Elements to consider for the constitution of a community of owners in Spain
All you need to know regarding the constitution of a community of owners in Spain
Before entering to assess the requirements that we must meet to establish a community of owners in Spain, please let us inform our readers about what it is understood by a community of owners. In this way, we turn to our common law, the Spanish Civil Code, where article 392 literally tells us the following:
There is joint ownership where ownership of a thing or right belongs pro indiviso to several persons.
In the absence of a contract or of specific regulations, joint ownership shall be governed by the provisions of this Title.
Therefore, from here we can understand that there is joint ownership or community of owners in Spain when there are at least two owners of a thing or right that cannot be physically divided.
Also, the Spanish Civil Code, in its article 396, states a specific type of community of owners and which is the subject of comments on this blog: horizontal property.
Thus, we may understand by “horizontal property”, that which results from the different flats or premises of a building or parts thereof capable of independent use, as a result of having their own exit to communal elements or to the public road which shall carry an inherent co-ownership right over the communal elements of the building.
The extensive article 396 of the Spanish Civil Code refers us to the specific legislation for the regulation of this type of joint ownership. And this specific matter is regulated in our legal system by Horizontal Property Act 49/1960 of July 21, along with all its modifications and subsequent updates.
Having said the above, we understand that there is a community of owners in Spain, from the same moment in which two or more persons are owners of a building divided into flats or premises or independent parts thereof, regardless of whether there is a legal title by which the Spanish community of owners has been formally constituted. Therefore, from the moment in which there are several co-owners, rights and obligations arise between them, although the community of owners has not been legally constituted yet.
Once the existence of several owners is completed, we can proceed with the formalization of the community of owners. For this we will need the following:
- Constitutive title of the horizontal property. This is usually specified in the Spanish New Building and Horizontal Division Title Deed. This constitutive title must have clearly established the respective quotas by which the horizontal property is divided between each of the flats, premises or parts that can be used independently. Generally the quotas are determined by the square meters of surface that each element counts. All quotas must add 100% of the horizontal property.
The constitutive title must be registered at the Land Registry where the property is located.
- Community Statutes in Spain. Although it is not mandatory, the constitutive title itself may contain rules where the rights and obligations of the owners of the property are stated, which may never go against the horizontal property act. These rules are specified in what we commonly know as “Community Statutes.” The Statutes, being part of the constitutive title, will also be registered in the Property Registry.
3.First call of the Board of Constitution of the Community of Owners in Spain. Once we have the constitutive title, we will proceed to convene the owners to hold the first meeting, which will be precisely that of the constitution of the Spanish community. From the results of this first meeting, it should be specified:
– Appointment of president of the community of owners in Spain and various positions of the board.
– Appointment, if approved, of an administrator (usually also includes the functions of secretary).
– Approval of an initial budget and a reserve fund.
– Approval of opening a bank account
– Legalization of the Book of Minutes
– Obtaining a NIF from the community
– Where appropriate, drafting of an “Internal Regime Regulation”, which we should not confuse with the Statutes of the community and that in future blogs we will discuss.
In a succinct manner, we have made a small review of the essential requirements for the formal constitution of a community of owners in Spain.