Property News
Do You Have To Pay Community Fees On Your New Spanish Home?
When you buy a home in Spain it’s important to know the various expenses and taxes that you have to pay. It is very common in Spain, for instance, to have to pay community fees to cover those expenses in a building or subdivision that are collective, or community-wide in nature.
These community fees (‘cuotas de comunidad), are very common in Spain, covering every apartment building and many suburban developments. They ensure that the maintenance and repair of shared facilities in the community takes place on a regular basis.
According to the Spanish “Horizontal Law”, the details of how community fees work are laid out clearly. In terms of regular or recurring costs, these can include electricity and water bills for common areas. There is also cleaning of shared spaces such as hallways and elevators. It can also include concierges or gardeners, and lift maintenance. Community fees are also applied towards insurance for communal elements such as the building structure.
There are also extraordinary costs that can arise from time to time, for instance if repairs are required to a pool or a roof in an apartment building. Extraordinary costs can also include upgrades that the community agrees upon. Such fees are determined by vote by community members.
HOW ARE FEES CALCULATED?
The division of community fees in Spain is not arbitrary. It’s based on a system that takes into account the size and location of your property within a development. Each property is assigned a ‘participation quota’ or ‘cuota de participación’.This determines that property’s share of the community expenses. This quota is typically calculated based on the square meterage of your property in relation to the total area of the development. Larger properties will pay a higher percentage of the overall fees.
Your participation quota also influences your voting rights in community decisions. Owners of larger properties are given a higher percentage of the vote to reflect the higher fees that they pay. This quota is not set in stone. The community of owners can vote to change how expenses are distributed. However, this requires unanimous agreement at a homeowners’ meeting and must be registered with the Land Registry to be valid.
Also, in larger communities, economies of scale can reduce the fees paid by each homeowner. For instance, if there’s ten houses that have to pay for the maintenance costs on a pool and cabana, that will cost more per unit than if there’s twenty-five.
HOW MUCH CAN I EXPECT TO PAY?
The amount you’ll pay in community fees can vary a lot. It depends on the services and amenities provided by your development. In older buildings the ongoing community fees may only need to cover cleaning hallways and elevators. In this case, you might pay as little as €50 per month. On the other hand, a high-end developments may have a pool, gym, security, landscaped gardens, etc. In this case, fees could be more than €1,000 every month.
These fees can change as well. The community budget is typically agreed upon annually at the Annual General Meeting (AGM). Fees may be adjusted based on planned expenses for the coming year. This will only rarely increase above the rate of inflation but it is possible. We always advise clients to tread carefully when buying in a new development as
DO I HAVE TO PAY COMMUNITY FEES & WHAT HAPPENS IF I REFUSE?
The short answer is yes. You must pay community fees if you own a property in a development or a building with shared facilities. This obligation is enshrined in the Horizontal Property Law, mentioned above.
Refusing to pay these fees can have serious consequences. A community association will first contact a debtor requesting payment for amounts owing. If someone continues to neglect their payments the community association can escalate to getting a court order and even, in extreme cases, force the sale of a property to cover arrears.
Even if you don’t use certain communal facilities, such as the pool or elevators, you’re still obligated to pay for them. The law considers that all owners benefit from the overall maintenance and services provided to the community, regardless of whether you individually use it or not.
HOW DO I FIND OUT WHAT THE COMMUNITY FEES ARE BEFORE BUYING A HOME?
Your real estate agent and/or your lawyer can ensure that you are informed of any and all fees associated with a property, including community fees. You don’t want to find this out by surprise as it can be a substantial amount in an exclusive property. You can request to see the minutes of the community’s Annual General Meeting. Besides getting a record of fees and increases, it can also be useful to ensure that the community is solvent. It will also indicate if there are any major outstanding repairs – which you will suddenly have to help pay for. Have your lawyer look over these documents for you so that you don’t miss anything.
IF THE SELLER HASN’T PAID THEIR FEES AM I RESPONSIBLE TO PAY THEIR FEES OWING?
It’svery important to make sure that all outstanding debts, including community fees, are settled before you close the sale on a home. If there are any unpaid fees your lawyer can ensure that the outstanding amount is reduced from the agreed upon selling price – or verify that they are settled before signing the deeds. If you buy a property with outstanding fees, according to Spanish law, you become responsible for those debts. Don’t let this slide.
In conclusion, community fees are a commonaspect of property ownership in Spain. While they do represent an ongoing cost, they ensure the maintenance and improvement of shared facilities. That can enhance your quality of life and protect your property’s value.
It’s important to know what the community fees are for your property and what they cover, as well as any planned community upgrades or repairs.Speak to your real estate agent and to your lawyer before you sign anything.
By Adam Neale | Property News | October 16th, 2024
