If you are buying a property abroad which is within in a complex then the likelihood is there will be some form of Community of Owners. You will therefore own your property and also a share of the communal areas – after all somebody has to own them. This is similar to the concept of Common hold property in the UK
It is of course important that you understand how the Community of Owners works. In some countries like Spain, for example, the share of the Community of Owners that corresponds to your property is worked out as a percentage of the total complex. They will take the square area of your property and work this out as a percentage of the total square area of all the properties and then you will be responsible for that same percentage share of the communal area. On smaller communities you may own several percent. On a much larger community it may only be a fraction of a percent.
As an owner of a property and a member of the Community of Owners you have certain rights and obligations;
You are obliged to pay your share of the community fees. These are normally set out in the annual budget at the Annual General Meeting. You will pay your share of the total cost according to your percentage of the Community of Owners. Therefore if the share that corresponds to your ownership is 1% of the total then you will also be responsible for 1% of the total costs.
The Community costs include things such as insurance, gardeners, swimming pool cleaning, lift maintenance, general maintenance, cleaning and general administration costs. The insurance will normally cover the buildings as a whole but it is still worth double checking this rather than taking this for granted. It is rare for contents to be covered.
If you do not pay the community fees then the Community can register a charge against your property and ultimately can force the sale of it at auction to recover the money due. You may also be excluded from voting at meetings if you are not up to date with the Community fees.
You have the right to attend the Annual General Meeting and any other meetings that happen during your ownership. The voting at the general meetings normally follows the percentage principal – i.e. if you have 1% of the Community of Owners then you also have 1% of the votes at meetings.
At the meetings (AGM, EGM or SGM) you have the right to raise issues that affect the Community of Owners and to vote on the appointment of officers. You also have the right to put yourself forward for a position that becomes available.
In addition, you have the right to be informed of when the meetings are to take place in advance.
Some of the resolutions which need to be passed at the meetings will require differing percentages of votes to approve. Votes to change the rules themselves, for example, require unanimity whereas other votes will require just a majority of the shares.
Change of ownership
You have the obligation to inform the Community of Owners should there be any change in ownership of the property
You have the obligation to follow the Community Rules. The Community will have a set of rules which are designed to maximise the enjoyment and safety of the owners in general. Normally they are quite sensible things such as no swimming in the pool after dark or no loud music after a certain point of the day.
In theory the running of a Community of Owners should be quite a democratic process. However, what tends to happen is that the majority of owners do not get involved in meetings and as a consequence, a small number of owners take charge and run the community themselves. Sometimes this works and other times it can cause problems. It is therefore worth spending some time trying to find out how the community of owners currently is set out and administrated before buying. It is also worth asking how much the community fees are each year ( your estate agent should be able to provide this) as well as identifying what percentage corresponds to your property – 5% of a small amount may be less than 1% of a large amount!
If you would like to know more about the Community of Owners for properties abroad and how they work in practice, then you can contact our international conveyancing team.