Who pays the costs of a trial in the community of owners?

09 | 04 | 24
| Feliu Brand

To take a conflict to court must always be the last option. Nevertheless, you have to know 'who pays the costs of a trial in the community of owners?'

 

Introduction: As president you have to lead meetings. To hire a Real Estate agent will be a turning point


Selecting and hiring a property manager will improve the functioning Owners Community (from now on OC) in three key aspects:

  • It supposes to have an expert in legislation and jurisprudence 
  • It professionalizes the management of the Meetings
  • Advises when solving disputes 
     

Part One: The three steps to defuse a conflict without leaving the PC

a) Active hearing: President and administrator must have a deep understanding of the antagonistic positions of the parties.

In order to overcome this first conflict, you must be able to answer two questions:                               

  • Is there a real basis for the disagreement?
  • What are the goals confronting them?  

If the second question is answered in the affirmative, click here.

b) Move the confrontation from the emotion towards reason: In this second step we want to move from personal disqualification to a negotiable solution.

How to do it? President and administrator have to push the parties to:

  • To 'agree on disagree': To begin with, they must specify what is the objective problem to overcome
  • Slice the dispute in small eliminable problems: It is a matter of increasing mutual trust as much as possible while the obstacles are overcomed
  • Facing the global solution to the confrontation: In the previous point a certain confidence has been built in what the 'opposite' party will do. From this basis, the figure of the property administrator becomes valuable, because it is plausible that in the past, he has found a solution to similar confrontations. 

  • Professional mediation represents the third and last step.

    c) This procedure has a success rate of about 80%: The Catalan Civil Code enshrines it. 

    Second Part: Article 24 of the Spanish Constitution establishes "effective judicial protection".
    When the positions are very fierce, it will be necessary to resort to the courts.

    Article 24 of the Spanish Constitution prepares this path. It writes as follows:

    "1. All persons have the right to obtain the effective protection of the courts and tribunals (...) without the possibility of defenselessness.

    2. (...) In a trial he has the right to have access to:

    - Normal Judge(...)

    - Defense 

    - Legal assistance

    - Clear information about the accusation (...)

    - The execution, in due time and form, of a public proceeding with all the guarantees.

    - To use the means of evidence pertinent to their defense,

    - Not to testify against themselves

    - To not confess guilt 

    - To the presumption of innocence

 

 a) What are the procedural costs?

 Article 241 of the Civil Judgment Law determines which concepts are referred to as procedural costs:

"1st Defense fees and technical representation (...)

2nd Insertion of notices or edicts (...) 

3rd Necessary expenses for the presentation of appeals (...)

4th Expert's fees and other payments (...) 

5th Copies, certifications, notes, testimonies and similar documents (...) except those claimed by the court to public registries and protocols (...)

6th The court fees (...) for the development of the process.

7th The tax for the exercise of the jurisdictional power (...)

 

 b) Which taxes are not procedural costs?
 

  • The amount of the tax paid in the processes of execution of mortgages constituted for the acquisition of habitual residence
  • Other foreclosure proceedings derived from these loans or mortgage credits when they are directed against the foreclosed party or against the guarantors

The holders of credits derived from procedural actions may claim them from the party or parties that have to pay them without waiting for the process to be completed (...).

 c) Who has to pay the procedural costs?

According to article 241 of the Civil Judgment Law, in principle, the procedural costs must be borne by all parties. However, the judge may condemn the party against which he has issued a final judgment to pay the costs in their entirety.

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d) Can legal assistance be free of charge? 


Yes, it can be. However, only in the cases defined by the Law on Free Legal Aid. This regulation develops article 119 of the Spanish Constitution.

Part Three: The specific case of the legal defense of the interests of the OC

The OC does not have its own legal personality, the entities who own property in the OC have their legal personality. In the case in question, the first thing to discern is:

What is the nature of the expense for which the OC is litigating?

- In order to know when we are dealing with a general expense, the key is that it is litigated for a general interest of the OC. Then it is considered that everyone has to bear their share of the costs of the lawsuit. If they do not do so, the person (or persons) who do not pay, will be a 'free rider'

The second question is against whom does the OC litigate? 

a) A natural or legal person external to the OC
To litigate against a third party, the PC must vote and approve the lawsuit with a simple majority. Then all the co-owners of the PC finance the lawyer. All the propietors act against a third part.

b) An individual or legal entity that is the owner of the same OC.

In this case the legal doctrine is common sense: no one has to contribute to support the claim against himself/herself. For the person facing the PC, these expenses will not be considered as 'general'.

c) What happens when the third defendant is a legal entity that is also part of the OC?

Let us imagine the following situation:

  • An entrepreneur promoter is a natural person who heads a legal person -the promoter company-
  • This developer company has carried out works in the OC
  • The promoter, as a natural person, resides in the same CP that is suing him -arrel, for example, defects in the construction-

Therefore, the jurisprudence understands that the defendant has to bear the cost.

The reason for the difference in the jurisprudential criteria between sections "b" and "c" is explained below:

  • In the epígraph c) at the time of filing the lawsuit who is denounced is: natural person rather than legal entity.
  • On the other hand, in epigraph b), it was a person who only interacted with the OC as owner.
  • In section c), in addition to being the owner, it is also the owner of the developer sued by the OC. 

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