so they're not making it easy for the debtors.

This President has also published a list of Debtors in a public place which I understand is in breach of the Spanish Data Protection Act.  He is a bit of a nightmare, not much else to do I suppose

 

This message was last edited by RubioExPat on 03/11/2013.

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"It always ends up being a retired Spanish man as either President or Vice President who behaves like a Dictator.  He hasn't grasped that it is just an administrative role and behaves as a policeman monitoring what people do around the complex."

Rubio, I have to take issue with a few of your comments (in a nice way i hope).

Your President sounds like he takes the job seriously. as i said in my previous post, the President in any community is THE BOSS the administrators cannot over-rule the President, they work for him. So if he goes around like a policeman then he is checking that owners are abiding by the rules, therefore keeping your urbanisation in a good state. I do the same, I look out for satalite dishes on balconies (not allowed in our cummunity) and people dumping rubbish in community areas rather than walking to the bazura, it all makes for a quality community, it certainly isn't an administrative job - it's very hands-on, that's why nobody wants the job.

regarding "the 10% interest charge" my guess is that the administrator increases the community fees by 10% and gives that back to owners who pay on time as a discount. The reason for that is that when debtors are taken to court the full amount can be claimed, whereas interest charges cannot be claimed back in court , a very commen practice, and one that our community has adopted, except that we give a 20% discount for paying on time.

regarding the extra fees, providing this has been voted on at your AGM (or a EGM) and passed then yes it is legal and you have to pay it.

Regarding posting a list of debtors in the community, that is aslo perfectly legal (to my knowledge this practice has not been made ilegal )  it was intended to "name & shame" debtors and in some communiies works very well , in our community we publish them from "time to time" on our community website, and at our AGM, as debtors cannot vote at the AGM.

Rules aren't made to favour debtors, but to shame them into honouring their commitments.

I still think your community fees are to high, even for Marbella, I would be driving a bus through your accounts ready to cause a stir at the next AGM and getting some owners to back you up on the point that "you need to get your overall budget/spending down" along with your community fees.

 

That's the real answer.

best wishes                                                                                      

 

 

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I agree with Costa Blade's important point about the need for transparency in the accounts. As the owner of a private house where we pay someone every day in the summer to look after the pool, I am amazed at what residents on urbanisations pay for this. If someone comes to clean the pool and, for argument's sake, is paid 10 euros for an hour's work, that should equate to 33.33 cents per person per day in a community where there are 30 owners. And it should come to nothing out of season. And what are all the other supposed costs? How often is any lawn cut for instance? I don't see why those in control of the accounts should be allowed to mystify these things and have everyone blindly accept the situation. To me, it looks like the usual story of corruption and siphoning off of funds that permeates Spanish society. How else is it to be explained? (obviously if someone can explain how 99,000 euros per year (30 x 275 x 12months) is necessary, then I will stand corrected). As Costa Blade says, if this were sorted out, the issue of the debtors wouldn't be so important, as the amounts charged to everyone would drop drastically. It seems to me as an outsider that owners on urbanisations everywhere should get together and challenge these charges. Or maybe they're part of Spanish 'tradition,' and should be left alone...

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Thanks Costa Blade for taking the time to respond.  To clarify.. no, there isn't any discount for paying on time, or in advance. If you're late paying there's 10% interest on every monthly fee, period.  I don't want to end up in that situation by refusing to pay the extra fees and it seems like I can't do anything other than find the money from somewhere.  I will take your advice though and enlist some help with going through the accounts and the budget.

I've read on a legal website that Debtors lists cannot be published in a public place as that is a breach of the Data Protection Act. That information is intended for co-owners only and the Community can be fined up anything from 600 euros to 60,000 euros by the Data Protection Agency for breaching the act.

As to El Presidente.  He affords himself privileges that no-one else has, just because he can, it is very definitely one rule for him and another for everyone else.  His officious ways have resulted in nobody being able to relax when they are in communal areas as he's always patrolling, but that's another matter!

 

This message was last edited by RubioExPat on 03/11/2013.

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Eggcup you make a very valid point.. it's a lot of money!  I will very definitely be looking into it further

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Eggcup has said what i didn't want to say, not in public anyway, I have many Spanish friends and i enjoy a good  relationship with our administrators.

Our administrators are just that, they do the books and i do everything else and if i need advice i go to the MD of our administrators who is a really good bloke and understands Spain has to change, he hates the idea of "Brown envelopes"

I have had many "off the record" converstions with him and i would trust implicitly. (but still keeping an crafty eye on things).

He always says to me "I run a large business, i haven't got time for cash deals" also every invoice has to have IVA added or he will not except it, that's his only rule to me.

Of course with me doing all the other stuff in terms of employing contractors the owners have to trust that i am not doing anything amiss. That always worries me as i have no way of proving that, other than we have placed 50,000 euros into our reserve account in Two years, we didn't have a reserve account prior to that (other than the legal reserve), so i guess that speaks for itself. Just to mention i get a 250 euro discretionary payment each year, which i am happy with as i really enjoy the involvement and learning about Spanish legislation (where it exists) as i go along, it can be a fascinating job being President and not speaking Spanish needn't be a barrier.

Rubio, get stuck into those accounts, keep asking questions and keep your "mantra" the community fees are too high.

Best of luck.

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Thanks, I will!

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Rubio, that is a lot of money. But it does of course depend on what there is in your community. For example, mine is 25 Properties, comprised 16 flats and 9 townhouses. We all pay the same, although I think it is normal for 'bigger' properties to pay more, even if the footprint is the same.

We pay 400 Euros a year. We have a smallish pool in the centre, with a couple of palms and a few plants around it, and climbers over the pool fencing. Then just the paths around and a bit more garden in front of one of the apartment blocks. We have about 10k in reserve, and no longstanding debtors.

A friend lives in a community of 17, 16 semis and 1 villa. She pays 150 Euros per month. They have a medium sized pool, a fair bit of grass (rough thick stuff with lots of weeds!), a few palms and bits of garden. However, they have a long hedge behind the pool and garden area, and hedges between the houses, and a shrubby tree in each garden. The hedges are trimmed about every six weeks. It is this gardening that bumps up their fees.

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Hi aly.

Just to play around with the figures here, then:

In your community:

You pay 10,000 euros (400 x 25) for the maintenance of the pool and small garden. It doesn't sound like there's much more to do than we have to on our private property and we would pay roughly:

150 euros per month x 4 summer months: 600 euros, for the maintenance of the pool and garden; plus a few hundred for pruning of trees and pool chemicals and electricity. It might come to about 1,500 euros per year at the most. So, even with your relatively 'cheap' fees, I'd still want to know where the other 8,500 euros were going.

As for your friend's community: 150 x 12 x 17 = 30,600 euros: they are paying 3 times the amount you are paying, so are the grounds three times as big and is there three times as much work involved? It doesn't sound like it. I don't think I'd be happy to pay 20,000 euros a year to cut hedges. If the hedges are trimmed every 6 weeks, that's roughly 8 times a year, so they're paying 2,500 euros each time for a couple of hours of trimming...

Is it just me, or is this whole thing completely outrageous? I'd like to see Sur in English, the Costa del Sol and Blanca News, the Olive Press and any other expat newspapers people can think of to take up this issue as a campaign, which can then hopefully be picked up by the Spanish national press. Another option would be to get some lawyers to demand to see community accounts and demolish this abusive system. If they say they have contracts with companies that charge 2,500 for a couple of hours hedge-trimming, I suggest they cancel those contracts immediately. If it were me, I'd set up a rota of owners to do the bloody trimming. At the rate of 8 times a year, each owner would have to do a couple of hours work every few years and save thousands...

The whole thing could turn very nasty of course, as there must be people behind the scenes raking in a pile of cash for doing nothing. I've been watching a box set of The Sopranos lately and this whole thing has a striking resonance with the New Jersey mafia. So it will be a brave group of people who take it on... It could, however, be an example of how to cut through the decades (and centuries) of corrupt practices and set Spain on a cleaner, more ethical route into the future. I think this could be a massive story. (NB. these are my opinions and I am not casting aspersions at any one individual, as I don't know anyone involved)

 

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Wow! I thought one of the main things about living more cheaply in Spain was that the equivalent of council tax was much cheaper.

Why is your community putting up with such astronomical charges? There must be someone like an ombudsman who an advise you?Talk about a massive rip off!

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Eggcup is quite right to say it takes a brave person to take these people on. Our community pools  (one fair sized one and one smallish kiddies pool) remain the property of the developer and he has been charging 44,000 euros per year just for the community to lease them, the community still have to pay for the regular maintenance etc. The on-site restaurant (owned by the developer) customers are allowed to use them free  and sometimes the restaurant allows pool parties and we haven't been able to do anything about it. People come from far and wide and use them so sometimes there is no room or loungers left for the residents who are paying for them. They refused to put locks on the gates. I cannot tell you the trouble this has caused with some owners saying we should call hs bluff and refuse to pay it and other owners scared he will close them if this happened. The developer still owns properties that he rents out so it's doubtful he would close them as it would effect his own properties too.  It is a racket and there are  neighbours who don't speak to each other because of ill feeling over this situation with those who have tried to fight it being labelled troublemakers and vilified by other cliquey owners who just want a quiet life. The accounts are a mystery and even when asked for they never appear, the AGM minutes just give a very broad account such as 'maintenance' but the maintenance is never specified. The president has been taken to court for irregularities and lost but then won on appeal which beggars belief as it was a clear cut case. The rpesident also sacked the adminstrator mid term without a vote of owners taken on the role themselves and is paid nearly 20,000 pa for this.  I would never buy on a community again.

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Why buy on a so called community? I'm staggered by the ammount these guys are paying and not knowing where its going. How long have these people been burying their heads in the sand and paying up its as bad if not worse than timeshares. Is having a pool so important? Most of these communities are near the sea for heavens sake. We bought inland in a village, dont have a pool but can blow up a plastic one if we want in the garden with marvellous views no kids no noise rates are pennies electric similar if I want a hedge cut or outside painted I can get a local lad to do it when were not there for 100 € or so oh and when I walk through the village all I hear is spanish bliss!

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camposol

 

there is no such thing as Ombudsmen in Spain, there is OMIC for consumer complaints but no regulators for any industry as far as I can see.

The only check on budgets and figures are the owners themselves, they are the Community, they approve Presidents, Administrators and budgets and as eggcup says, owners need to ask questions and take far more interest and responsibility in their expensive investment and  to ensure they are not being ripped off, however how many of us actually do that even in the UK, the Spanish are just more open at ripping us off.

Poppy is right, when a small number ask questions they are branded as troublemakers, it needs majorities asking questions, for gods sake its your money.

 

casperruby you are also right, it is a good thing there is so much sand to stick heads in.

Problem is so many Communities were sold and well marketed before the crisis and too may speculators, the majority of debtors, hoping to turn a quick buck jumped in alongside genuine buyers, when we get to a position of lifestylers only, we have a chance.

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@ Poppyseed - what a dreadful situation you have there. It's never occurred to me that that sort of situation could arise, where a community don't own their pool. I can well imagine the distress it causes.

Following eggcup's post, I've dug out our accounts. One thing I want to point out is that communities (as I understand it ) are obliged to employ fully legal work persons - so if there are any problems there will be the opportunity to sue them - not possible if you use a friend of a friend for a cheaper job.

Our last yearly costs are as follows







Admin 1706, pool 2986, insurance 808, payment to president 360, gardening 528, purchases/repairs 2442 (we had a wall built, we all saw the quotes), electric 1734, water 321. Total. 10885.

The above charges include vat. The pool people visit all year round. They come twice a week between about October and June, then I think they come about every other day in peak season. We do have holidaymakers using the pool in March and October! We do get other quotes. I am also incorrect in how much we pay, we used to pay 400 a year, we have now dropped it to 350. We are all free to contact the administrators and go and inspect all the receipts.

I have to say the electric seems a bit steep. Regarding my friend, yes there is a LOT of garden and hedges. She is in the usual position of being a minority permanent person, the president holds nearly all the proxy votes of the majority of those who just use the place foe holidays. To be fair, she did get a gardening friend to have a look at it, whilst he reckoned he would only be able to get the cost down by a few hundred Euros, he did point out that he would make a much better job of it. (** roll eyes ** Yes, the current contracted gardener is the President!)
This message was last edited by aly not in spain on 04/11/2013.

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Hi Poppyseed.

It is of course outrageous that you should be tied into this arrangement with the builder - you will be paying more to 'lease' the pool (never heard such nonsense) than you would be paying to build a brand new pool every year. I would be asking for a lawyer's advice on this - to see if there is any law about punitive arrangements that you could use to get out of it. I'm almost speechless (not quite) that such an arrangement can actually exist.

Also, Costa Blade, I think you're in line for a medal. It would be so good if you were willing to be interviewed by a newspaper, which could cover how you cut costs for your community and outlining in black and white what things cost and what community members should therefore be paying, wherever they are in Spain. Honestly, this could be the beginning of a change. You never know - we can all be a bit daunted and defeated, but a little ripple might turn into a tsunami.

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Hi Aly. Just to be a bit pedantic and because I like examining the minutiae of things, I'd still be querying your bill. I'd wonder, for example, why administration should come to 1,706, or 142 euros per month. What comes under that category: telephoning to ask the gardener to come a different time? Sending a letter and using a piece of paper, envelope and stamp a couple of times a month? I'd be happier if were a tenth of that cost.

Also: regarding the 2,986 for the pool - if, say 500 euros were spent on chemicals (just guessing here), then that would leave 2,486 for the pool person. This equates to an average of nearly five hours a week if the person were paid 10 euros an hour and as you say, the pool person doesn't come anything like that number of times. What are other pool costs?

With the gardening, again at 10 euros an hour, that would equate to 10 hours a week, if there was no need for purchases (actually, that one might be realistic, if there isn't a lot to do and if plants, compost, tools etc have to be bought).

Electric at 1,734 - it depends if there's much communal lighting as well as the pool pump... I think one thing is that pools are often left on too long. Of course in the winter I assume zero electric, so it just pushes up the average for the summer months.

But of course, this is all small fry compared to your friend. The President just happens to be the one being paid an astronomical sum for inferior gardening. How can such a conflict of interest be allowed? A council leader near us recently voted for himself to get a massive pay rise and when people found out there was a strike and he was suspended. This President in Spain must be laughing at the lot of them.

 

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A very long time ago, there was a survey taken on EOS of Community charges throughout Spain and of course as you would expect threw up some large variations.

Contribution of fees is based on coefficients of square metreage of your property normally including terraces and store rooms nothing to do with footprint.

Larger Communities have to employ registered and insured contractors on any long term contracts with all the social security costs involved this takes hourly wages cost much nearer to 18 euros though the guy employed may only get 10.

IVA is chargeable on all contracts and services adding 21%

Administration costs will average 6/7 euros per month per property plus IVA so Alys figure is low.

The administrator is supposed to keep the accounts, pay the invoices, deal with any problems, chase the debtors, not defending them but it is  clerks  role.

Huge variations of costs will be brought about by lift maintenance, amount of pools, size of gardens and relative maintenance and watering, security, bins etc.

Each Community is supposed to have a reserve fund and many will build up a redecoration fund and in many newer Communities, provision for irrecoverable bad debts will continue to be a drain on those paying as this thread started out on.

I would suggest Alys figure is low compared to many Communities

Big question for presidents is

Do you reduce services due to bad debts or

Do you ask the good payers to contribute more to keep the Community in good order?

 

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Bloody hell Rubio you've started something here !!   Some big big figure being bandied around, shows how much Spain has NOT changed in some areas, and how owners are willing to pay through the nose for services - some of these people must be laughing all the way to the bank, at owners expense.

Just thinking aloud here, the first thing they could do is "outlaw" cheques signed to "portador" this allows the check to be paid into anybodys account or drawn as cash (providing it is drawn at the issueing bank ).  This practise was banned in the UK many years ago......... but hey, this Spain.

 

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