Buying in a Community of Owners – outstanding debts!

Raymundo Larraín Nesbitt, October, 1. 2017

By Raymundo Larraín Nesbitt
Lawyer – Abogado
21^st of September 2017

Did you know that on buying in what is known as a community of owners (residential development) you could be held liable for the previous owner’s debts?

In Spain, a property is held liable for the debts of the current year plus the previous three years. So, whomever becomes the new owner 'inherits' the debt. Some community of owners, particularly those dotting the costas with lush tropical gardens and 24 hours concierge service, have steep maintenance fees; the arrears over time can be quite substantial.

For example, Mr Jones buys into a development in October 2017 without a lawyer and, unbeknownst to him, the seller is in arrears since 2013. After completion, Mr Jones moves into his new property and as a ‘welcome pack’ receives a nasty letter from the community Administrator threatening legal action as his property owes the community €21,000 (years 2014 through to 2017). The seller is a non-resident and already fled Spain (with the sales proceeds)!

If Mr Jones refuses to pay the debt, the community will approve in a General Assembly to instigate legal proceedings against him, placing a charge against his new property for the debt plus all the associated procedural expenses (easily a further €10,000 in legal fees). If he still does not pay, the community may auction off his property to recover the debt. Properties in Spain can be publicly auctioned off for small debts of only a couple thousand euros.

This is but one of many checks that a conveyancing lawyer will do on your behalf. If you are buying property in Spain, do it safely, hire an experienced law firm such as ours to safeguard your interests.

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Buying in Spain related articles

Buying Distressed Property in Spain – 8th August 2011
Challenging Assembly Resolutions (AGMs and EGMs) – 10th October 2011
Community of Owners, or Comunidad de Propietarios – 8th July 2012
Buying Resale Property in Spain – 21st February 2013
Buying Off-Plan Property in Spain – 8th of June 2013
Buying and Owning Spanish Property through Companies: Pros and Cons – 7th March 2014
How to Buy Commercial Property in Spain – 4th July 2014
How to Buy Rural Property in Spain – 8th August 2014
How to Buy Property in Spain Safely – 10th October 2014
House Hunting in Spain – Interview with The New York Times. June 2015
Taxes on Buying Spanish Property – 8th July 2015
Non-Resident Taxes in Spain – 8th December 2015
Buying Property in Spain – 10 Reasons to Hire a Lawyer – 8th November 2016
Buying Property in Spain from a Private Seller (Resale Property) – 21st of February 2017
Buying Property in Spain from a Developer (Off-Plan Property) – 8^th March 2017
How to inspect an off-plan property overseas – Interview with The Sunday Times. July 2017
Buying in a Community of Owners – outstanding debts! – 21^st September 2017

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