What happens if a community is bankrupt?

[Suej]

We noticed our President sweeping the communal pathways on our complex and asked her where the cleaners/gardeners were she said the Community has no money! I think we are clearing the Administrators fees, utilities but little else. The place is looking a real mess with weeds, unwatered gardens and necessary repairs that are not being dealt with. The Community has 2 large debtors who when they rented out their houses the Administrator said we could get the outstanding community fees by embargo but nothing has happened! If I were a potential house purchaser looking on this complex I would be completely put off by the scruffiness of the place, I am beginning to feel quite ashamed of it tbh. The Community is only 52 houses in total. What can we do?

[doreen]

We noticed our President sweeping the communal pathways on our complex and asked her where the cleaners/gardeners were she said the Community has no money! I think we are clearing the Administrators fees, utilities but little else. The place is looking a real mess with weeds, unwatered gardens and necessary repairs that are not being dealt with. The Community has 2 large debtors who when they rented out their houses the Administrator said we could get the outstanding community fees by embargo but nothing has happened! If I were a potential house purchaser looking on this complex I would be completely put off by the scruffiness of the place, I am beginning to feel quite ashamed of it tbh. The Community is only 52 houses in total. What can we do?

Same happened to complex where I was President and we doubled the fees for one year to get by ... we were a very small community, much smaller than 52 houses - surely just two debtors cannot have bankrupted your complex ???

EDIT - seeing mike's reply below - yes, we had to call an EGM to raise the fees (finally some money due came through 18 months later, and the developer who is the biggest debtor is no where to be found :()

[mike in chayofa]

Having no cash and being bankrupt are two seperate issues.

It is unlikely that the community is bankrupt, just that your administrators are unable/have failed to get fees in on time.

To take debtors to court can be a long process and if they don't pay up, to get an embargo on a property takes even longer.

IIf the debtors are Spanish, they will know how to drag out the proceedings. If they are British a bit of manipulation may produce a faster result.

I would suggest that an EGM is called so that all owners are aware of the exact situation.

[mike in chayofa]

Same happened to complex where I was President and we doubled the fees for one year to get by

This isn't always possible because it affects the people that do pay their fees and dosn't (in real terms) affect the debtors

[doreen]

This isn't always possible because it affects the people that do pay their fees and dosn't (in real terms) affect the debtors

It was the only way to pay debts and get services going again ... but I am talking of only 4-5 people dipping into their pockets (as we had to do to finish the work for Boletins that the Developer didn't do and my (then) lawyer didn't check about :()

[mike in chayofa]

Is Marichall one of your debtors? If so, are they still in business?

[Suej]

Thanks D and M! No Marichal are not debtors but they have failed to do necessary repair works (snagging) and have managed to evade us for a few years now! The two main debtors (both Spanish) owe around 8000€ they have never paid community since purchasing their properties off plan! At the last AGM (December) it was agreed by proxy votes which the President held to increase the fees...in reality most owners are now refusing to pay the extra and some are with holding all fees completely as they feel they are subsidising the big debtors. Sorry I should say that the Community is stoney broke! Mike I think we have the same Administrators as you but quite honestly the guy (who is supposed to be a lawyer) talks a lot but does zilch! There is a group of owners who want to see some action but we don't know where to start before it spirals out of control.

PS.
I personally feel that the Administrators for some reason are using delaying tactics! The AGM was held on 16th December to date we haven't even received the minutes which are apparently still being translated! ???

[doreen]

Thanks D and M! No Marichal are not debtors but they have failed to do necessary repair works (snagging) and have managed to evade us for a few years now! The two main debtors (both Spanish) owe around 8000€ they have never paid community since purchasing their properties off plan! At the last AGM (December) it was agreed by proxy votes which the President held to increase the fees...in reality most owners are now refusing to pay the extra and some are with holding all fees completely as they feel they are subsidising the big debtors. Sorry I should say that the Community is stoney broke! Mike I think we have the same Administrators as you but quite honestly the guy (who is supposed to be a lawyer) talks a lot but does zilch! There is a group of owners who want to see some action but we don't know where to start before it spirals out of control.

PS.
I personally feel that the Administrators for some reason are using delaying tactics! The AGM was held on 16th December to date we haven't even received the minutes which are apparently still being translated! ???

We had one owner refuse to pay saying WHY, and you can see their point, but then again, you have to get on with it and keep the place running.

Ask for the Minutes in Spanish and run it through Google - you'll get the gist :)

[welshman]

Im out to attend AGM for a friend and few days holiday on the 14th Feb I,m am a management Accontant so looking forward to attend meeting. He has shown me a letter regarding a privately owned they call it a local on his complex, that has not paid any community fee since complex was formed 2003 running up large debit. The owner could not pay so the local was put up for auction last Oct without any buyers being found. The community has been informed that as the local had no purchasers caming forward that the local becomes the property of the complex, however they found that there is 36000 euro property/ tax debt that was run up by the original owner. This has know been transferred to the community to pay is this legal!!!!!

[Suej]

We had one owner refuse to pay saying WHY, and you can see their point, but then again, you have to get on with it and keep the place running.

Ask for the Minutes in Spanish and run it through Google - you'll get the gist :)

I and other owners have asked for the minutes in any form...Nada!

[mike in chayofa]

..... The two main debtors (both Spanish) owe around 8000€ they have never paid community since purchasing their properties off plan! At the last AGM (December) it was agreed by proxy votes which the President held to increase the fees...in reality most owners are now refusing to pay the extra and some are with holding all fees completely as they feel they are subsidising the big debtors. Sorry I should say that the Community is stoney broke! Mike I think we have the same Administrators as you but quite honestly the guy (who is supposed to be a lawyer) talks a lot but does zilch! There is a group of owners who want to see some action but we don't know where to start before it spirals out of control.

PS.
I personally feel that the Administrators for some reason are using delaying tactics! The AGM was held on 16th December to date we haven't even received the minutes which are apparently still being translated! ???

OK ... it seems that there are problems here that are not being addressed by anyone.

The president needs to control this situation with the help of the administrators to sort these problems urgently.

If you have the same administrator as us, Geraldo has always been excellent. We had several recoveries last year by taking court action and others that paid because they realised that we meant 'business'. For the coming year we are taking 7 owners to court.

At the last AGM you should have been given the accounts for the previous year and a proposed budget for the coming year. These will have to have been approved at that AGM. As such, some owners may not like the increase, but it has been voted in and they have no legal grounds to refuse to pay the increase or to withold comminity fees in their entirity.

Do you have a community notice board? I suspect that you have. A detailed list of propert numbers, owners names and amount of arrears owing posted there may shame some people into paying at least part of their overdue fees.

To have dismissed a community employee will presumably have cost the community money - where did it come from?

Why not ask the president and commitee to hold an informal meeting of owners so that they can be made fully aware of the situation and that it will affect the property values on the development in the position isn't rectified.

[Suej]

Trying to motivate most of the owners is impossible here! It's easy to say owners shouldn't be withholding Community fees but if they are not paying why isn't the Administrator chasing them??? He put forward lots of positive ideas at the meeting but it's like they and us are totally forgotten afterwards! I have sent three emails (one a week) asking about the minutes and the urgent issues discussed only to be told each time they are being translated. How can this take 7 weeks? Geraldo was somehow taken on as administrator by Marichal! (We call it a hostile take over) this is another reason we are suspicious. The President is useless but no one else wants to do the job.

[bonitatime]

Sometimes it is all easier said than done. One of the communities I am involved with just makes ends meet as 5 out of 16 of us pay. We have taken on if the ownes to court twice and list both times something which is almost impossible but his wife is a judge so what can you do.
Most of the others have either already been embargoed by the banks or by the town hall. This puts the community down the list but we hope the embargoes come to court and then get sold as this might give us new owners who pay.

[BoPeep]

These communities just dont seem to work. We have about 5% of owners that wont pay but one owns 10% of the apartments so it adds up. Everyone else pays but are getting increasingly miffed at having to pay more because of the non payers. We took 3 owners to Court, Spanish one paid at Court, one English one lost in Court but still hasnt paid (a year ago) and the other English one has disappeared!

[s1monsg]

I might be wrong and I hope to be corrected by Mike or Doreen, if I am, but if an embargo is put on a property the only way the outstanding bill will be paid is if the property gets sold. If this is correct, firstly it could take ages for the existing owners to decide to sell actually get a buyer and secondly if what the OP is saying about the complex looking shabby, then even if the owners are trying to sell, prospective buyers may be put off by the state of it. So, it might be in everyones interest to get the place ship shape anyway.

I know it's easy for me to say, as I have nothing to do with your community, but maybe there are some more owners who are as concerned as you are and perhaps you can all get together with the President and have a clear up campaign to try and make the place look better...I suspect that's a "pigs might fly" statement but possibly worth a try?

[mike in chayofa]

..... if an embargo is put on a property the only way the outstanding bill will be paid is if the property gets sold. If this is correct, firstly it could take ages for the existing owners to decide to sell actually get a buyer and secondly if what the OP is saying about the complex looking shabby, then even if the owners are trying to sell, prospective buyers may be put off by the state of it. So, it might be in everyones interest to get the place ship shape anyway.

The Spanish legal system works very slowly BUT the courts take the non payment of community fees very seriously once they have decided in favour of the community.

Non payment will result in the property being auctioned off by instructions of the court. Unfortunately, bank mortgages and taxes etc will have to
be paid before the community gets it's turn in the 'pecking order', so there may be a problem if a mortgage is greater than the relisable value of the property.

[mike in chayofa]

...... why isn't the Administrator chasing them???

That depends.

The administrator can only act on the instructions of the president to take non payers to court. This should have been voted on and agreed at your last AGM ... this is where the minutes of the AGM would be valuable.

You would need to take legal advice on the following from the administrator .....

Your main garage entrance doors are electronically operated by a 'mando' ... yes?

If so, why not have a 'breakdown' and change the frequency on the control unit and only supply the new code to owners that have paid their fees. It seems reasonable to me that non payers should not be allowed access to the community driveway to their garages ;)

[Suej]

That depends.

The administrator can only act on the instructions of the president to take non payers to court. This should have been voted on and agreed at your last AGM ... this is where the minutes of the AGM would be valuable.

You would need to take legal advice on the following from the administrator .....

Your main garage entrance doors are electronically operated by a 'mando' ... yes?

If so, why not have a 'breakdown' and change the frequency on the control unit and only supply the new code to owners that have paid their fees. It seems reasonable to me that non payers should not be allowed access to the community driveway to their garages ;)

That's sounds like all out war! but I like it! we seem to have such a variety of characters here and the garage doors are often vandalised by owners/renters who do not have mandos so then destroy the mechanism of the doors, these sort of repairs are expensive and are partly responsible for draining our funds. I will put this idea forward to the administrators though. I have today sent them a long email listing the issues that were discussed and the agreed actions that would be taken. I am awaiting a reply.

[Margaretta]

A single pool key was given to each apartment on our complex but I believe the non-payers did not receive one so have no access to our pool.

[Suej]

A single pool key was given to each apartment on our complex but I believe the non-payers did not receive one so have no access to our pool.

Yes Margaretta I do know of another complex that did this...We don't have a community pool though!

[Peterrayner]

A single pool key was given to each apartment on our complex but I believe the non-payers did not receive one so have no access to our pool.

Sadly under Horizontal law these actions are totally illegal. Owners regardless of their debts cannot be deprived of use or access to communal areas or facilities and can denounce the community (President) it such actions are taken.

[TIS]

Hi! I´m professional communities´administrator, and am used to these kind of situations. There is always a solution for this, and it´s impossible that a community is really in bankrupt situation. I can help you with this, if you want you can PMl me and we can arrange a meeting to talk about this: . Kind regards.

We are all aware that there is a solution to non-payment of community fees. The issue is that it takes far too long to firstly get judgement against the debtors let alone get the payment enforced, if at all possible. As some have already said people do run up large debts and then disappear, which not only doesn't help the community but leaves the law abiding owners paying more each and every month to make up the difference. "Innocent until proven guilty" is taken to the extreme here, as the debtors cannot legally be deprived of any facilities. What I find particulary annoying is that even in the cases where the debtors are taken to court and eventually made to pay, the owners who had to pay extra to keep the community running never get their overpayments back!

[Balcony]

On our complex there are one or two debtors and it seems the legal system is enough to put the complex off doing too much! OK they do talk with the debtors, but it is worrying - and you see evidence of it on a lot of complex's - when there seems to be a wholesale approach to non-payment!

Some people will, of course, hit hard times and cannot pay, but I hear stories of people who just will not pay. I have no sympathy whatsoever for the 'will nots'. Of course you can't cut of peoples' water, but it can be turned down to a trickle.

[jack oakley]

On our complex there are one or two debtors and it seems the legal system is enough to put the complex off doing too much! OK they do talk with the debtors, but it is worrying - and you see evidence of it on a lot of complex's - when there seems to be a wholesale approach to non-payment!

Some people will, of course, hit hard times and cannot pay, but I hear stories of people who just will not pay. I have no sympathy whatsoever for the 'will nots'. Of course you can't cut of peoples' water, but it can be turned down to a trickle.

Postings in this thread have strong similarities to the last several posts in the "El Barranco Your Place Abroad Scam Thread".
Anyone who knows about this thread will be aware that the developers of El Barranco on the Amarilla Golf (Christopher John Davies and Peter Lowe from Stockport) also own The Bridge Commercial Centre in Pebble Beach Village, they owe 65,000,00 euros to the Pebble Beach Community from non payment of community fee's relating to "The Bridge" much more can be found in the El Barranco thread. The crux of the matter is that deliberate debtors in communities are no better than common theives, they know that evading, by ducking and diving and playing the canarian legal system, they can literaly get away without paying a cent, they also know that if they don't pay the honest owners have to make up that shortfall therefore subsidising the debtors blatant evadance and they laugh all the way round the golf course. If someone pinched your wallet or stuck their sweaty hand in your pocket and nicked 50 quid you kick their ****, this is excactly what these scumbags are doing. I read many posts about how it is a waste of time trying to bring these leeches to book and the time and money it takes isn't worth it! whatever it takes it will be worth it in the end, if nothing is done everyone on the community will take the view that if the persistant deliberate debtors are allowed the get away with then why can't we?. Yes the legal system is flawed but it CAN work if it is applied swiftly and by the RIGHT lawyer, (there are many lawyers who use communities as a money tree and fumble about running up illigitimate bills). There are lawyers however who are honest and compitant, seek one who has a track record in bringing these scumbags to book. If you don't and if you let others tell you that it isn't worth it more and more communities WILL go bankrupt. What do you think would happen if you took the manchester to euston train every morning and your seat cost you "umpty quid", if 50 of you pay and 100 don't knowing that it will be too messy and expensive to prosicute them then you would probobly say "if they are getting away with it, i might as well", so no-one pays. Very soon there will be no train at all because they can't run on fresh air. Action has to be taken swiftly these scumbags are your neighbours and you probobly meet them spashing round in the swimming pool you pay for and they don't, whatever it costs make an example of the worst one's, it CAN be done their properties CAN be seized and auctioned, if it is morgaged and the bank foreclose they have priority but THEY are then are liable to pay the the community fee arrears, however the court will only enforce TWO years backpayment, the court take the view that if you allow more than two years debt to accrue then it's your communities fault for allowing it so swift action must be applied, you and your honest neighbours must insist that your president and administration enforce zero tolerence to the DELIBERATE debtors. If you are an owner in an apathetic community you will see your quality of life diminish and the price of your property will decrease, folding your arms and huffing and puffing will get you nowhere, if it means you have to shut down your swimming pool for a year to fund the legal fee's then do it, if you don't you may lose your pool altogether. Jack.O

[Suej]

Thanks for all the replies! It is frustrating to say the least when only a handful of owners show any concern! I quite agree with JackO these debtors know how to play the system and it really is the pits! Our community areas are not getting attended to the cleaners seem to have disappeared completely and now our Entry phone system is not working at all so if (in my case) I live 23 houses away from the entry gate and don't have a clue when anyone is calling unless they phone me! I have honestly thought of selling up and buying a non community property! but that's just my knee jerk reaction to what's going on...I don't want to move but this community is getting so run down! Our AGM was 16th December 2011 to date we have still not received the minutes! I have emailed the Administrators several times but don't get any replies! ARGHHHHHHHHHHHH!!!:(

Hi Balcony, our debtors are renting their houses and still the Administrator have not managed to get any community fees!

[jogger321]

You might want to contact the English President at the Marde Verde complex as I understand he has worked wonders there. Basically it was becoming a run down dump of a complex with loads of owners owing commiunity fees and nothing being spent on the complex. I understand this guy has turned the complex down and ruthlessly pursued non payers through the courts....

[mike in chayofa]

......The AGM was held on 16th December to date we haven't even received the minutes which are apparently still being translated! ???


Just a quick update for you (and anyone else that is interested)

Our AGM was held on 27 January and I have today received accurate minutes of the meeting in Spanish, English and German

[Suej]

Just a quick update for you (and anyone else that is interested)

Our AGM was held on 27 January and I have today received accurate minutes of the meeting in Spanish, English and German

I have also today received our inaccurate minutes! I'm inclined to give up!:angry:

[seppe]

Sorry to disapoint you with that.
Losts of blabla from the English president and promises from an expensive layer, but no results.
This financial year i expect an increase of the debts with 40.000 euros, totaling up to an estimated 600.000 euros. Much of that money has been payed by honest English owners.
I am really afraid to see the unpaid bills at the end of the fiscal year.
I will let you know as soon as a wonder hapened in Mare Verde.