Community debts on sale of a property
The buyer of a property facing debts to the Community
Dear clients and readers.
Our Law Firm currently represents the legal interests of several communities. And many neighbours ask us if the buyer of a property is responsible for the debts with the Community that the previous owner of the property had contracted.
1st.- WHAT THE SPANISH LAW OF HORIZONTAL PROPERTY (LPH) ESTABLISHES, (according to reform operated on June 27, 2013)
1.- Article 9, letter e) of the Horizontal Property Law states:
” Any person acquiring a unit in horizontal property ownership. Even where the title was entered in the Land Registry, shall be liable for, and the unit acquired attached to payment of any outstanding amounts payable to the community for general expenses by the previous owners up to the limit of the fees assessed for the period to
the date of the year when the transfer of ownership took place and the three preceding calendar years. The unit shall be legally burdened with the fulfilment of this obligation. The rules on precedence of debts stated above shall be equally applicable in this case.
In the deed shall include a statement by the transferor declaring that there are no outstanding debts for general expenses payable to the community or, in the event that there are, he/she shall declare their amount. The transferor shall produce at that moment a certificate concerning the state of debts with the community that shall coincide with said statement. Execution of the deed shall not be authorized unless the purchaser should expressly waive such requirement. The certificate shall be issued by the person acting as secretary within seven natural days of the request, with the approval of the president. Both shall be accountable, in case of malfeasance or negligence, for the accuracy of the data on the certificate and for any damages resulting from delay as to its issue”.
2.– This means in a nutshell, that the purchaser of a property is liable “with the property acquired” for the debts with the Community that the previous owners had up to the limit of those that are attributable to the overdue part of the year in which the acquisition takes place (sale and purchase at the notary’s office), and to the three previous calendar years as well.
EXAMPLE:
If the new purchaser has signed the deed in September 2023. He will be liable for the debts of the current year (from January to September 2023) and the three previous full years (2022, 2021 and 2020).
3.– On the other hand, the new owner will not be liable for the old debt with other personal assets. But only with the purchased property itself.
This means that in practice a real action would have to be brought against the dwelling. Accumulated to the action for payment of the debts permitted by the LPH. art.9 e), against the current registry owner of the flat (who is supposed to be the new owner-purchaser).
2nd.- WHAT DOES THE JURISPRUDENCE OF THE SUPREME COURT ESTABLISH?
I.- Judgment 22 APRIL 2015. 3º.- Decision of the Chamber:
“Well, the person obliged to pay the community expenses is the owner of the property at the moment in which they accrue (art. 9 LPH) and once the premises have been transferred the community expenses will have to be borne by the new owner, by the purchaser.
The expenses accrued prior to the transfer would be the responsibility of the previous owner. Since the obligation to pay them is not extinguished with the transfer of the property. And all this without prejudice to the real affection expressed in art. 9.5, second paragraph of the former LPH (currently art. 9.1 e), third paragraph).
The payment of the common expenses is configured as a personal obligation, payable by the person who, at the time the expense is incurred. Is the owner of the flat or premises, notwithstanding the Horizontal Property Law establishes a special guarantee for the collection of the amounts owed for the common expenses incurred in the last three years and the expired part of the current annual payment. A guarantee consisting of assigning the flat or premises in question to the payment of such amounts, regardless of who the owner is, “without prejudice to the relevant personal liabilities”.
The current owner, who was not the owner at the time the expense was incurred, does not become liable for the debt of the former owner. But with respect to the common expenses incurred during the aforementioned period of time, the premises are affected by the payment of such expenses. The new owner will only be liable for the same flat or premises and not for his other assets.
It is therefore clear that the former owner, as the owner of the premises at the time when the community expenses accrued until the date of its judicial transfer to the bank. Is the only one who should be liable for them and the bank, for its part, should be liable for those accrued from the date of the adjudication order of the property. Without prejudice to the real affectation of the same by the provisions of art. One thing is the guarantee or real affection and another is that the new owner should be personally liable for the unpaid quotas of the previous owner”.
II.- Consequently, and in summary of all that has been said so far, the obligation to pay the common expenses imposed by art. 9.1 e) of the LPH is an obligation “propter rem” determined by the ownership of the flat or premises. This real condition operates independently of the ownership of the property, being transferred with the sale of the property. But this does not make the new owner a personal debtor for the amount of the unpaid quotas by the previous owner in the period to which the real condition is retroactive.
III.– In short, from the reading of the aforementioned judgement it is clear that if the delinquent seller did not inform the Governing Board of the Community of the sale of his flat. Then both are responsible for the payment, the seller by solidarity and the buyer as his own debtor, with the flat.
IV.- With a similar sense, the Judgment of the Provincial Court of Lérida no. 272/2012, of 2 July establishes:
– “Article 21.4 empowers the Community of Owners to take action against the previous owner of the property or premises who is jointly and severally liable for the payment of the debt”.
-This situation occurs when the transfer of the property is not notified to the governing bodies.
-There is only one case in which the registered owner is liable for the payment obligation with the right of repetition. When it is the former owner who, in addition to not having communicated the debt to the governing bodies of the community. Has also failed to do so to the Registry (there is a lack of knowledge of the purchase and sale in the registry) and the new owner fails to pay.
With regard to the liability for non-payment of the instalments due before the transfer of the property. We have, consequently, as Gil Nogueras will say; a “debtor proper” who is liable {by means of art. 1911 of the CC with all his assets, and a debtor by legal extension or “guarantor debtor” who is liable for part of that debt, but as the aforementioned precept states, only with that asset.
It must be concluded that the liability of the purchaser of the property is not universal as in art. 1911 of the Civil Code, he is not liable for all his assets. But, in the case of attributing passive legitimation to him for the payment of the debt, as we will see in the following section. Which the Supreme Court does, he is liable for the non-fulfilment only with this property”.
3rd. CONCLUSION
It is essential that when buying a property, the purchaser’s Solicitors ask for a certificate from the Community at least 1 week before signing the title deeds. In order to know the debts that the property has. And in the positive case of Community debts on the Sale Process. He must know that he is going to respond “with the acquired property” of the current annuity and of the three previous years. Therefore, we always recommend our clients to retain from the price a sufficient provision to cover the payment of this debt. As well as other debts that the property may have (e.g. unpaid utilities, IBI, etc).
We hope you find this information useful and if you have any queries, please do not hesitate to contact our Law Firm.
4th HOW TO CONTACT US FOR FURTHER SPECIFIC ADVICE?
We hope you find this information useful. Remember that this is not intended to be specific legal advice, just a general overview. As independent lawyers, we can help you both by assisting you with all company and inheritance issues as well as to carry out a comprehensive background legal analysis on your consultation or problem, if required.
Should you be interested in receiving more specific information about Community debts on the Sale Process. Or simply get an independent 2nd opinion. (Either about this particular subject or any other), you can contact our firm in several ways:
1.- Call us or send us a WhatsApp now to (0034) 687 88 88 73.
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Finally, thank you very much for your attention, and in case you might have any questions or doubts at all, again please do not hesitate to contact us. We would like to stress the point that you will be in good hands, and you can be reassured that we will look after your interests in the most committed and professional way.
We look forward to helping you and the benefit of our “know-how”.
Kindest regards.
Mr Oscar Ricor
“NON-PRACTISING ENGLISH SOLICITOR IN ENGLAND AND WALES”, under the “Solicitors Regulation Authority” (SRA) SRA number 519196 and practising Spanish Solicitor
