Last time I told about obtaining wildly varied quotes for an automatic irrigation system for our woeful garden, in the hope that the gardener’s opinion, that all it needed was “mucho mas agua”, would prove correct. The whole business of getting the quotes, and choosing one to do the job, had been a real pain in the backside. I knew nothing about irrigation systems (I’m now quite an expert!) and was getting no help from anyone – neither the administrator, nor my neighbours, despite the fact several of them had plenty to say about the state of the garden, who was responsible, and what “we” should do.
The work started on time, but the original estimate of one week turned out to be wishful thinking. After the second week of trenches and piles of dirt all over the garden, and with temperatures rising (I only took over the presidency in May and we were now into early July), people started complaining. I explained that the alternative would be to wait another whole season, and managed to hold back from saying that if the previous president had dealt with the situation sooner, we wouldn’t be in this position now. After three weeks and various setbacks, the work was completed.
The worst setback was the unanticipated need to install a pump to increase the water pressure. Apart from elongating the job, it added considerably to the final cost. Although it still came in at less than the most expensive of the quotes we had, I still couldn’t help thinking that I would be held responsible, and fully expected to be told how much cheaper and quicker it could have been done – by all those who were not around to offer their assistance earlier. As it happens, a remarkable thing occurred. The grass and plants started to grow! Within only a couple of weeks, the garden was beginning to look presentable for the first time in 2 and a half years. It seems the gardener was right all along. What’s more, he now started taking far more pride in his work, and by mid-way through the summer, my happy neighbours were already starting to talk about entering the Torremolinos In Bloom competition.
Everyone was happy. Except the president. I was slightly annoyed that the solution to the garden problem had been as simple as installing an automatic watering system, and yet had been left for over two years until landing at my door. But more significantly, I was aware that during those two years, the only action taken had been to constantly point the finger of blame at the developer. It seemed to me that we had inadvertently proved that the problem was in fact our own negligence, and I was concerned that this might further prejudice our already strained relations with the developer.
In addition to this, the increased cost of the job had left us with a serious cash flow crisis. To top it all off, someone mentioned that due to the water shortage in Andalucia, irrigation systems were banned, and once again there was an inference that the president could be held accountable for any illegal activity within the community. Funny how nobody said anything at the meeting when we agreed to go ahead with the job. Now I was feeling stressed!
The financial situation puzzled me. At the annual meeting the accounts had been presented by the administrator, and we were all delighted to note that we had a healthy bank balance, no debts, and therefore no need for an increase in our payments. On this basis, everyone had been happy to vote in favour of getting various jobs done, including the irrigation system and some other minor items, a couple of which I mentioned in my previous article. All community accounts have to be checked and approved by the president at the end of the financial year.
However, as the in-coming president, it hadn’t occurred to me to study the accounts in any detail, and neither, in fact, had any other owners. On closer inspection now, I realised where the discrepancy lay. Our financial year ends 31st March, so the accounts included all expenditure up to this date. However, since the meeting was held at the end of April (the only reason seems to be that both the president and the administrator forgot to call it sooner), the administrator had included the second quarter payments, made at the beginning of April, in the final calculation. So what we had was 15 months payments tallied against 12 months expenditure, and nobody had noticed. I’m no accountant, so maybe this is quite normal, but I and everybody else had been taken in by the appearance of a healthy bank balance. We had even voted to get sun loungers and umbrellas for the pool – items which have now been put on hold.
One of my first decisions as president was to communicate as much as possible with the rest of the community, since I have heard so often the complaint in many communities is that nobody knows what’s going on. After my first couple of months I sent a letter out (since many owners live elsewhere) to keep everyone updated on various issues. In this letter I explained the financial situation. However, I also had included in the letter the original quote for the irrigation system, and was now worrying about explaining the additional expense. Was I wrong to communicate so much? Was I just inviting criticism?
To date, nobody has questioned any of my decisions, so perhaps I’m being too paranoid. I suppose nobody is likely to raise any objections, for fear of landing the presidency themselves next year. At the end of the day, I still believe that a happy and healthy community depends on getting as many members as possible interested and involved in the running of it, and good communication is fundamental to the success of it. I will probably send another letter soon – if I find time in between writing these articles! Our administrator recently wrote to us to tell us about their new “24 hour online office” where everyone will be able to access all sorts of information regarding our community whenever they like. (I checked it subsequently, and there’s nothing on it yet, but it’s a start!) I believe EyeOnSpain have plans afoot for an Internet based system for communities, which sounds very exciting, so watch the website for more info on this.
Returning to the subject of finances, I said before that we had no debts. At the precise time of the meeting this was true. No doubt everyone reading this will be amazed, and indeed, I have never heard of any other community with no outstanding debts at all. This is obviously one of the biggest problems facing many communities. It can become a downward spiral, as owners who demand to know why essential maintenance work is being neglected are told it is due to lack of funds then refuse to pay their quota until all the bad debtors pay up, thus resulting in an even worse financial state.
You can almost tell the communities with heavy debts. Just look at any older buildings with disused swimming pools, for example. Non-essential facilities are always the first to go when funds are low, but I know of communities where the lifts are in a dangerous condition through lack of maintenance, because the coffers are depleted by non payment of community fees. In a brand new community, it is impossible to know how things will unfold, but a word of advice to anyone considering buying in an established community: always try to find out who the administrator is, and ask them about the community and it’s financial status before buying. Just because the seller of one apartment is up to date on his payments, does not mean that everyone else is, or that there isn’t a nasty surprise lurking around the corner, like extra payments to be made towards the new lift.
At the time of our meeting, everyone had paid up to date. However, I was to discover that this was only because a meeting was due, when any bad debtors would be named and shamed. I learned later from the administrator, that two (absentee) owners were perpetual late payers, and only ever paid after many reminders and occasional threats of legal action. Two out of only twelve represents a significant amount. Apparently this had been the situation from the very outset of our fledgling community, but had never been a major cause for concern since there had always been adequate funds for the day to day expenses, and they did always (eventually) pay up.
Having been mislead by our administrators creative accounting, and having authorised work which ended up going well over budget, I now found myself facing every presidents worst nightmare. At the time of writing, we are still waiting for one owner to pay for this quarter, with only a couple of weeks of it left before the next quarter is due. It could mean the difference between the gardener getting paid on time, or finding the heads of all our roses chopped off! I am considering proposing at the next annual meeting, that a discount be offered for prompt payers (after we put the basic quota up by the same amount, of course!) I think this would be better than a fine for late payers, since collecting any such fine might prove troublesome, if not impossible. I don’t imagine this will necessarily make the guilty parties pay any earlier, but at least it would mean that there would be some compensation to the community if they continue to delay payments.