Common expenses: the curse of the property market
By describing common expenses as a ‘curse’, I am simply emphasising the seriousness of the problem related to unpaid common expenses. There is an obscure law governing these payments and it is doubtful if it can ever be applied properly.
The question raised is whether it is necessary or not for the management committee of a project or building to registered at the Land Registry. The law says this is a must, the Land Registry says it is not necessary and that only a general assembly with 50%+ of votes applies. The administrator should not be paid, the law says. Who, then, will undertake this arduous task that requires extra time and causes unnecessary friction among cohabitants in a building?
The law says that for those who do not pay the charges, their debts should be paid by the rest of the (consistent) residents who should then undertake legal proceedings to recover the amount. That means the consistent resident is burdened with the unpaid common expenses, as well as legal and court fees, the hassle of appearing in Court and by the very end, the debtor probably disappears (if the unit is sold to a third party, or has a tenant who does not pay) or even the Court awards partial payment by instalments of 10-20 euros a month. When a simple court case costs around 2,000 euros, it is clear when and if this debt will ever be received.
It is inconceivable that a buyer of a unit at a cost of at least EUR 200,000-300,000 would not be interested to pay common expenses which could amount to EUR 500 a year, and thus maintain the value of the investment, use services such as cleaning and elevator maintenance, and of course maintain a level of safety. The problem gets much bigger in the case of holiday homes where there is a lack of understanding among the residents with the presence of foreign, local or seasonal buyers or tenants, the outcome of which we see every day with empty swimming pools, wild grass and weeds growing all over the place and projecting a sense of abandonment.
There are also those who protest at everything who refuse to pay for sharing such common services simply because they have a bone to pick with the developer, and often resort to the excuse of “if the other tenant does not pay, why should I?” or “I’m not happy with the cleanliness and thus will not pay,” and other silly pretexts where these tenants mainly punish the consistent residents and even themselves, thus degrading the value of their own property and certainly of others.
Nevertheless and despite our constant efforts to diversify the law on common expenses, the issue has been stuck at the House of Representatives and awaits discussion for the last 15 years! The matter is simple – the Minister of Interior should insist on the provision that there must be registered management committee, the outstanding fees must the responsibility of the shared ownership of the unit and upon any future transfer, mortgage, sale, etc. of that, all dues must be settled. It is not the management committee that should chase the debtor tenant, but the other way around, that the inconsistent resident should chase the Administrative Committee if he believes he has been wronged.
In respect of the tenancy agreements, there remains the other serious problem of maintenance of the roof. This is a common area, unless a certain unit has exclusive right of use of that roof, which is common in holiday homes and duplexes. In the case of shared roofs, suppliers and others often place various equipment such, as the air conditioners, satellite dishes, additional water tanks, solar panels, etc.) which these suppliers and their technicians will not hesitate to drill or damage the roof-top insulation and this raises the other question of who is responsible for the water leakages, etc., since it is not clear which of the say, ten tenants hired the suppliers who caused damage to the roof.
Unfortunately this behaviour of non-payment
of maintenance charges exists among all financial and professional circles. Let’s take, for example, the management of an apartment building with an average value of EUR 500,000 and the otherwise well-todo tenants owe back pay in common expenses, as a result of which there is no proper maintenance and the whole project starts to crumble.
Then we have another building where 12 residents are consistent and despite the 24-year age of the building, it remains in excellent condition, both because of consistent maintenance and due to continuous upgrading, thereby raising the value of the units.
The situation of non-payment of common expenses is tragic and is a matter of poor mentality, something that unfortunately a lot of foreign buyers are also following. In one such case where our office undertook the collection of common expenses, we took legal recourse case for the demolition of illegal constructions by one owner, the others tenants paid EUR 2,500 in lawyers’ fees and other expenses. So, now we will have to chase the accused tenant for the collection of the 2,500.
Is this any way neighbourly manners?
The “social fabric” (we learned this new cliché from our very wise MPs) was “rescued” by our deputies who supposedly worked so hard, day and night, to save the shop hours farce. Where, then, is that same “social fabric” when a 69 year old lady with a heart problem, can not climb the stairs for three floors, while her neighbour has to carry her bags of shopping because the elevator is not working caused by the non-payment of common expenses and the lack of proper maintenance) of the lift.
Unfortunately, this is who we are. Everyone trying to make ends meet, while both the governments of the day and our House of Representatives failed to do anything because they are too busy regulating shop hours or the “urgent matters” of water sports.