Overdue fees in homeowners’ associations in Spain affect both financial stability and neighborly relations. Although it is a common issue, it can be effectively addressed by following the right steps and utilizing the applicable legal framework. According to recent data, there are 1.2 million homeowners’ associations in Spain, managing approximately 40 billion euros annually, making unpaid fees a significant challenge.
What Does It Mean to Have Outstanding Community Fees?
The property owner is solely responsible for paying regular and special community fees, not the tenant in the case of a rental. Failing to meet a payment deadline results in overdue fees, which can affect the reserve fund and any special assessments necessary for improvements or urgent maintenance.
If the association does not specify a due date for payments, the outstanding balance is considered overdue once the month in which the fee was due has ended.
Legal Measures Available to Homeowners’ Associations
1. Restriction of Common Services
The revised Article 21 of the Horizontal Property Law allows homeowners’ associations to restrict access to non-essential communal services, such as pools or gyms, for owners with unpaid fees. However, more drastic measures, such as denying access to the elevator, are considered disproportionate and are typically rejected by the courts.
2. Imposing Late Payment Interest
The association can decide in a general meeting to apply interest rates higher than the legal minimum as a deterrent against overdue fees. This decision must be impersonal and non-retroactive, applying only to the periods in which the homeowner has defaulted on payments.
3. Legal Claims: The Payment Order Procedure
The payment order procedure is a fast and efficient legal avenue to claim unpaid dues:
- The association must calculate the outstanding fees and verify the registered owner of the property.
- A general meeting must be called to approve the legal claim and formally notify the homeowner of the outstanding balance.
- The claim is filed in court with supporting documents.
If the homeowner neither pays nor disputes the claim, the process concludes, and the association can request the enforcement of payment through asset seizure.
Consequences of Unpaid Fees for the Community
Outstanding community fees impact the association in several ways:
- Increased fees for other neighbors, causing dissatisfaction.
- Delays in essential maintenance and improvements due to a lack of available funds.
- Internal conflicts that disrupt neighborhood harmony.
Guarantees for Recovering Debt
The Horizontal Property Law and the Spanish Civil Code provide several mechanisms to help associations recover unpaid fees:
- Priority in collection: Fees corresponding to the current year and the previous three years take precedence over other debts in foreclosure proceedings.
- Joint liability: If the property is sold, the new owner is responsible for any unpaid debts alongside the previous owner, up to a legally established limit.
Additionally, notaries are required to request a debt certificate from the seller in any property sale, unless the buyer explicitly waives this requirement.
The Role of the Property Manager
A professional property manager plays a key role in handling overdue fees by:
- Accurately tracking outstanding debts and notifying homeowners.
- Facilitating out-of-court settlements to avoid legal disputes.
- Issuing debt certificates with legal validity, essential for initiating a payment order procedure.
Conclusion: The Importance of Professional Management and Prevention
Overdue fees in homeowners’ associations in Spain can be challenging, but with legal tools, professional management, and preventive measures, their impact can be minimized. Establishing clear policies and hiring a qualified property manager is crucial to maintaining the association’s financial stability and fostering a harmonious living environment.
If your community is facing issues with unpaid fees, contact us at Property and Community Management. You can also check our article Community Rules and Regulations to learn more about the guidelines governing homeowners’ associations.
