COMMUNITY OF OWNERS AND ITS DEBTORS

On the 26th of June 2013 new regulations came into force which have resulted in changes in the Horizontal Property Act, amongst which is one that has special importance for the Community of Owners regarding the collection of community debts.

The communities of owners due to the economical circumstances have suffered a considerable increase of debtors of community fees which in may cases does not allow them to fulfill their work or forces them to initially distribute the cost of the service amongst a few solvent owners, thus the owners that pay are the one that suffer the consequences in both cases.

The changes provide that the new owner of a Real Estate property belonging to a Horizontal Division has to take over the community debts of the former owner, which include the apportion of the fee of the current year up to the date of the purchase and the outstanding debts of the 3 years prior to buying the property. Also the law provides for the preferential nature of these debts with the community in respect of other charges, this means that the law gives the communities of owners the right that its debt up to the amounts stated (part of the current year of community fees up to the date of the purchase and the three previous years) are paid before others, as for example the mortgage loans. In addition to this the property is legally affected to the fulfillment of this obligation. Before these changes took place the law limited the responsibility of the new owner and the affection of the property only to the debt of the apportion of the current annual fee up to the purchase and the year before.

These changes are beneficial for the communities of owners as they establish the preference of the credit and also the assumption of former community debts prior to the purchase by the new buyer for a longer period, therefore improving their rights and the possibility to recover community fees. This will also result that whenever there is a transfer of the property the community is consulted to check the state of charges and request a certificate that the property is up to date in the payment of fees, or, if there are debts due that the necessary amount is retained to arrange for the payment of the outstanding fee to the community.

Taken into account that numerous properties are transferred with community debts this is an important change, that should allow the communities to receive payment of a bigger part of the outstanding community fees. However, the collection of debt and regularization of the community service will only be achieved once the property market is reactivated and there is an increase in the number of transactions.

Please note the information provided in this article is of general knowledge only and is not to be construed or intended as substitute for professional legal advice.

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