What do you need to know about the Spanish Horizontal Law?
We tell you everything you need to know about Spanish Horizontal Law to be able to correctly manage a property or a community of neighbors.
I suppose that an ex-pat who just bought a nice apartment near the beach may be astounded to find out that a community owner may entail some thorny business. Ignorance of these areas’ rules and regulations can cause frequent friction and disputes.
He or she may come home one day to find that someone has installed clotheslines right in the middle of the very nice internal patio. The communal roofs have been converted into private terraces; gardens transformed into football pitches etc.
Unpleasant clashes between co-owners
Common areas are usually a source of conflict for the neighbouring communities. So much so that often the problems arising from their use and enjoyment may end up in unpleasant clashes.
Frequently, the abuses of the use of these common areas are due to the lack of knowledge of the communities of owner’s rules and legislation.
The problem may start when someone who commenced as a nice friendly neighbour at a specific moment, uses a particular common area for their own particular interests. Mind you, they are in their right, be known that this practice is absolutely legal, but with nuances.
Prevent greater evils
The Spanish Horizontal Law and Article 396 of the Civil Code, allow a single neighbour to enjoy certain common areas, but always with respect for other residents and the rules of the community, which should reflect the privileges and the consequences of its enjoyment.
To prevent greater evils, I recommend implementing restrictions on the use of common areas as soon as the first General Annual Meeting take place, otherwise, some neighbours may think that the pool, for example, belongs to them, showing a complete disregard for the interests of the rest of owners. That is why the norms agreed upon previously in a General Annual Meeting or the regulations that perhaps may have been incorporated in the urbanization bylaws by the property developer should be broadly displayed around the pool or common areas and if possible in various languages, depending on the nationalities of the owners. This simple solution could obviate a lot of headaches later on.
Any owner wishing to make a particular use of a common area of the estate or urbanization must request it from the community and this be incorporated in the bylaws if so approved by the General Meeting.
To release any common space for private use, the applicant shall communicate it in writing for inclusion in the agenda of the next GM, which will be required the unanimous vote of the owners. Once approved, the change must be incorporated in the deeds before a notary and registered in the land register.
Always obtain professional advice first
In any case, I strongly recommend obtaining professional advice from a solicitor or property manager before any approval is considered, as normally these sorts of changes could set into action all sorts of cumbersome repercussions.
When a dispute cannot be resolved through negotiation, community owners and neighbours can go to court or request arbitration, provided both parties are in agreement.
With respect to the invasion of common areas, the Horizontal Property Act provides means to combat this sort of event. To do this, a GM must be organized, empowering the President to make a request in writing to the offenders, and finally, if necessary to demand the owner via court action. This could be the case of an owner with a car larger than the average parking space who persistently invades the neighbours. According to Article 394 of the Civil Code, each owner can enjoy any common areas provided that do not harm the interest of the community and prevent other neighbours from using it too.
In covered garages, for instance, it is considered common areas the driveways, and spaces to carry out manoeuvres but not the parking lot itself. Therefore, when a situation affects any resident first it is advisable to politely contact the person who breaches the norm and expose the problem. In case no satisfaction is obtained from the neighbour, the administrator should be approached to include this issue in the agenda of the next GM to demand the termination of the over-extended use.
If, after a time, the neighbour does not change his attitude, the only alternative is that of civil court action. The demand may be brought by the community or by the affected resident/s themselves. If you opt for the courts of justice, it is recommended to ask an expert (normally a notary) to report or testify about the existence of this infringement to the judge.
Spanish Horizontal Law
Which are the common areas or elements of a building or urbanization?
Generally, they are the following, although on some occasions there may be exceptions due to the idiosyncrasies of the building itself.
- Floor slabs, overhangs, foundations and roofs.
- Structural elements such as pillars columns, beams, slabs and load-bearing walls.
- Facades, including their finishes, balconies and windows, including their aesthetics or configuration, the enclosing shell elements comprising them and their external finishes.
- Entrance hall, stairs, corridors, stairs, courtyards, wells and cabinets intended for lifts, tanks, meters, installations or other services or common facilities.
- Lifts and installations, water pipes and drainage pipes for and for the supply of water, gas or electricity, and now days any installation for the common use of solar energy.
- Installations of sanitary hot water, heating, air conditioning, ventilation or exhaust fumes.
- Detection and fire prevention installations.
- Electronic door entry and other security within the building or external areas, as well as the collective antennas and other facilities for audio-visual services or telecommunications, all of these services up to the line of the estate boundary.
Small Communities and their special problems
The common denominators of small Communities of Owners are as follows: old buildings with old neighbours who are known by everyone pass away to be replaced by young newcomers. In this context, the main source of conflict is as in most occasions a question of money, yes, money makes the world go round and communities go smoothly but the lack of it only conveys problems.
The most common problems in real estate with few neighbours arise especially at the time of a major technical breakdown of an essential installation service such as a plumbing pipe, the lift, a falling cornice etc representing a major setback, especially for those on a low income and are obviously reluctant to invest in maintenance and reforms. In addition, due to the few neighbours in the building, each must pay more to cover expenses; hence it is avoided while it is possible. So when the problem arises everyone trembles since probably it will require a major reform such as repairing a façade, or the roof with an unexpected expense that most cannot afford.
The President is in charge
In an attempt to save money, the neighbours are guilty of neglect and have often postponed necessary reforms, for example, damage to the roof structure, which has remained unrepaired for years until finally, the damage is such that it is necessary to change it completely. In addition, many of these Communities do not have contracted a professional property manager, so it is the elected President who is in charge to keep up to date with the accounts and to take appropriate actions against those owners who have not kept up with Community expenses. It is not easy to be the president of a Community of Owners and keep up to date with all bills on water, cleaning, landscaping, maintenance, managing the necessary paperwork with local authorities etc.
It is necessary to be knowledgeable and invest much time in these efforts. The Horizontal Property Law, which governs the communities of owners, establishes that the President is responsible for all this, even though it can be delegated to a property manager (administrador de fincas) paid by all proprietors, an option that I strongly advise.
Another of the most common problems in real estate with few neighbours is an owner’s late payment of community expenses. What to do before a neighbour does not pay what it is owed? No time limits are laid down by law, so the margin granted to this neighbour depends on each community. In any case, it is usually first to claim the debt in writing and from three pending receipts.
How are the community expenses shared?
The law clearly lays down how the costs in the community must be dealt with: the deeds of each property provide a coefficient of participation by the owner according to the covered area of actual floor space of the property, the orientation and its use (commercial units, housing, parking lots). There are cases where a community of owners have exempted an owner from certain payments. For example, a commercial unit with its own entrance wouldn’t pay the lift or cleaning costs of the main entrance to the building.
The biggest problem arises when a new owner lands in a community where neighbours have known each other for a lifetime; they have no idea about the Horizontal Law, do not have records of their general annual meetings and have agreed to share all expenses on equal parts. In this case, the newcomer has the right to challenge that decision and contribute to expenses according to the floor area ratio.
The most controversial decisions in small communities arise with the agreement of common elements, the modification of the exterior of the building or the installation of a much-needed lift required by law in a building with more than four plants.
As a general rule, all building residents are obliged to pay for the lift, if the majority want to install one. However, I have seen all sorts of odd agreements, for example, an agreement with owners of lower floors so that they allow some necessary work to be done on their property and excluding them from laying any money for the works in exchange for allowing the access of some installation though their property. I have also seen that the lift is restricted to residents who have paid for it and who pay for its maintenance so owners have keys giving access to the lift.
Let’s take for instance the usual leak on the ceiling.
Who will pay for it?
Who has to fix it? And above all, who will pay for it? When in doubt as to whether the leak is from a common area or not the best way is that a technical report should determine the source of the filtration. If the leak comes from the roof, or any other common element belonging to the building, all owners must pay their proportionate share, although usually it is covered by insurance on the property or it should be covered by the unforeseen expenses fund.
It is advisable and prudent that the community of owners should have at least 5% of the total annual budget for possible unforeseen expenses or any unexpected problem, and believe me in all buildings sooner or later their unforeseen problems and this percentage of probability is increased geometrically with the age of the building or property development.
Coming back to the origins of the filtration, if this proceeds from a concrete slab and affects the neighbour below for example, the neighbour above is normally accountable for the expense of fixing it up or his insurance.
Five tips to avoid problems in communities of owners.
I recommend five main tips to help you solve most problems within the community of owners before they occur.
- Try to understand the Horizontal Property Law, updated in 1999. If you don’t read Spanish have translated the main parts or chapters.
- Don`t wait to have a problem setting up a community of owners. Sometimes in buildings or property developments with few owners believe that if there is no community of owners there will be fewer expenses to worry about and that is so, until there is a major problem then it is extremely difficult to get everyone to agree to constitute a community at that particular moment or soon after when the problem has taken place. Creating a community of owners is mandatory when there are more than four owners.
- Do have at least the compulsory annual meeting and keep a record of all meetings. I know it is an effort for the president especially if there is no administrator appointed to do all the work but if there are no General Annual Meetings little can be said about having an annual budget and having available some money to deal with any contingencies that may arise in the least convenient moment.
- If the economy allows it, engage a property manager (administrador/a). If there is a professional who earns his/her fees, these are the property managers or the so-called “administrador” in Spain. These professionals manage the community, keep the accounts and deal with all individual problems, among other responsibilities. (I will explain below the main responsibilities of the property manager in Spain)
- It is much easier and less expensive to carry out any reforms little by little than to face one major unexpected construction problem. Normally when a disaster occurs there is little choice as to when the reparation needs to be carried out and as a rule, the time is now, and now is more often than not on a weekend or on a holiday season when labour charges are highest.
So, do plan any maintenance in advance and save money in the long run.
What are the property manager’s responsibilities?
Returning to the property manager’s responsibilities, these are specified in the regulation of the communities of owners, and all is set out on the Horizontal Property Law 8/999 of April 6th which reformed the 49/1960 law of 21st of July,
According to this law, the Property Manager, deals with the management of the affairs of the community, although sometimes their functions overlap with that of a Secretary with regard to the custody of documents, drafting of acts, etc., and represents the President in terms of realization of works of conservation of the property.
His engagement is for one year unless the statutes estate otherwise or unless his engagement is terminated due to lack of confidence by the community of owners, being necessary in this case an extraordinary meeting to be held and such matter agreed upon.
Very often a great professional.
The property manager is a professional with appropriate training for his duties. To access the title, there are currently only two formulas: the possession of certain higher university degrees (law graduates, economics…), or passing the courses of the Official School of Administrators, authorized by the Ministry of Development. This career is taught at eleven universities throughout Spain, with a minimum of 180 credits, and it takes a minimum of three years.
In any case, despite this series of problems I have mentioned above, it is also true to say that in small communities of owners, most problems are resolved through peaceful means, without having to go to court. In the end, after all, small communities are like a large family or aren’t they?