Almost all properties that are part of a development ( urbanización) are community properties. In general, the only properties that don’t belong to a community are detached houses built on individual plots in public streets or on rural land. Owners of community properties not only own their homes, but also own a share of the common elements of a building or development, including foyers, hallways, passages, lifts, patios, gardens, roads, and leisure and sports facilities (such as swimming pools and tennis courts). When you buy a community property you automatically become a member of the community of owners, which includes some two-thirds of foreign property owners in Spain.
Many community developments are located in or near coastal resorts and offer a range of communal facilities such as a golf course, swimming pools, tennis courts, a gymnasium or fitness club, a bar and restaurant. Golf homes are popular, as no one can build in front of you and spoil your view and you can consider the golf course as your lawn and garden. They also usually include discounts on green fees or even ‘free’ golf membership. Most developments have landscaped gardens and some also offer high security and a full-time concierge ( portero). At the other extreme, cheaper, older developments may consist of numerous cramped, tiny studio apartments with few, if any, amenities. Note, that many community developments are planned as holiday homes and aren’t attractive as permanent homes.
If you’re buying a holiday home that will be vacant for long periods (particularly in winter), don’t buy in an apartment block where heating and/or hot water charges are shared, otherwise you will be paying towards your part-owners’ bills. This is unusual in resort areas, although water and rubbish collection may be charged communally. You should also check whether there are any rules regarding short or long-term rentals or leaving a property unoccupied for long periods.
Note that when buying in a large development, communal facilities may be inundated during peak periods, e.g. a large swimming pool won’t look so big when 100 people are using it and getting a game of tennis can be difficult during peak periods.
To find out more about community ownership you can obtain a copy of The Community of Owners published by Ciudadanos Europeos (www.c-euro.org).
The advantages of owning a community property include increased security; lower property taxes than detached homes; a range of community sports and leisure facilities; community living with lots of social contacts and the companionship of close neighbours; no garden, lawn or pool maintenance; fewer of the responsibilities of home ownership; ease of maintenance and the opportunity to live in an area where owning a single-family home would be prohibitively expensive, e.g. a beach front or town centre.
The disadvantages of community properties may include excessively high community fees (owners may have no control over increases), restrictive rules and regulations, a confining living and social environment and possible lack of privacy, noisy neighbours (particularly if neighbouring properties are let to holiday-makers), limited living and storage space, expensive covered or secure parking (or insufficient off road parking), and acrimonious owners’ meetings where management and factions may try to push through unpopular proposals. Note that unless it’s prohibited under the community rules, anyone can buy up community properties and turn them into timeshares.
Before buying a community property it’s advisable to ask current owners about the community. For example:
- Do they like living there?
- What are the fees and restrictions?
- How noisy are other residents?
- Are the recreational facilities easy to access?
- Would they buy there again (why or why not)?
- Is the community well managed?
You may also wish to check on your prospective neighbours and if you’re planning to buy an apartment other than on the ground floor you may want to ensure that the building has a lift. Upper floor apartments are colder in winter and warmer in summer and that you may incur extra charges for the use of lifts (they do, however, offer more security than ground floor apartments). An apartment that has other apartments above and below it will generally be more noisy than a ground or top floor apartment.
If you’re planning to buy a community property, it’s important to ensure that it’s well managed and that there aren’t any outstanding major problems. If there are, you could be liable to contribute towards the cost of repairs, which could run into many thousands of euros.
Unfinished Urbanisations in Spain
In view of the problems encountered by buyers in the past, some experts advise people not to buy a property in a community development where the infrastructure isn’t complete. In many unfinished developments, owners have been required to pay a special contribution ( contribuciones especiales) for the absent or inadequate infrastructure (which they’ve already paid for in the purchase price), with costs often running into thousands of euros per owner.
Many developments never become fully legal and are without proper roads, lighting, mains sewage and sometimes even water. In some communities, owners have been fighting (unsuccessfully in most cases) for years to get the infrastructure finished.
In an apartment block or community development, the developer divides the costs of the communal areas between the owners, who must form a community of owners. You should never buy a property in an urbanisation where there isn’t a legal community of owners.
To be legal, a community of apartments or townhouses must be registered at the property registry office ( Registro de la Propiedad) or in the registry of conservation entities ( Registro de Entidades de Conservación) if it consists of detached villas. Some communal areas (such as roads) may be cared for by the local municipality, provided it has approved the urbanisation and has included it in its general plan for the municipality.
An approved urbanisation has the same right to public support as any other part of a municipality. Before buying a community property, it’s essential to obtain a copy of the law of horizontal division ( ley de propiedad horizontal) and the community rules and have them explained to you. Spanish law requires that all communities have their own set of rules ( estatutos) which identify property that’s owned privately ( cosa privativas) and property that’s owned communally ( cosa comunes).
Community properties vary enormously in price and quality; for example, from around €80,000 for a studio or one-bedroom apartment in an average location to hundreds of thousands of euros for a luxury apartment, townhouse or villa in a prime location. Garages and parking spaces must usually be purchased separately in developments, where a lock-up garage or a space in an underground car park usually costs between €15,000 and €40,000.
If you’re buying a resale property, check the price paid for similar properties in the same area or development in recent months, but bear in mind that the price you pay may have more to do with the seller’s circumstances than the price fetched by other properties. Find out how many properties are for sale in a particular development; if there are many on offer you should investigate why, as there could be management or structural problems. If you’re still keen to buy, you can use any negative points to drive a hard bargain.
Owners of community properties must pay community fees ( gastos de comunidad) for the upkeep of communal areas and for communal services. Charges are calculated according to each owner’s share ( cuota de participación) of the development or apartment building and not whether they’re temporary or permanent residents. Shares are usually calculated according to the actual size of properties, e.g. the owners of ten properties of equal size usually each pay 10 per cent of community fees. The percentage to be paid is detailed in the property deed. Shares not only determine the share of fees to be paid, but also voting rights at general meetings.
Fees go towards road cleaning; green zone maintenance (including communal and possibly private gardens); cleaning, decoration and maintenance of buildings; caretaker (janitor); communal lighting in buildings and grounds; water supply (e.g. swimming pools, gardens); insurance; administration fees; urbanisation rates; maintenance of radio and television aerials and satellite TV charges. Fees are divided among owners according to the share of the utility allocated to each property. Always check the level of general and any special charges before buying a community property.
Fees are usually billed monthly or biannually and adjusted at the end of the year when the actual expenditure is known and the annual accounts have been approved by the committee. If you’re buying an apartment from a previous owner, ask to see a copy of the service charges for previous years and the minutes of the last annual general meeting, as owners may be ‘economical with the truth’ when stating service charges, particularly if they’re high. You should obtain receipts for the previous five years (if applicable).
Community fees vary considerably depending on the communal facilities provided. For example, fees for a small studio apartment in a small, older block may be as little as €150 a year, whereas fees for a large luxury penthouse in a modern prestigious development can be over €3,000 a year. Fees for a typical two-bedroom apartment costing around €120,000 are €300 to €1,000 a year, although in ‘luxury’ communities they can be well over €3,000. High fees aren’t necessarily a negative point (assuming you can afford them), provided you receive value for money and the community is well managed and maintained. The value of a community property depends to a large extent on how well the development is maintained and managed. Note, however, that less than half of all communities in Spain are considered to be well run!
Non-payment of Fees
In the past, many communities had severe debt problems because of the non-payment of fees, which in turn led to the management failing to maintain facilities such as lifts, lighting and security systems when they broke down. However, this problem has been largely eradicated with the introduction of a community law in 1999, under which it’s much easier to embargo the property of owners who don’t pay their community fees and, if necessary, force a sale.
The proceedings (called procedimiento monitorio in article 21 of the law) now take around three months only, commencing with a demand ( demanda) in court signed by the president and administrator of a community. After a case has been admitted, the judge asks the debtor to deposit the amount owed within 20 days and an announcement is placed in the province’s ‘official bulletin’ ( Boletín Oficial de la Provincia/BOP). If he doesn’t pay, an embargo is placed on the property and if the debt is still unpaid or additional debts are accrued, the property can be forcibly sold at a public auction at the request of the community representatives.
If you own a second home in Spain that you visit once or twice a year, it’s important to ensure (double check!) that all bills are paid in your absence, otherwise you could find that when you return to Spain your home has been sold to pay bills!
Maintenance & Repairs
If necessary, owners can be charged an additional amount to make up any shortfall of funds for maintenance or repairs. You should check the condition of the common areas (including all amenities) in an old development and whether any major maintenance or capital expense is planned for which you could be assessed. Old run-down apartment blocks can have their community fees increased substantially to pay for new installations and repairs (such as a new water supply or sewage installations).
Always enquire about any planned work and obtain a copy of the minutes of the last annual general meeting where important matters are bound to have been raised. Owners’ meetings can become rather heated when finances are discussed, particularly when assessments are being made to finance capital expenditure. The law on communities introduced in 1999 requires the establishment of a maintenance reserve fund equal to a minimum of 5 per cent of the annual ordinary budget.
A community of owners or Property Community has an elected president ( presidente) and a paid administrator ( administrador de fincas), who may be a professional administrator from outside the community. The general running of a community is carried out by the administrator, a position that’s automatically assumed by the president if an administrator isn’t elected.
The community of owners must be registered with the Gobernador Civil (the official government representative) in the province and community books and documentation must be in Spanish, although they can be translated into other languages for owners. All owners are required to attend an annual general meeting to discuss the annual fee and to elect the president and committee members, although owners can name someone to represent and vote for them by proxy ( poder or autorización).
Meetings of the community of owners are usually held in Spanish, although they can be held in another language if everyone is in agreement. The owners attending or voting at a meeting must hold at least 50 per cent of community property in order to pass a resolution; however, if 25 per cent of owners disagree with a resolution and consider their rights have been neglected, they can apply to a judge within one month for a decision.
Changes in the Memorandum and Articles of Association require unanimity, while most other decisions require a majority of 60 per cent or a simple majority (51 per cent), the exception being the installation of communications equipment (e.g. satellite dishes), solar or electrical energy, which requires approval by just a third of owners. Meetings can be acrimonious, particularly when there’s a mixture of nationalities and of resident and non-resident owners.
Community rules allow owners to run a community in accordance with the wishes of the majority, while at the same time safeguarding the rights of the minority. Rules usually include such things as noise levels, the keeping of pets (usually permitted, although some communities prohibit all pets!), renting, exterior decoration and plants (e.g. the placement of shrubs), rubbish disposal, the use of swimming pools and other recreational facilities, the activities of children (e.g. no ball games or cycling on community grounds), parking, business or professional use, use of a communal laundry room, the installation and positioning of satellite dishes, and the hanging of laundry. Check the rules and discuss any restrictions with residents.
This article is an extract from Buying a home in Spain. Click here to get a copy now.