Which concepts must be paid in an owners' community?

- Are you an owner within a legally constituted Community of Owners?

- Do you want to know your financial obligations linked with the fact that be part of the Owners' Community (hereinafter OC)?

1. Introduction: In a OC there are two types of expenses

a) Ordinary expenses (there are two synonyms for "ordinary": "common" or "general").

b) Extraordinary expenses

a) Characteristics of the regular actions and type of associated contribution:

 - They come from the OC budget 

- They support the satisfactory functioning of the OC on a day-to-day basis. 

- It is a contribution of a recurring nature

It should be noted that these actions correspond to: repair and maintenance actions.

b) Type of contribution to extraordinary actions: 

 - Contribution of a non-periodic nature 

- Exceeding the regular budget 

It must be retained that these actions correspond to: works that must be voted and approved by the Owners' Meeting.

2. The serious consequences of not approving or not spending the maintenance budget

 In case of not have passed a budget to maintain the building:

- 2.1.1. In the first months live in OC building -without a mantenaince budget- would only be unsightly: I saw cracked paint ( my guests have observed it!) 

- 2.1.2. Live in it after several months would become uncomfortable: I miss a bench (it would be very nice to have it)

- 2.1.3. Living there nine months -without a maintenance budget-  of time would become annoying: the thermal or acoustic insulation has worn out or leaks have appeared (I get cold, I can hear the neighbors, and the other day it rained, there were no buckets!)

- 2.1.4 Living there after another period of time would become unhealthy: due to lack of cleanliness there are pests (no one deserves to live like that!)

- 2.1.5 Live in it after a year would become unsafe: I am thinking of situations such as, for example, the lack of fire extinguishers, or emergency lights on the elevator turned off.

In this fifth level, the OC is skipping regulations and would be forced to make the appropriate actions under threat of sanction.

 Let's look at the legal provisions that have not been complied with:

- The Fire Protection and Installations Regulation (RIPCI).

 - Orders EMO 254/2013 of the Department of Enterprise and Occupation of the Generalitat de Catalunya which, in turn, develops RD 88/2013. These standards determine how to maintain the elevator.

As a result, the mandatory Technical Inspection of Buildings (ITE) would not be passed.

 - 2.1.6. If it still there's already no maintainance budget, be in the building it would become dangerous: it is the final point of degradation. Constructive pathologies appear that can cause the building to collapse, threatening the life of everyone living in it.

Contributing to the budget of the CP is like paying taxes: the reality is that there are actions, very beneficial for you, that neither as an owner nor as a citizen, you be not able  to pay alone -and even less if several of them are simultaneous-.

3. Ordinary expenses to the CP 

3.1. The ordinary fee and the budget:

Once we have seen how vital it is to have an ordinary budget passed, we inform you that must be approved by law.  We explain from where it is born and how to approve it in the Meeting of Proprietors and, with the more than advisable presence of a Real Estate Agent who at all times will guide the OC assembly. 

The ordinary quota is an amount that each owner pays each month. From the sum of all the ordinary quotas (which are individual) the budget (which is collective) of the Community of Owners is born. 

The quota to satisfy is calculated thanks to the "participation coeficient" of each owner in the if of the OC. We define it as the percentage of co-ownership that any owner has. This is applied to the property, as well as to the total of the common facilities, and is normally expressed in percentages. The main basis for the calculation is usually based on the constructed meters of each entity with respect to the total built-up area.

A warning: in too many occasions the ordinary budget is too tight, which can give a headache for lack of treasury to the administrator as well as to the president when not having sufficient liquidity to take care of the basic expenses of the building.

3.2. The owners' community reserve fund

Equivalent to at least 5% of the budgeted common expenses in Catalonia and 10% in the rest of Spain as @baezcomunidades pointed out, it allows to have a surplus of money. This fund must be kept in a special bank account. So a separate one from the ordinary expenses account. 

4. Eight extraordinary expenses in an OC.

To make this point with guarantees we have counted on the advice of Editorial Sepin.

Why is there no closed list of disbursements for improvement works?

Firstly, because improving a building or the adjoining communal area involves actions required by the owners. Secondly, there are payments associated with actions required to comply with distinct administrative levels in Spain: local, regional and state regulations that are often changed

This is the point where the concept of "derrama" comes into play. 

A derrama is an unforeseen amount, therefore, outside the ordinary quota, to satisfy with urgent character. Here Carles Subirà, a real Estate Agent in Finques de Feliu adds to the explanation to specify: "many times the derrama has to be satisfied with urgent character and others in a programmed way but with independence of the habitual expenses of maintenance".

Mr. Subirà adds: "This extra payment, will have to be approved by a resolution of the General Owners Meeting duly assembled in ordinary or extraordinary session and approved by the corresponding legal quorum, normally by agreement of the simple majority of owners and participation quotas".

4.1. The cleaning of the OC

Cleanliness is healthiness.

4.2. Actions required to comply with the requirements of the Technical Inspection of Buildings.

It is necessary to pass the ITE (in the Spanish acronym) and this forces to promote works. The actions to be taken are unpredictable because not all buildings are in the same state.

However, Mr. Subirà warns: "although it is convenient to make pedagogy on the ITE we would do wrong to forget that any other unforeseen repair of conservation and maintenance of the building should not be forgotten".

4.3. Financing accessibility works

 The legislator considers that citizens' with reduced mobility and those over 70 years of age must be the object of special protection. At Feliu, we urge you to take advantage of the aid plan for rehabilitation under the European Funds: they are an opportunity to meet the cost of this type of work with external help.

Some actions to facilitate accessibility to the CP are:

- lnstalling the elevator

- Installing ramps 

- Leveling a raised threshold

- Widening the entrance doors in the PC building.

4.4. Installing security cameras in the community parking lot

In this case, it is especially important to have an agreement approved by the Board. The Spanish Data Protection Agency (AEPD by the Spanish acronym) warns: "recording images of identified or identifiable persons for video surveillance purposes by means of cameras is considered a processing of personal data". The AEPD determines how to regularize this "data processing": "(...) to register a file in the General Register of Data Protection indicating that its purpose is video surveillance".

4.5. The installation of fire extinguishers in homeowners' associations

The RIPCI regulation obliges owners of CP buildings to install portable fire extinguishers. According to the regulations, all buildings will have to pass the examination of the inspection body (OCA).

4.6. Installation of defibrillators

Recently, one of the protagonists of a sport event collapsed. Having a defibrillator at the venue was the difference between life and death for the affected person. At Finques Feliu we have them in our offices and we will promote their installation in the OC we manage. 

4.7. Possible actions to set up the pool to comply with the anti-covid sanitary measures

On May 24 Catalonia approved the new regulations for swimming pools before the COVID-19 the CPs will have to face the possible actions that may arise.

4.8. Severance pay for dismissal of a worker 

Sometimes, unfortunately, it will be necessary to lay off workers of the CP. In this situation, a severance payment may have to be paid. 

We hope that we have solved many of your doubts as an owner in relation to the financial obligations to the PC. On our website there is a contact form where you can write to us and receive all kinds of advice.