Comunidad de Propietarios: Avoid Problems with Your Neighbours in Spain

Raymundo Larraín Nesbitt - Lawbird Legal Services
26th of June 2009

On buying property on a development or in an apartment block you will become a member of what is known as a “Community of Owners” (Comunidad de Propietarios, CO for short). A Spanish Comunidad de Propietarios is composed of all the owners of property within the same development or building.

The gist of this article is to give some guidance on what becoming an owner in a community implies, with particular focus on Andalucía. I strongly recommend reading the Commonhold Act (English) itself as I have considerably abridged the sections pursuant to it, on reviewing them, giving only a brief overview of what they entail.

General Legal Framework

There is a general nationwide legal framework acting as a common denominator to all communities in Spain, set out by the Commonhold Act 49/60 (aka Ley de Propiedad Horizontal orHorizontal Property Act) and by the Spanish Civil Code (arts 396 et seq). The Law on Horizontal Property was amended most significantly by Law 8/99, amongst others, to update it to social reality.

Bylaws and Rules of the Comunidad de Propietarios

In addition to the above general laws, the day-to-day running of each community is really determined by the Communities’ Bylaws (Statutes) which are drafted at the time of lodging the Master Deed (aka Escritura de División Horizontal or Horizontal Deed). Unanimity is required to amend either the Master Deed or the Community Statutes (arts 5 and 17). So in practice it’s quite a feat to change either of them.

That’s why a community may, at its discretion, approve its own Community Rules (in Spanish Normas de Regimen Interno or Normas de Funcionamiento de la Comunidad de Propietarios), not to be confused with Community Statutes. These Community Rules need only a simple majority vote to be approved and amended so as to waive the unanimity rule. They allow for great flexibility and will rule, for example, on communal services such as garbage collection or the use of communal facilities such as the swimming pool or lifts. They cannot rule on matters reserved only to Bylaws.

Normally, on buying off plan, there will be a clause by which the purchaser allows the developer to draft and lodge the Master Deed as well as the Community Statutes at the Land registry. Owners may later on amend these, complying with the strict majorities that are required by the Commonhold Act (unanimity).

This means that every development may enact their particular laws governing it but always subject to, and, in compliance with the general legal framework that must be respected at all times. Bylaws will rule for example the Community’s governing bodies such as the need or not of the role of a vice-president or how must the owners be notified in advance of an owner’s assembly.

Bylaws stem from Spain’s Commonhold Act and adapt it to the requirements of each particular Community of Owners.That’s why each Comunidad de Propietarios has its own unique Bylaws, tailored to suit their individual needs. Naturally, in this article I can only offer a general overview of the shared legal framework and concepts which underpin all communities without focusing on particular Bylaws, which are unique to each Community of Owners.

Commonhold Quota

On drawing up the Master Deed before a Notary, every property within the community is assigned a quota or percentage thereof. This quota is composed both of privative and communal elements which are assigned to each property. Store rooms and garages are included as well for this purpose.

This quota is important mainly for two reasons:

Because the expenses of the community will be allocated in proportion to your quota. So the larger the quota, the more you will have to pay.
Secondly, on voting at owners’ assemblies, the quotas need to be tallied for majority vote purposes. So, each owner does not equate to one vote. There may be a single owner, such as a developer, holding a significant communal quota which translates into great voting power. The resolutions reached bind all units within, regardless of whether they cast an opposing vote as majority rules apply (read below).

Owners’ Duties

Section 9 rules them in detail. The main duty will be, of course, to contribute to the maintenance and financial upkeep of the Community of Owners.

Failure to pay the community fees will result in the Community of Owners placing a lien against your property and possibly auctioning it off. This legal procedure in Spain works surprisingly efficiently. You have been warned!

This important article mentions as well the endowment of the communities mandatory reserve fund, in accordance to each owner’s commonhold quota. The purpose of this fund is to create a financial pool for the maintenance and repair of the building i.e. façade’s flaked painting or lift repair work. This reserve fund shall be endowed with an amount not lower than five percent of its last ordinary budget. Its funds will be used as well to pay for the building’s insurance cover.

On buying a resale in a community, the new owner will be held liable for the prior owner’s communities’ debts for the current year of transfer of ownership as well as the natural year immediately precedent (art 9 e). The property itself will be burdened with a lien for unpaid communal debts.

Which is why under law, the signing of the deed of transfer of ownership requires a Communities’ certificate stating that communal fees are up-to-date for that unit, signed by the communities’ administrator. The purchaser can however waive this requirement voluntarily.

Governing Bodies of a Comunidad de Propietarios

Art 13 establishes the governing bodies are the Owners’ General Assembly (whether annual or extraordinary), the president (vice-presidents are optional), the secretary and the administrator.

Presidents and vice-presidents must be appointed from among unit owners only. The roles of secretary and administrator can be held by unit owners as well as by outsiders providing the latter hold the necessary professional qualifications and are legally licensed to perform such roles.

The Statutes will be the ones which detail exactly what roles exist in each Community of Owners.

Community of Owners’ Assembly (AGM’s and EGM’s)

At least once a year an AGM will be called to approve the budget and accounts. An EGM may additionally be called at anytime, needing 25% of the unit owners’ quotas.

The notification must be given with a minimum of 3 days’ notice. This creates practical problems to non-residents owning second homes in Spain. Therefore, communities with a high number of non-resident owners may include in their Bylaws more realistic notices of, say, 14 days and to be notified by email in addition to placing it on the Community’s Notice Board. There’s freedom and flexibility to rule on this as each community deems fit in accordance to their own needs and circumstances.

Majority and Unanimity Votes

Section 17 deals with when unanimity votes are required. Basically, unanimity is necessary for modifying the rules contained, either in the Master Deed or in the Community’s Bylaws.

A majority vote (three fifths of the owners’ assessed quotas) is required for things such as the lift service, janitors, security services or any other common service or facility. This type of majority vote will be the one used to decide on the Community Rules. Proxy votes are also allowed. Only owners who are up-to-date with their community fees may vote at owners’ assemblies.

You may find that in new unsold off plan developments, a developer may hold the majority vote as he still holds a large stock of unsold units. Conversely, it can be its lender, if they have taken over the developer’s units. Either way, they are both obliged to contribute to the communities’ upkeep, paying their communal fees in proportion to their communal quotas, like everyone else.

Resolutions of the General Assembly

Section 19 deals with the recording of the resolutions reached. They will be recorded in a book of minutes, validated and stamped by the Land Registrar. A copy of the meeting’s minutes will be sent to each owner with the adopted resolutions following the AGM or EGM. The secretary will act as the custodian of the general meetings minutes book.

Challenging the General Assembly’s resolutions

Section 18 rules on how assembly resolutions can be challenged at court.

This can be done on three accounts:

Whence such resolutions are contrary to Law or the Community Statutes;
On them being seriously detrimental to the interests of the community and benefit one or several unit owners.
Whence they are seriously detrimental to some unit owner who has no legal obligation to sustain such detriment or when they have been adopted in abuse of power.

There’s a deadline of just 3 months to challenge them after they were adopted or else a year if they are contrary to Law or the Community Statutes. Only owners who are up-to-date with their community fees may challenge community resolutions before a court. Alternatively they can lodge the owed amounts before the law court prior to litigating.

Comunidades de Propietarios in Andalucía

Following arts 7 & 9 of Decree 218/2005, off plan vendors of property located within the autonomous region of Andalucía must hand over the DIA (Documento Informativo Abreviado) to purchasers. The DIA is the Spanish equivalent of the UK’s HPI, Home Purchase Information, or Seller’s pack. Both the Community’s Statutes and Community Rules must be included in the DIA pack.

Conclusion

The bottom line is that Community Statutes or Bylaws are the ones that really rule each community and are unique. No community has the same statutes as another.

It is always highly advisable that, prior to purchasing property on a development, you always request a copy of the Community Statutes, known in Spanish as Estatutos de la Comunidad de Propietarios, as well as the Community Rules, if existent. You may avoid unpleasant surprises, such as communities that ban domestic animals or even piano players!

Communities of Owners should be run, in theory, like small tidy democracies. Well, that’s the theory anyhow. In practice, they resemble more dictatorships with full blown egos as many owners can vouch for. I would advise you bring your tin hat to owners’ assemblies and prepare for some serious and protracted trench warfare, whereby each owner will hold his own ground, yielding occasionally to fleeting interests.

Maybe it’s a good idea to bring along a Spanish lawyer as added reinforcements!

Good luck; trust me, you’ll need it!