Community Debtors

Information and questions about the Law in Spain and Andalucia.
reallyspain
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Community Debtors

Postby reallyspain » Wed Mar 27, 2013 10:12 am

We own a property in an urbanisation in Andalucia & I have recently been appointed vice president of the community. A major problem for the community is unpaid quarterly fees. One of our owners, a Spanish resident has not paid for years and seems to be content to be subsidised by his neighbours. We commenced legal action some time ago but it seems to take forever. Also, for the other debtors we are told that it costs €900 to start legal action and we are reluctant to commit to that expenditure unless we have a fair chance of recouping our expenses along with the debt. There appear to be no sanctions we can impose on debtors other than a surcharge when & if they eventually pay up.

Has anyone had any success with debtors or any advice to offer?

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costakid
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Re: Community Debtors

Postby costakid » Wed Mar 27, 2013 7:59 pm

We have several Spanish non payer and our community is reluctant to waste money on court fees. It makes you wonder why we bother. They are the first to complain if anything goes wrong with the pool etc.

Our president says he will embargo them once the debt is a few thousand €uros. In the meantime we keep subsidising the knockers

reallyspain
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Re: Community Debtors

Postby reallyspain » Thu Mar 28, 2013 1:32 pm

That's quite depressing!
I'm interested to know whether we can impose any sanctions. What impact does "embargoing" have on the debtors?

ashtondav
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Re: Community Debtors

Postby ashtondav » Fri Mar 29, 2013 4:30 pm

That's quite depressing!
I'm interested to know whether we can impose any sanctions. What impact does "embargoing" have on the debtors?
None at all. If there is not enough money in his account.

I have posted numerous times on this board and others and no one can tell me when eventually an apartment is sold to recover the debt. You will probably have to wait until the apartment is sold and the new buyer inherits the debt.

We have been pursuing one debt through the courts for 3 years. I'll let you know when we have resolution.

In short there is no way to recover a debt like this in Spain. And in the meantime they have the right to use all community facilities and rent the place out should they so desire.

I'm tempted to just get some "heavies" involved.

reallyspain
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Re: Community Debtors

Postby reallyspain » Sat Mar 30, 2013 5:59 pm

Has anyone tried cutting off community supplied services from debtors' properties? The only example I can think of is the TV signal - not a huge impact but it might have nuisance value.

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Re: Community Debtors

Postby gus-lopez » Sun Mar 31, 2013 8:07 am

ashtondav wrote:

I'm tempted to just get some "heavies" involved.
A good lash across the shins with a baseball bat does tend to concentrate the mind ! :lol:
Todos somos Lorca.

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Re: Community Debtors

Postby ashtondav » Wed Apr 03, 2013 1:17 pm

reallyspain wrote:Has anyone tried cutting off community supplied services from debtors' properties? The only example I can think of is the TV signal - not a huge impact but it might have nuisance value.
Laugh. I almost p*ssed myself. This is Spain...

...oh no, you're not allowed to do anything sensible like that, or refuse them access to the pool. They can, will and do then sue you to restore their rights while they steal from other owners.

We have a charge over our debtor's bank accounts but its a fat load of use because there's no money in them. Meantime no one can tell me when or if the flat will be sold so debts can be paid.

Meanwhile the owner is making a nice wedge from renting the place out.

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fyfin
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Re: Community Debtors

Postby fyfin » Wed Apr 03, 2013 9:36 pm

This is so depressing but so true. I have recently been elected President (coerced more like) of a community of 31 apartments (we purchased our apartment in Oct 2010), and we also have the few (6 now) who have either handed the keys to the bank (strange how they still can come in now and again) or the 2 Spanish families who simply don't pay.

The banks don't want to take the apartments over because they then become liable for the unpaid community fees (current and last year only) so they are simply hanging on until they are sold (if ever).

I'm not certain what happens the fees for the previous years if an apartment is sold e.g. in one case the Spanish owner has paid nothing since the apartments were built 7 years and now sub-lets it. It is going through the court but it seems to take forever although i can't understand why we waited so long before we started court action (started 3 years ago).

Our Administrator is Spanish and I have great difficulty getting through to him regarding budgeting, the 25 owners who do pay understand that until the bad debtor situation is resolved we will have to pay extra but he insists on basing his budget on the basis that everyone is going to pay so there will always be a shortfall and then we have to make additional payments! I'm not convinced that he is chasing the banks or the court hard enough. The irony is that because us permanent residents are doing the cleaning ourselves to try and build up a reserve, he then took the cleaning out of the budget and reduced the fees! :crazy:

The other thing that puzzles me is an article I picked up from another website which makes it sound so easy to recover debts or at least force the apartment to be sold, hopefully to someone who will pay their community fees and if they don't, then, say after 6 months in arrears, place an embargo right away.

I'm just thankful that we have 25 who do pay and I wish someone could tell us of a success story but I think because there are mortgages involved and possible negative equity then some of these defaulters have basically nothing to lose. Anyway here is the text I copied from another website.

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!
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reallyspain
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Re: Community Debtors

Postby reallyspain » Thu Apr 04, 2013 2:23 pm

Thank you to all who have replied. I do appreciate it and feel less alone in my frustration. It is a shame we didn't know before we bought about the invulnerability of Spanish defaulters and their ability to thumb their noses at honest people. I hate the fact that we successfully chase UK based owners who default by sending in debt collectors at no cost or risk to the community and we do this long before the debt reaches the level of the Spanish spongers. I believe that amounts to discrimination. We are accountable to our owners who want to know what we are doing to chase the debts. If we tell them the unvarnished truth we run the risk of effectively inviting any Spain-based owners to default.

At this stage I probably know the answer - Has anyone tried a Spanish debt collection agency?

ashtondav
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Re: Community Debtors

Postby ashtondav » Thu Apr 04, 2013 2:57 pm

Google "El Cobrador del Frac" if you're prepared to at least recover 70% of your debt.

They are legal and effective if you have names and addresses.

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Re: Community Debtors

Postby reallyspain » Thu Apr 04, 2013 4:09 pm

Cobrador del Frac looks great, but.........................

Has anyone tried them & if so with what result?

LITTLEMO
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Re: Community Debtors

Postby LITTLEMO » Wed Apr 10, 2013 1:01 pm

The following was recently approved at our community AGM.

The agreement to modify the Community Statutes regarding restricting debtors (and their guests, family members and renters) use of non-essential common facilities in line with Public Bulletin 20-11-2012 was approved. So, the new rule to restrict non-essential common services (pools, Wi-Fi & paddle court) to any owners in debt after the April payment will be enforced.


Kettlewells Debt Collecting Agency in the UK has been successful in clearing a number of debtors, with a number of cases still in progress.

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fyfin
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Re: Community Debtors

Postby fyfin » Wed Apr 10, 2013 2:05 pm

Yet everything you read elsewhere says you cannot do this. I assume your Administrator has confirmed that this does not conflict with the The law of horizontal property.
I always understood it was against the law to refuse non payers access to the common parts.
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Parilla
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Re: Community Debtors

Postby Parilla » Wed Apr 10, 2013 4:07 pm

Littlemo, can you please post more details of the "Public Bulletin 20-11-2012" you refer to. I am sure many if not all communities would like to apply such measures, but neither our Administrator nor Lawyer are aware of any changes in the LPH allowing this action.

Your help would be appreciated by many.

Parilla

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fyfin
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Re: Community Debtors

Postby fyfin » Wed Apr 10, 2013 6:33 pm

I suspect Littlemo is referring to a notice her community posted themselves on maybe a community notice board but it would indeed placate a lot of our owners who pay regularly and then find the pool full of families and guests of those who haven't paid.
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fyfin
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Re: Community Debtors

Postby fyfin » Wed Apr 10, 2013 6:43 pm

The other point is that I have heard different figures bandied about regarding how much it costs to commence legal action against these debtors, I've heard €1,500, €500 and on here €900 so does anyone actually know how much it does cost?
I spoke to a company today who carry out administration and was very surprised to be told the cost of starting legal proceeding was €120 and of course you get it back if/when the apartment is sold or the debtors assets (if he has any) are seized.

I was surprised because I was told by our previous President that our current administrators are saving us thousands by carrying out the legal stuff free of charge, now I'm not so sure.
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LITTLEMO
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Re: Community Debtors

Postby LITTLEMO » Thu Apr 11, 2013 1:42 pm

I was not at the AGM but this is what was contained in the minutes regarding the debtors

• The agreement to modify the Community Statutes regarding restricting debtors (and their guests, family members and renters) use of non-essential common facilities in line with Public Bulletin 20-11-2012 was approved (please read Agenda Point 9). So, the new rule to restrict non-essential common services (pools, Wi-Fi & paddle court) to any owners in debt after the April payment will be enforced

I am also aware of another complex beside us in Duquesa who voted for the same in line with this public bulletin. This is currently being enforced and have already restricted access to the swimming pool/library and wifi. Perhaps if anyone requires any more info they could get in contact with the administrator

Judith A. Campos
Administradora de Fincas - Community Administrator
Colegiada ICAF Malaga/Board Member Nº 2159

A plus Law S.L.P.
Administration & Legal Services
Tel: +34 952 89 16 18 / Fax: +34 952 93 63 62
www.apluslaw.es
Duquesa Office: Urb. Monte Duquesa
"The courtyard" Local 5 (29692) Manilva, MA
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Lu/Mon - Vi/Fri 9:00 - 14:00

ashtondav
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Re: Community Debtors

Postby ashtondav » Thu Apr 11, 2013 5:55 pm

In our case that would not work as we only have the pool and the debtors' tenants don't use it.

We are applying for an embargo on the owners' Spanish bank accounts - but have been told there's nothing in them.

The ONLY way we will ever recover the debt is if the propeerty is auctioned. Sadly, I can find no one who will give me any answer on the timing or details of this.

Since I have posted the situation on many boards and no one has ever given me the answer, i assume it (auction for community debt) never happens

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fyfin
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Re: Community Debtors

Postby fyfin » Thu Apr 11, 2013 8:14 pm

Well I hope I might be able to provide an answer as I understand the Attorney has been in touch with our Administrator regarding the Spanish guy who never paid (7 years +) and it looks like if they can find no other assets the apartment will be auctioned off.

I wait with bated breath and if it actually happens I'll be the first to let everyone know.

I would still like to know if anyone knows how much it costs to commence proceedings against these debtors. Maybe I'll start a new thread.
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Re: Community Debtors

Postby ashtondav » Sat Apr 13, 2013 3:40 pm

Fyfin

I didn't answer because our administrator (also a legal firm) is handling and hasn't charged. I have assumed they build in an allowance for legal fees in the annual charge, which for our 17 apartment block is €2,000 per year. It's the only problem we've had (adminstrator wise) in 10 years.


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