extra fees for rental properties

Thanks to all who replyed, unfortunitly none answered the question, are the community allowed to charge the owners of houses who rent out to short term renters up to 20% of thier fees or only if that house has caused problems?

EG. our community of 180 houses has a big increase of tourists in July and August, to help ensure that broken rules are kept to a minimum we employ security for the pool in these months at a cost of E8.000. We believe that if it were only residents we would not need the security so why should the owners who rent out thier houses not pay for this service.

You can ask them to pay, but you cannot enforce it except via the courts.  The cost will be circa E2,000 per case so a 20% surcharge is not going to cover that is it

The new laws regarding short term rentals means communities can now charge owners of short term rental apartments (less than 3 months) an extra 20% on community fees, this has to voted in by a 3/5s majority at the AGM.

Also short term rentals can now be restricted or even forbiden should the community decide this by a 3/5s majority at their AGM.

Many communities on the Costa's are now adopting this rule as and when their AGM takes place

'bout time too!

 Not making any judgement here but just had a thought ..... could this result in more repossessions if some people are forbidden the ability to rent out on their community and were dependent on this income to supplement their mortgages, but were unable to sell? 

Hi ads.

Yes it is a good point you make, and yes I think you are correct, it will certainly see more "apartment for sale signs" going up.

I would make a couple of points regarding our Urbanisation (I have been the President for the last Ten years and have seen the rough times when the financial crisis hit, not me personally but other people).

First we have two renters that continually break our community rules to the detriment of other people in our community, we have contacted both owners (and agents) all of which have said "I don't care, call the police if you want they won't do anything" we also have a "community fine system (legal or not and only after three warning letters) which we are about to implement, one of the owners said "I still don't care, i won't pay it" they will when they lose their discount on their community fees for being a debtor, if they want to take us to court it won't be a problem, we will follow it through.

The other point I would make is if you buy a property abroad but can only pay for it by renting it out you are playing a dangerous game with your finances.

Most of these people are not "business people" they just think it's a good idea.

Now I will put my "tin hat" on for the replies - but I don't care Lol

Ten years is too long.  You should rotate the Presidency.

Are they long or short term renters?   It makes a big difference

Communities cannot levy fines.  They are not enforceable.  They are illegal.

You cannot rescind their discount on Community Quota because of a fine.  Anything outside of non payment of quota or derama does not make them a debtor under lhp.  

You will have to take them to court to make them pay and they will win.  

I understand the frustration, but the approach you are taking will fail in the face of anyone who understands Community Law

Perrypower

First of all, I do understand "HPL community law. , I've been doing it a long time!  Living in Spain sometimes you have to step outside of the law a little in order to keep a good community - for the majority of good owners and may I say renters, we have a number of good quality owners and renters it's just a few that think they can do what they want and get away with it.  But in the end the responsibility lies with the owner.

We don't take them to court to make them pay - they have to us to court to prove it is illegal - they never do! and yes they lose there community fees discount.

Ten years is fine, I ran a business, sometimes the "law is an ass"  been said many times, I know what i am doing and apply "business" sense to running the community,

The owners love me because of the turnaround we have achieved in the ten years i have been President and i enjoy the job - it keeps the brain working.

We live here in Spain and have learn't and understood a lot about how things work as you would in any country - I guess you split your time between the UK and Spain, I meet a lot of people that have the same mentality as you but until you actually live in a country and imerse yourself in it's traditions, polotics, laws, dare i say taxation you will learn nothing - but know everything.

If everyone lived by "the law of the land" there wouldn't be a problem, unfortunatelt they don't so you do what you have to do. 

This message was last edited by CostaBlade on 17/07/2019.

This message was last edited by CostaBlade on 20/07/2019.

Costablade

Are you getting me confused with Perrypower who wrote the last posting, as I am supportive of your position and think as President you deserve to be thanked for all your endeavours....

I agree with your observations.

You are quite correct Ads, please accept my opologies and thanks for your support I need as much as I can get Lol

CostaBlade

You certainly don’t need a tin hat, many of us would share your sentiments.

I agree a Community has to run along business lines but with some consideration that owners are an equal part of the Community NOT employees.

Many Admins locally are not business people and understand very little about good business practice and can be very slow in chasing debts or being proactive in Community management.

If a President is doing a good job on behalf of ALL owners he or she will be well respected and urged to continue, though there will always be a minority of complainers.

As a Community we also introduced a discount scheme, not liked originally by locals, but our  payment on invoice went from 65% to 85%, a giant leap forward.

We also tried to introduce an admin charge not a fine for letters about antisocial behaviour but sadly our Administrator suggested it would be construed as coercion, therefore not legal.

Like you, i feel if owners did not like it, let them sue us but the Community were not keen on taking that risk.

Good for you for carrying it out.

HPA was used for good practice in small Community blocks with like minded people but appears somewhat out of date in this era of multinational & multifunctional ownership in blocks.

Thanks Costablade.

As for community debts, the amounts previously identified across the whole sector sometime ago appeared staggeringly high, so to your knowledge has this improved? ( Sorry I can’t find the details but I seem to remember that someone ( was it Maria?) identified an excessively large amount of community debt owed to communities several years ago). Also it would be interesting to know what proportion of these debts owed to communities across Spain are owed by the Banks?

 IF this is still of significant magnitude, have Community Presidents in Spain advised the EU Commission of this Banking abuse to withhold monies of this order? Could this be ( or has this already been) reported to a higher level....is it being monitored? Has for instance any request been made of the Commission to advise what options might be available from a higher level Banking compliance perspective?

Might this be an opportunity to bring forward also the detail of how Banks are not registering properties in the land registry and how this immediately compromises innocent community owners, until such time as they dispose of their repossessed properties?

Talking of which, I just hope that history does not repeat itself in terms of more repossessions based upon decision making that hasn’t recognised the longer term impacts from preventing owners from renting out their properties. Sometimes good intentions to correct a system can have unintended consequences if not thoroughly analysed. 

Or might this be a protective measure introduced by a hotel lobby group, intent on undermining private rentals?

So many situations in Spain sadly appear to be using corrective measure upon corrective measure ( sticking plaster theory!), when in reality sometimes a well reasoned rethink from a much wider perspective might be of benefit! Hugh Man could well be right in this regard.

I just worry not only for well intentioned Community Presidents who are doing their utmost to gain accountability from bad debtors ( including the Banks who consistently refuse to register their properties in the land registry until point of sale), but also for those caught up in this scenario, never believing that they would ever be denied the ability to rent.... 

But I take your point about the risks in taking on a mortgage dependant upon rental income.

But also when you consider the longer term impacts from questionable unintended consequences from changes to community law, you can’t  help but recognise the need to enhance good relations on communities between nationals and non nationals, between residents and non residents alike. It is after all a Community of owners.

I can’t help thinking that  those who make such policy decisions affecting community law should be looking to seek out solutions that don’t lead to division across communities, but should be encouraging a sense of common purpose to stamp out selfish abuse not only at individual level but also accountability from powerful financial institutions alike.

Anyway just a few thoughts.

Good luck and stay strong with all your ongoing endeavours to gain fair accountability. You deserve great credit being willing to deal with all the many issues and obstacles.

P.s. Probably also worth emphasising that a well run Community is a great asset when choosing where to purchase and your form of positive proactivity and inclusivity if rolled out on a wider scale ( and supported by higher levels of Banking compliance and accountability) would go a long way to hopefully improving longer term relations between nationals and non nationals, ....but also has the potential to improve the perception of buying on communities in Spain. What’s that saying “Mighty oaks from little acorns grow “ 😀

Hi Ads.

Just got round to reading your last post raising some interesting points.

Yes the banks are still playing "silly sods" with properties by not registering them as repossessed until the point of sale!

Going back a few years, when I first became "President" the debts I inherited were astonishing, our community was technically bankrupt, we literally had no money to pay our bills to suppliers, but we were in the middle of a financial crisis so i tried to be be even handed when it came to chasing debtors, some people had lost there jobs and were trying to hang on to their family home never mind the one they had bought in Spain, so were had a very "light touch" I have to say the the first "wave" of buyers when we bought in 2004/2005 mostly Brits, they have now gone, either repossessed or sold, now it's the Danish and Belguims that are buying everything they can lay there hands on - mostly to rent out! so the past is repeating itself but with different nationalities. I would point out here that the new rental laws are helping communities like ours to at least restrict these rentals which can only be a good thing when trying buid a "community" of owners.

Getting back to debtors, the banks back then were being slow to pay the community fees for repossessed properties, and that was the real problem!

Having after the first year realising our administrators were less than honest we changed to another administrator after me on my own doing interviews with various administrators that seemed desperate to take on our community - and probably our money, that is a long story! but we found one, after interviewing the owner (he had twelve employees and three offices) about how they ran a community he then interviewed me as to how i would run the community, i said "hands on" and "everything goes through me" he said "good we are going to get on, I haven't the time to spend all day running your comunity for you - you are the President that is your job" ten years later we are still together! Back on topic!! he started by contacting all the banks that owed us money and told them he intended to talke them to court, no matter how long that would take - the money started to come in and i started to sort out the community, I sacked the cleaners, gardeners and anybody else that had no right to be involved in our communtiy - now i was making a name for myself! other communities started to take note, I have to say i didn't like the attention that isn't why i took the job, but we were the poor relations of our area - now we are a shining light.

Regarding banks! the one we had most trouble with was Barclays - and we took them to court, they paid before it got there!!

Regarding the new rental law, yes i am certain the hotels are driving the agenda, but in the end if it gives communities like ours (and the authoities) the power to control who comes into our community then it has to be a good thing. Currently we have no idea who is "hiding" in our community as no one has to register with the authorities - well now they do!

I will just end with this - two days ago i took the train from Fuengirola to Malaga city (I am sure many will know this line), the amount of buildings going up is nothing short of astonishing, we are back to the old days on the Costa Del Sol!! and in five years we will see the same old problems with repossessions, even the Spanish are commenting on it.

Wether we stay here or not is debatable given that we travel around Europe a lot, on Friday we are of to Washington, New York, Boston, then Quebec and Montreal as yet we haven't found anywhere that has the climate to match southern Spain, if you asked me where i would love to live for a few years it would be Paris! for all the problems there it is a wonderful city - but it doesn't have the climate, Oh well.

Interesting Costablade.

And quite an exercise of self belief and good management skills. To repeat, your community are very lucky to have someone so committed and knowledgeable, but also someone not afraid to challenge the status quo but equally realistic and sufficiently compassionate when required. A rare breath of fresh air to be honest!

I wonder who are the developers, and Banks that are funding the expanse of build on the Costa del Sol, are they predominantly Spanish developers and are these Banks fully capitalised and transparent in terms of their own debts?

I also wonder if the new owners are cash rich and don’t need to rely upon renters to pay their mortgages, which would be reassuring in terms of minimising future repossessions perhaps? 

Hopefully the new owners are also now better informed in terms of requiring good trusted independent conveyancing lawyers that will examine contracts in great detail  ( both purchase contracts and mortgage contracts).

Anyway, enjoy your break away...it sounds as though it’s well deserved! :)

I can fully empathise with Costa Blade, we have changed the running of our Community around 7 years ago, my only regret is that our Administrstors engineered as much support as they could from the locals when I told them we were going to change.

They have improved as we ensured modern business practice was utilised in our Community.

Debtirs are now not a problem because we introduce wristbands to use pools, a discount scheme to benefit quick fees payers and we also pressurised the banks, La Caixa, who bought out Barclays were always the most difficult to chase, but by insisting on commencing legal action against them and the developers who owned some, reaped enormous benefits.

Like Costablades Community our new buyers are Belgian and Scandinavian with a few Spanish buying cheaply from the banks.

Unsold property in Spain remains at over 450,000 properties and has only reduced by 29% over 19 years, so I agree, this new spate of building will once again go sour.

I can only imagine that banks lending on new builds have freed up their balance sheets by selling off older mortgages to the Vulture Funds but just my opinion.

PS our Administrator has not even mentioned the new laws on charges fir rental property as when asked 3 months ago they informed me the new rulings had not been passed.

No Ads, newer buyers are not well informed by the lawyers acting for them who just want to earn a crust or three.

At times you want to give up and let them cock  it up for themselves.

Good luck with all your endeavours Hugh man...doesn’t sound promising if lessons aren’t being learned in terms of past history. I wonder what will transpire with the Vulture Funds?

This message was last edited by ads on 23/07/2019.

Just a few quick points. I can concur with everything that Hugh has said - except the new rental law was ratified by Spanish parliament in March so now it is in "law"

The new builds are not sold, they build first and try and sell them while the building is ongoing, if they don't sell any the building stays empty, how developers convince banks to lend money on new builds is beyond me!

As for new owners (buyers) they know nothing when they buy, trust me!

In "La Cala" small town just down the road from where we live was a crappy "one horse town" in 2004 - we looked but decided we couldn't live there.

Then the new Mayor brought Mijas town hall out of Mijas Puablo and placed it in La Cala, and then transformed the town. At this time of year you can't get into the place never mind park the car, it's a hive a good quality restuarants and is now a lovely little town (how wrong we got it!), new building is going on every where in La Cala, every day new cranes arrive, many of these 2 bed two bath apartments are selling for 400,000 euros, and people are buying them! I don't think this bodes well for the future, there will be more repossessions and more tears for buyers especially if Europe (and the UK) slips into a recession i can see massive problems on the horizon for our area and Spain in general.

Let's hope i am wrong.  

This message was last edited by CostaBlade on 23/07/2019.

This message was last edited by CostaBlade on 23/07/2019.

Not to worry if it’s not your money, why should you care?

As an owner in a Community of Owners, it is everyone’s money, if we all contribute as per our commitment.

There do appear to be conflicting reports on numbers of unsold properties across Spain but it would seem, mortgage lending on new builds is increasing, again and sales are still picking up in certain areas.

https://murciatoday.com/murcia-property-market-activity-growth-outstrips-national-average_1040284-a.html

A couple of informative websites which include some rental details, which might assist

https://www.spanishpropertyinsight.com/2019/07/19/quarterly-market-report-spring-2019-part-i/?utm_source=Spanish+Property+Insight+News+Bulletin&utm_campaign=1e50daf796-SPI-NB-160818_COPY_01&utm_medium=email&utm_term=0_5c1bbc37e8-1e50daf796-137954973

https://surveyspain.com/2019/04/23/spanish-property-market-report-winter-2019/