Co-owners' association in Spain: a formality or still important?

When you invest in a property with an urbanisation or you buy a Spanish flat, you are immediately a member of the co-owners' association. However, many clients do not pay attention to (enforced) co-ownership in Spain. But is this justified? In this article, we will briefly explain how a co-owners' association in Spain works (hereafter: VME).

Why is the VME relevant?

The VME sets the common rules and costs for the co-owners. Most buyers only ask about the annual costs. However, if you wish to rent out, it is best to also look at the co-ownership rules. For example, since 6 March 2019, the VME has adopted the possibility of restricting or even banning holiday rentals.

Read more about the annual cost of a property in Spain.

The rules of the VME

The rules of the VME consist of three levels. First, we have the co-ownership law (horizontal co-ownership or Ley de Propiedad Horizontal) with the general rules.

In addition, each co-ownership has its own statutes (Escritura de División Horizontal). Consider establishing the private and common parts in the residential complex, as well as the distribution of votes and costs for each co-owner (the quotas per owner). The articles of association are laid down by notarial deed and registered at the registration office. In principle, an amendment to the articles of association requires unanimity.

Finally, there is also the co-owners' rules (Normas de Regimen Interno). This will include the day-to-day and practical matters. For example, decisions for the maintenance of the common parts (swimming pool, garden, gates, etc.), certain safety devices, additional services (security, waste collection), etc. are included in the co-ownership regulations. In principle, a regulation amendment requires a simple majority.

If you have a new build purchases, you will find that the purchase agreement contains a clause authorising the promoter to lay down the bylaws and rules of co-ownership. The owners can change the rules at the next meeting, subject to obtaining the necessary votes.

Read more about buying new construction in Spain.

The organs of the VME

The bodies of an urbanisation in Spain (or an apartment building) are the general or special meeting of co-owners (la Junta), the chairman, the secretary and the trustee (el Administrador). Optionally, vice-presidents can also be appointed.

The general meeting meets annually and decides on the annual accounts, budget and agenda items included. The quorum is 3/5 of the quotities. A special general meeting is possible if co-owners with joint 25% of the quotities request it. Normally, the notice period is three days, but the regulations may deviate from this.

Note: only co-owners who have paid their common expenses in full are entitled to vote.

The trustee is responsible for the day-to-day tasks and administration of the co-ownership. The duties are similar to a syndic in Belgium.

Holiday rentals and co-owners' association in Spain

Since March 2019, the general assembly can prohibit holiday rentals or tourist rentals within the co-ownership via an amendment to the articles of association. This can be done with a decision of 3/5 of the (present) quota units. It is therefore important to get the VME's constitution checked before buying.

If your property has already obtained a rental licence before the vote, you can normally continue to rent out.

In addition, the general meeting can impose higher common charges on co-owners who rent out their property to tourists.

According to case law from December 2023, the co-owners' association can also prohibit holiday rentals based on a vprohibition in the regulations or articles of association to carry out an economic activity within the complex.

Read more about renting out in Spain.

Obligations of the co-owners

As a co-owner, you are mainly obliged to contribute financially to the common costs. Besides the common costs, there is also a contribution to the VME's reserve fund. This contribution is a minimum of 10% of the annual budget.

Know that as a new owner, you are responsible for outstanding fees and contributions up to 3 years before purchase. You therefore assume the seller's debts to the VME.

Co-owners' association in Spain: decision

When buying property in Spain, it is important not only to inquire about the common costs. It is also interesting to check the minutes of past general meetings. Likewise, the articles of association should be thoroughly checked if you intend to rent out.

Read more about the pros and cons of urbanisation in Spain.

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