Are the fines and penalties imposed by a community of owners legal? Can the community make additional charges on owners who pay late or do not pay their due fees?

Dear Sirs,

It was agreed in my Community that those neighbours who paid late or did not pay their fees would have a 15% penalty for late payment. I did not vote for this agreement. In addition and due to the poor estate of the community and also due to differences between myself and the administrator / management I have refused to pay my fees for the last 4 months. Now the community has sued me for the unpaid payments, increased by the 15% penalty. Some people have told me that this is not legal as the community cannot put sanctions, but others have told me that this could be possible.

Can you please confirm if the community can make this kind of agreement and if so what can I do?

Dear reader, thank you for your consultation.

Straightaway we must advise that even if you did not vote for this agreement, if it is properly adopted and adheres to all the legal requirements and formalities etc meaning that it is valid, then you must comply.

Unfortunately for you in this case, we have to tell you that it is possible for a community of owners  to adopt agreements that could impose penalties or fines on those owners who do not pay their fees, or are late paying them.

In fact, it is increasingly common to see communities impose penalties for late payment or unpaid fees which normally go up to 20% of the unpaid fees; and in general these claims are supported by the Spanish Courts.

Therefore in your case your legal options would be to challenge the agreement provided you have legal grounds to do so; either because the agreement does not comply with all the legal requirements, the notification for the meeting was incorrectly done, the settlement amount for your debt is incorrect, or the community has failed to notify you about the penalty agreement, etc.

In relation to the above and as we have pointed out, Spanish Courts recognise the possibility of communities to adopt these kind of measures. In this respect the Province Court of Alicante in its Section 9 (Audiencia Provincial de Alicante sección 9) on the 10th of May of last year in its Court Order number 249/2010 stated that the debtor should pay the owed money plus a 20% surcharge previously agreed on by the community.
The Court also stated that this 20% surcharge should be regarded as a penalty clause for failure or delay and since the community had filed a claim for the debt, the debtor should also pay THE FEES DUE + 20% PENALTY CHARGE + THE JUDICIAL COURT INTERESTS (as provided in the Civil Jurisdiction Law for a judicial claim) + THE COURT COSTS (solicitors, procurator fees etc. acting for the community).

So, in conclusion, it is our view that a community can legally agree on this type of penalty, and therefore unfortunately your only legal options are to challenge the agreement provided you have legal grounds to do so, as we have described above.

Should you find yourself in this situation or similar please do not hesitate to contact us and the appropriate advise will be provided.

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

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White & Baos
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