The Don Amargo community in Sabinillas can’t afford to use their pool due to the bank’s debt. :: S. Vega
The association of property administrators estimates that banks and savings banks owe some nine million euros in community fees in the province of Malaga.
According to the Consejo General de Colegios de Administradores de Fincas de España, the condition of many blocks of flats and developments could be compromised as many communities, where several properties have been repossessed by banks, are unable to meet the general running and maintenance costs with existing residents’ payments alone.
The Consejo General started to notice the increasing community debts run up by banks in 2009 after the economic crisis and slump in the construction industry started leading to mortgage default and repossession. Now the association estimates that banks are not paying community fees for around 4,000 properties, running up an average debt of 2,000 euros per property. The majority of these homes were reclaimed by banks not only from families but also from struggling developers.
The bank debts are thought to amount to 16 per cent of the total unpaid community fees in the province - some 61 million euros. In some properties, even after increasing the monthly quota, communities are having to cut down on services such as cleaning, maintenance, lighting or gardening. In the most extreme cases communities have stopped paying their electricity and water bills or have resorted to loans to cover costs, explained Fernando Pastor head of the Malaga branch of the association of administrators.
The situation is more common on the western Costa del Sol from Benalmádena to Sabinillas as well as in_Rincón de la Victoria. Pastor explained how residents feel “tremendous indignation, especially in cases where they have watched their old neighbours being evicted from their homes because they couldn’t pay the banks.”
The administrators’ association has given a significant part of the nine million euros up for lost.
According to Pastor, there are banks that try to avoid paying the monthly fees by delaying inscription on the Property Register for as long as possible.
“Once the bank has repossessed the property, the trick involves keeping the paperwork in a drawer, without taking it to the Property Registry or informing the community of property owners,” said the representative.
The ‘Horizontal Property’ law states that a property buyer has to pay outstanding community fees from the current and previous year. Normally a repossessed house or flat is in debt with the community; if the owners couldn’t afford their mortgage it’s unlikely they would have paid their monthly fees.
Pastor explained that if the bank does not register the property until it has been sold on, during the interim period the administrator has no idea who is the legal owner and cannot take action. The new owners then find themselves with the debt the bank didn’t pay.
Meanwhile any outstanding amount prior to the period payable by the new owners still has to be claimed back from the former owner who is most probably insolvent.
In Pastor’s opinion the majority of banks try not to pay, although cases rarely reach the courts because they do pay off the debt when they are notified of legal action.
Sources from the financial sector explain that this situation can occur “temporarily” between the repossession and the registration, the moment when the new owner legally takes possession of the property.
Despite Fernando Pastor’s opinion that banks don’t pay “as a rule”, some financial institutions say they do. A source from Unicaja pointed out that “all the properties are registered” saying out that if they weren’t they would not be able to sell them on. At La Caixa sources said that “under no circumstances” would the bank fail to pay anything owed by an acquired property. Other banks consulted failed to comment.
Administrator Rafael Martín said that “normally we have problems with these entities; they pay every four or five months.” He gave the example of a community of some 50 homes in Torremolinos that has taken a bank to court twice after a property was repossessed but never registered.
“We haven’t used the swimming pool for two years”
The Don Amargo development in Sabinillas (Manilva) is not getting the repairs it needs because a bank, the owner of two properties, has run up a debt of 4,000 euros in three years.
“We haven’t used the pool for two years because of the bank’s debt,” said community president Juan Arias. He added that the maintenance of the pool was too costly.
“We’ve changed our electricity contracts to reduce the bills,” said Arias. The only way for the community to “survive”, he explained, is to reduce services. Now residents have their fingers crossed that the lift does not stop working.
Also in Manilva there is a luxury development where a bank owes 15,000 euros for just one property.