Unpaid Community fees

A property on our development has had the locks changed by the bank. There are outstanding community fees and I was under the impression that these would not be cleared until the property was sold on as happened with another property. A friend who is President of another community has told me that once the locks are changed our administrator should be pursuing the bank for these unpaid fees. Does anyone have any experience in this field?

Ant

PS I should have put this under Running a Community!

Of course, once the Bank has his lock on the property ( despite it might have not registered ownership in Land Registry: avoid costs that way), Community can start requesting Bank to pay community of owner fees, present and of the three years previous acquisition.

If the bank has repossessed the property they should pay the community fees that are owing and also going forward until its sold on - some do quite readily, some will try all the tricks in the book to aviod - We were lucky with the one repo on our commumity, the bank paid.

Thank you both for your answers. We have our AGM soon so will enquire as to whether the administator knows of the lock change and has billed the bank.

My only experience previously is in the UK where the banks pay up as soon as leaseholders get into arrears to avoid possible forfeiture.

From recent and personal experience, we are finding the banks will indeed try every trick not to pay up the fees due, even trying to get bankrupt owners to pay fees before repossessing the property.

They certainly do not rush the repossession process.

We certainly have experience of NO debt certificate being supplied to new owners and as Maria says they are avoiding registering change of ownership in land registry hoping to sell on telling new owners that fees are paid.

I would remind all new owners that any debt remains with the property and they should check thoroughly by asking for a debt certificate to ensure property is debt free.

To name and shame on here, La Caixa have consistently been one of the worst offenders.

Where does Banking regulation and compliance in Spain fit into this equation so as to make Banks comply with their legal obligations, especially if they are "avoiding registering change of ownership in land registry hoping to sell on telling new owners that fees are paid "?

I notice that Caixa Bank makes the following statement "CaixaBank seeks to consolidate its position as the epitome of a socially responsible and committed bank that is a point of reference in terms of good corporate governance. "

Who is monitoring this behaviour (who should this be reported to) and who has the power to ensure that their Banking practices are inline with good corporate governance and that they are indeed socially responsible?

Ads ........    especially if they are "avoiding registering change of ownership in land registry hoping to sell on telling new owners that fees are paid "?

But is there any legislation which say they (the entity that has recovered possession)  must register,  and if they pay all the outstanding fees, as they must because the Notary must ensure all debts have been paid before he/she can make the transfer,  then, other than not paying the community fees,  what is the problem?      

And of course the community can instigate action to make them pay the back fees,  plus all the costs involved. 

Maybe it’s the administrators who need to get their fingers out !

Question: Are all  Notaries across all regions obliged to ensure that Debt certificates (including community debts) are provided before transfer of property can take place?

The notary must obtain a new nota simple on the day that the documents are signed,  in order to confirm that the ownership and charge details have not changed since the last enquiry.

In my experience, where the property is part of a community, the seller must produce a confirmation, for the notary,  from the president that all community payments are up to date.

On  a property I was lending money on, a second mortgage,  the notary refused to make the deal because there was a debt outstanding.

Are all Notaries LEGALLY obliged to ensure the Debt certificate is forthcoming from the seller BEFORE transference? In other words is this now a mandatory legal requirement and for a community property must this include a legal signed declaration by the seller (whether a Bank or otherwise) that there is NO OUTSTANDING COMMUNITY DEBT ASSOCIATED WITH THE PROPERTY?

The notary must obtain a new nota simple on the day that the documents are signed,  in order to confirm that the ownership and charge details have not changed since the last enquiry.

In my experience, where the property is part of a community, the seller must produce a confirmation, for the notary,  from the president that all community payments are up to date.

On  a property I was lending money on, a second mortgage,  the notary refused to make the deal because there was a debt outstanding.

This message was last edited by johnzx on 23/01/2016.

john

we have certainly had 2 recent experiences of buyers taking low priced property off of banks (La Caixa) and probably not using independent lawyers, where no debt certificate has been asked for or obtained by the bank.

Yes the bank eventually paid up but only after much time and effort by the Community and Administrator in chasing them.

Yes Administrators need to be more aggressive with banks, but in my experience, banks and the legal profession are both still held in high esteem, despite all the corruption surrounding them, by the middle classes, therefore they cannot be questioned by mere mortals.

Ads

I don't think a financial regulator exists in Spain does it? The banks appear to regulate themselves, too much power.

They certainly have little moral code anymore.

Anyone who believes regulators can actually regulate should go see the new film "The Big Short" to see how useless the SEC were in 2007

The only way to get a real time position regarding community fee debt is to ask the admistrator for a statement for the property in question as at the completion date. Any good lawyer will do this as a matter of course - there will undoubtedly be a allocation of days +/-  depending on what day in the charging period the completion takes place.

Same goes for IBI and basura - all part of the work for the purchasers lawyer if the buyer has any sense. 

Thanks Hughman...your reference to lack of regulation back in 2007 is exactly why Jo Public should all be calling for (or demanding!) their Governments and the EU ensure that Banks are adequately regulated, effectively monitored and compliant with a set of Banking standards that are not just rhetoric but adhere to the rule of law.

Team GB, unfortunately you cannont depend upon all lawyers to act independently, nor on all administrators being fully independent from developers/Banks, so the only safe way would be for the Notary to disallow transference until such time as the seller signs a legal declaration confiming there are no outstanding debts and become legally liable if debts are subsequently identified..

This message was last edited by ads on 24/01/2016.

Couldn't agree more Ads, sadly my experience of owning in Spain for 8 years is that Jo Public are extremely ambivalent and expect it all to be done for them.

Come to think of, that's not dissimilar to this current generation who want to blame someone else.

I once saw a staggering figure quoted by some senior guy in the College of Administrators that banks collectively owed vast amounts of unpaid Community fees in Spain, not surprising given what has reverted to them but just like Bank Guarantees, responsibility means nowt when money is involved.

Banks worldwide, sadly now have so much power, governments are forced to give in to them and tax payers are forced to bail them out.

Very interesting reading all you comments. Hugh man, I think one of the problem with people from the UK buying apartments is that back home they live in conventional houses and are not familiar with the communal living concept and responsibilites of various parties.

johnxz I agree about the administartors but from my experience in the UK they look after their bigger ciustomers first which is where they make more money and the best way for a small development is to keep an eye on debts etc.

I had an experience in the UK where I was told there were no debts on our development and after pushing I found out that our managing agent had only started chasing them after my enquiry. Needless to say we now have a new agent.

Ads:

Notary will mention and warn on lack of community zero debt certificate, but... if parties decide to go ahead, Notary can authorise--- with no liability-- the signing of the Notary deed adn then these debts ( of same and three previous years) are transferred with the property.

Maria

Ps.- You can check on our conveyancing services here

saferent

takelegal

wemovetospain

So that is how the banks are getting around paying by noting the debt when the property is repossessed by them presumably with only the bank representative seeing the notary and then relying on the community not chasing them for the debt until they sell the property on to a new owner, is fitting into place now.

Dear Maria,

Thank you for your clarification.

This system without any mandatory requirement to restrict transfer of property until such time as the property's individual community debt is cleared leaves communities at great risk.

No wonder debts for some communities are growing at an exponential rate and surely this will negatively impact the property market as more and more "responsible potential buyers" become aware of the debts associated with their "chosen" community, in full knowledge that there is no failsafe conveyancing mechanism to protect them from those who fail to pay their individual community fees at point of sale/transfer.

Why should good responsible owners be made indirectly accountable for the unethical behaviour of others who refuse to meet the debt associated with a property at point of purchase/transfer?

Without a failsafe mechanism in place from the outset, this system sadly perpetuates unethical practice by those purchasers (or to whom property has been transferred) and sellers alike, who refuse to meet outstanding community debts on their property, leaving no option but for the community to take legal action to recoup losses.

This sadly appears morally indefensible.

This message was last edited by ads on 25/01/2016.

 in full knowledge that there is no failsafe conveyancing mechanism to protect them from those who fail to pay their individual community fees at point of sale/transfer

But there is ads. Any decent lawyer will always make sure they get a statement/letter from the communities administrator prior to the purchase as part of their nomal conveyancing and search procedure. If the administrator in anyway tried to lie or conceal the truth I'm sure this would be a criminal offence.

See my comments below Team GB, many new owners are using the banks solicitor for cheapness or many will take the banks word for debt free rather than demand a zero debt owed certificate from the Administrator.

There Are too many inefficient lawyers who accept a guarantee from the bank without seeing any certificate.

Our Community had 2 such cases recently and after a lot of effort and hard work, La Caixa paid up but we were threatening to sue the new owners at one stage.

Ads is correct, there is NO legal fail safe, repossessions can take some time to be registered, if at all, getting regular Nota Simples may help but often they only state that repossession us taking place but not yet finalised as the bank will do all in its power not to register ownership.

Again as Ads says the system is indefensible, morally but again I comment, banks lost any morals back in the 90s if not before.

Why do think so many fees are owed to Communities by the banking profession throughout Spain.

Yes eventually they will probably pay as is their legal commitment BUT it certainly is not always that simple.