COMMUNITY OF OWNERS: THE MAJORITY NEEDED.

(Community of Owners: legal advice)

 Dear Sirs,

 We are a small Community of Owners where one of the owners owns 4 properties out of the total 10 properties. This owner has quite an aggressive manner and wants to change the administrator, change the gardener and make a series of agreements that the rest of us do not believe will benefit our community at all; in a nutshell he wants to be President and rule the roost. We strongly want to stop this from happening as we are convinced that he has poor intentions and we don’t trust his management. It seems that he has convinced 2 other owners to vote for him, so in total he represents 6 of the 10 properties which is roughly 60% of the Community. What can we do to avoid this?

 Dear reader,

 Thank you for your email from which we understand that your community has 10 properties and only 7 owners, since one of the owners is the proprietor of 4 houses and the other 6 owners own 1 property each.

 The first thing to point out is that if all the owners go to the board meeting, even when the owner of the 4 properties agrees with the 2 other proprietors he will not have the majority of votes, as in spite of them having 60% of the community shares together, they will only represent 43% of the owners votes (i.e. 3 owners out of the total of 7 owners), and the law requires there to be a majority of both shares and owners.

If we analyse the SPANISH HORIZONTAL DIVISION LAW 49/1960 (LPH) (Ley de Propiedad Horizontal), (which governs units of ownership) we will see that the essence of this law deliberately seeks to protect the weakest proprietors / owners from being overridden by the strongest proprietors / owners of several properties. In particular articles 16 and 17 point out the following:

Should the majority of the proprietors representing also the majority of the community shares not attend the board meeting on 1st ballot, a 2nd ballot will be called at the same time and date, but this time without being subject to quorum.

And other parts of the same articles also reinforce that the law requires the majority of votes and the majority of shares. In fact the law states that votes in favour of three fifths of all owners representing also three fifths of the shares are required.

Likewise, other parts of the same articles also confirm that the law requires the votes in favour of the majority of the owners representing also the majority of the community shares to be required.

Therefore it can be concluded that the LPH Law states that in order for an agreement to be accepted, it needs to be voted upon and passed, not only by the majority of the owners, but also it is necessary that these owners represent the majority of the community shares. In effect, this means that according to the SPANISH HORIZONTAL DIVISION LAW 49/1960 (LPH) each proprietor is effectively assigned with 1 vote, regardless of the number of properties actually owned by him.

 The LPH Law establishes the need at the 1st call for 2 different majorities to be obtained in order for normal (i.e. standard) agreement to be valid i.e. firstly, the majority of votes (owners) and secondly, the majority of shares. If both these majorities cannot be reached at their respective ballot, then the meeting will need to progress to a 2nd call. At the 2nd call a majority of votes of the owners present at the meeting will be accepted, but with the proviso that the majority of votes must represent at least 50% of the shares (owners) present.

 This Law aims to avoid the strongest proprietors / owners of several properties seeking to take control over the weakest proprietors / owners of just 1 property.

 Therefore, referring back to your particular situation, if the owners who are not in favour of the proposed changes attend the Board meeting and outnumber the owners who are in favour, then the owners in favour will not reach the required majority because as we have seen from the above, having the majority of the shares does not represent the majority of the votes (owners). This means that they will not be able to force a change of President. Therefore the current Community President can remain in his role, which from the sounds of it will be to the greater benefit of your Community.

 The information provided on this article is not intended to be legal advice, but merely conveys general information related to legal issues.

Carlos Baos (Lawyer)

Tel: 966 426 185

E-mail: info@white-baos.com

White & Baos 2011 – All rights reserved

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