THE IMPORTANCE OF A COMMUNITY IN THE SALE AND VALUE OF A PROPERTY IN SPAIN
WHEN A buyer acquires a property in Spain that belongs to a community this person is not only investing in the property but also the community it is located in. This may be beneficial or negative depending on the way that the community conducts itself. A community has to be created by law if there is community property i.e. a swimming pool within its ownership. This applies to all types of property even where townhouses have a communal roof. The Spanish law that applies to communities is the Horizontal Property law. Many buyers of community property bought off-plan in the boom years in Spain and consequently there was no community existing when they signed to buy their property, and consequently it did not have any influence on their decision to purchase. Today things are very different, where a lawyer acting for the buyer will ask to see the Minutes & Accounts of the community to form a view on the community that his client is buying into.
Hence a poorly run community which is not meeting its obligations to maintain & administer its affairs in a businesslike manner, or which is unable to agree expenditure for improvements or renewals is not a attractive proposition to buy into, leaving the seller in a situation where his investment has lost value to the market. On the reverse side a well run community with good members acting in the majority in their community becomes an attractive proposition to buy into adding value to the owner's property & giving it the edge in selling in a competitive market. I am asked many similar questions by Presidents & owners in communities these usually follow on the lines as follows:
Q. Can I as President be the Administrator as well, and is this of benefit to the community?
A: Yes, the President can also be the Administrator and yes this can be beneficial to the community in the day to day control, particularly with regard to the collection of service charges from the members, efficiency in the day-to-day running of the community, and it also should lead to lower expenses & savings on administration costs.
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Q. I do not receive notice of meetings, minutes or accounts of the community?
A: This is bad administration and the information can be recovered from the Administrator by formal request (in writing by certificated post is recommended). A well run community usually has a community website which provides transparency to its records with historical accounts, minutes and information on the next forthcoming meeting with regard to its agenda and status (ordinary, extra ordinary or annual). The law provides for a meeting to have a 51% attendance to vote on matters but it is normal that the meeting will have two times, 30 minutes apart, where by the second later meeting time does not require this quorum and consequently a small number of owners are able to steer the community in their preferred direction. If you find out about a meeting that you disagree with the outcome of, you are entitled to go to court within 3 months of this discovery to make an application to have the meeting made invalid.
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Q. The community meetings are in Spanish and so are all the subsequent documents and I do not understand what is happening in the community?
A: Documents that need filing legally in Spain with the appropriate authority have to be in Spanish. However by majority of owners vote the language of the meetings can be changed to English or any other language; this changes the minutes and other written documents of the community too. It is considered good practice by an Administrator to have the appropriate language skills available for community members.
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A: This fund will be the result of an extraordinary general meeting convened to approve a major spend by the community. Often this is to paint the whole building. The minutes of the meeting should provide for record of the use of the money & also the approval of the competitive tendering for the cost of works provided to the community at this meeting by-the community officers. The new funds paid should be paid to a separate community account to provide for these works & the President & community officers are obliged to provide details of the conduct of these funds at a community meeting.
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