What is the Legality of doubling our community fees at the AGM.

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15 Sep 2017 14:41 by promedia Star rating in Cheshire/Riviera del.... 131 posts Send private message

What is the Legality of doubling our community fees at the AGM?

Reading other forums and chats about serious debtors leaving years of unpaid fees behind them when they sell, and where in reality you are only likely to get 3 years fees back from any new owner, even though you have followed all the rules legally and chased through the courts for many years. this has annoyed us as we have two defaulters on our community who owe nearly 20,000 euros between them. Both have their apartments up for sale and we hope that they leave ASAP, however to stop this situation re-occuring and if they cannot sell for a number of years....

Our community committee has suggested a cunning plan, and we are looking for some feedback on EoS from the legal teams that monitor the situation and possibly other communities that may have adopted a similar approach?

The idea is to put forward a proposal at the next AGM to double our community fees as we have a number of large projects we wish to achieve moving forward. However we realise that this is a massive increase in costs for most residents so for the first year we would look to discount that cost by 50% if the payment is paid within 30 days - as this speeds up cash flow for the community. Then the following year the idea is to reduce the discount to say 45% (so an increase of 5% in reality) and similar reductions in following years untill the projects are completed, then we may revert to the 50% discount again. 

The default on this is that those owners that choose not to pay their fees within the 30 days loose their discount option, so when we are then chasing them through the courts their annual fees are currently say 2k, these would actually become after the AGM community agreement 4K euros. If the owner refuses to pay their fees for 6 years (6 x 2K) the community in reality wouldnt lose out if it only got 3 years money (3 x4K).

Has anyone ever done this, legally has it been challenged in a case, who is to say what the acceptable limit of community fee discount is, if 25% is acceptable, why wouldnt 50% be acceptabe to if its been agreed by the owners at an AGM?

Anyone any thoughts on this idea?

  



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Ian Cook - Golf Gardens Miraflores - The best place to live on the Costa del Sol

"A day without sunshine is like.................night"




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15 Sep 2017 15:43 by mariadecastro Star rating in Algeciras (Cadiz). 9226 posts Send private message

Legal Questions? Speak to Maria Direct

Just agreement of majority is needed. Whatever they decide is fine

The majority is the majority of present neighbors who represent the majority of the shares. Counting just votes of those owners with legitimate right to vote.

 



_______________________

Maria L. de Castro, JD, MA

Lawyer

Director www.costaluzlawyers.es

El blog de Maria



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15 Sep 2017 15:52 by IanCook Star rating in Cheshire/Riviera del.... 16 posts Send private message

Thanks Maria but would this stand up in court or would a debtor claim this is excessive and get away with it???



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15 Sep 2017 16:16 by mariadecastro Star rating in Algeciras (Cadiz). 9226 posts Send private message

Legal Questions? Speak to Maria Direct

No, if it has been legally approved by Community.



_______________________

Maria L. de Castro, JD, MA

Lawyer

Director www.costaluzlawyers.es

El blog de Maria



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18 Sep 2017 00:13 by Roberto Star rating in Torremolinos. 4461 posts Send private message

Roberto´s avatar

We did something similar years ago (doubled the fees and offered 50% reduction for prompt payment) to tackle one owner who habitually paid very late, causing serious cash flow problems (the community was new and had no reserve funds). The offending owner was very unhappy about the agreement (reached by majority vote at an AGM she did not attend) and made lots of complaining noises and threats. But the result in the end was, she started coughing up on time. I have absolutely no doubt about the legality of the decision, as the offender was a lawyer, so if there was any chance it could have been challeneged in court, she would have done so!

Good luck!



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"First get your facts; then you can distort them at your leisure"

Mark Twain

 

 

 




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24 Sep 2017 22:42 by hugh_man Star rating in Kent/Roda . 1562 posts Send private message

hugh_man´s avatar

Sounds like a very sensible approach Ian, and as others have said, should only need majority approval.

I believe excessive surcharges imposed on late fees, could be challenged in court which is why your idea has been used by many.

We increased our fees by 25% a few years ago based on a similar argument.

Payment within 30 days of invoice has gone up from 65% to over 90 and even the slow paying banks are trying to take advantage when they realise.

The only thing you may have to watch is persuading some die hards who can't see what paying more up front before receiving is discount is " In it for them".

Believe me owners can be dogmatic, but good luck.

Woukd love to hear how it goes.

Discounts on increased fees is definitely catching on.





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11 Nov 2017 00:02 by hugh_man Star rating in Kent/Roda . 1562 posts Send private message

hugh_man´s avatar

Ian Cook

 

How did your plan go?





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11 Nov 2017 18:21 by IanCook Star rating in Cheshire/Riviera del.... 16 posts Send private message

Our AGM is next summer, but in principal the president. Administrators and committee are all in approval. I'm sure our 3 debtors will have something to say........after the approval has happened!



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A meal without wine................. is Breakfast



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11 Nov 2017 19:02 by hugh_man Star rating in Kent/Roda . 1562 posts Send private message

hugh_man´s avatar

Have you commenced Monitorio in Spain against the debtors, it will place a charge registered against the property or employed a Debt collector in U.K. if British residents?





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11 Nov 2017 20:41 by windtalker Star rating. 1604 posts Send private message

A good friend ours had basically the same problems as your small site with none payer's ....when she took over as chairlady ...the site she took over contains 35 dwellings ...11 of which would not pay the community charges and yet still used their properties regularly... Basically what she done with the approval of the community was to contact a Lawyer that gave the none payer's one last chance to pay the outstanding dept ...or a legal charge would be put on the property to prevent them from selling unless the dept was cleared... she also authorise the Lawyers to send in the dept collection agents in the UK via the small claims courts...by doing this they are now have 28,000€ in the community bank account ...if your community chair person is not willing to go down this road then you should consider replacing them asap ...before your complex fall's in to disrepair..as far as doubling your community charges are concerned you will have to pay this on a temporary basis other wise your site will fall down around your ear's...and make it clear that when the outstanding money's are recovered those of you that have being paying up will get a rebate .

 


This message was last edited by windtalker on 11/11/2017.



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12 Nov 2017 11:54 by steone Star rating in Santiago de la Riber.... 385 posts Send private message

Just a question on the way monies are allocated here in Spain. As an example if one has not paid their water bill last month but then pays for the current month the water company allocates the money to the current month and leaves the previous month as overdue. Therefore although one is paying regulary (now) they still have a month outstanding and the service can be cut off. If we now look at the community charges for someone who is several years in arrears and they now pay something, does this get allocated to the overdue amount or does it get allocated to the current period? As stated above the 'normal' practice in Spain is to use the payment to cover latest debt and then work backwards. However in the U.K. the usual practice is to allocate the money to the oldest debt and work forwards. Anyone have a definitive answer?



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12 Nov 2017 13:26 by hugh_man Star rating in Kent/Roda . 1562 posts Send private message

hugh_man´s avatar

Steone

 

You are correct about standard practice in Spain, not sure it is a definitive answer but

At one stage our Administrator was supplying wristbands to owners use pools to those that paid current fees, even if they had an outstanding debt.

We have persuaded them to change as per U.K. or even general global accounting to set off any payment made against the historic debt first.

They will also not get any discounts available on payment of current invoice IF a previous debt exists.

Community decision, oldest debt gets paid off first.





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12 Nov 2017 13:36 by hugh_man Star rating in Kent/Roda . 1562 posts Send private message

hugh_man´s avatar

Windtalker

Sadly it is entirely legal in Spain to use or even rent your property even if you are a debtor.

Debtors May not vote at AGMs, Big deal.

Our Community took a decision sometime ago,  like many others NOT to issue wristbands for use of pools, luxury items,  to debtors, controversial but no one has challenged it so far.

We also increased our fees by 25% then gave a 20% discount to those who paid on time, a small net increase but more owners paying keep future fees down.

Fees collection on due date went from 65% to 85% in a short time and now it is only the long term debtors who we take to Court and the Banks as notoriously slow payers that effectively pay or owe the increased fees.

Most sensible owners very happy.





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13 Nov 2017 00:28 by IanCook Star rating in Cheshire/Riviera del.... 16 posts Send private message

We have 60 apts on the community and 3 of those don't pay, one is 6years behind and the other 18 months ( he owns two apts and rents one out) 

we start legal action against debtors after each AGM but solicitors says it's very difficult... Owners are French and English with no UK base, both are working......and just don't want to pay!

doubling the debt will at least give us 6 years fees as generally we are informed you will only get back 3 years fees if you go legal or the property is sold?

currently €20,000 outstanding between them!



_______________________
A meal without wine................. is Breakfast



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13 Nov 2017 01:41 by hugh_man Star rating in Kent/Roda . 1562 posts Send private message

hugh_man´s avatar

The Law states, current year plus 3 previous if Property is repossessed  so the sooner you you increase the more they will owe.

Lawyers can commence a Monitorio process in local courts, costs woukd be added to fees outstanding.

You can claim ALL outstanding fees with a Monitorio each year or two.

It May be a slow process but the court could at least place a charge on the property, preventing any sale until settled.

If you can trace the owners and they are working or have other assets, it’s very likely these could be claimed againstvas well.

Great idea to increase fees but I would push the Lawyers for updates on Monitorio, the case has to be heard at some stage, IF slow. 





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13 Nov 2017 10:09 by windtalker Star rating. 1604 posts Send private message

As Hugh man said ...your chairman is wise to increase the Fee's I am sure this will only  temporary    ..the next step for them to take is in my post .





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13 Nov 2017 12:47 by hugh_man Star rating in Kent/Roda . 1562 posts Send private message

hugh_man´s avatar

I have to say, I’m still awaiting payment of an outstanding debt due to the court case running its course and demanding the debtor pays, even going back to 2011/13 debts.

i have had more and quicker success pursuing a debtor with U.K. assets in U.K. Courts

 

Many debtors do pay before it goes to court to avoid costs but unless you commence the Monitorio process many debtors will just ignore your threats as meaningless UNLESS they receive that legal letter.





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19 Sep 2018 22:36 by IanCook Star rating in Cheshire/Riviera del.... 16 posts Send private message

Just to let you know the doubling of our community fees with a 50% discount for prompt payment was voted on and approved at our age in July.

on the first quarter this was implemented we wrote and put notes up in the community notice boards so that everyone was reminded.......everyone paid on time bar our 1 serious debtor.

total success as far as we are concerned.

thanks for all your advice on this.

just adding a new thread about our serious debtor....



_______________________
A meal without wine................. is Breakfast



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