Spanish homeowners refuse to cut fees despite budget surplus
A Spanish homeowners' association refuses to lower monthly fees despite a surplus. Fear of special assessments clashes with the law and the risk of mismanagement.
English · Original discussion in Spanish · Published
Homeowners refuse to cut fees despite surplus after building works
The decision seems like an economic contradiction. A homeowners' association in Spain that doubled its monthly fee from 150 to 300 euros to install lifts is now rejecting the property manager's proposal to reduce it to 200 euros, with no new projects planned. The majority argument: it is more convenient to fund future renovations through the regular fee than to face special assessments, which require wider majorities and can be challenged in court. However, Spain's Horizontal Property Law requires ordinary and extraordinary expenses to be kept separate. Accumulating more than 100,000 euros a year in the reserve fund may be legal, but it invites the temptation of unnecessary spending or even mismanagement.
Against the comfort of avoiding special assessments, other owners prefer one-off payments and keeping their liquidity. The risk of the manager or the association president having a large fund without oversight is not negligible. The debate is not only economic: it is a tug-of-war between collective foresight and individual autonomy. The fee will probably stay high until an urgent repair or a court challenge forces a change. By then, the accumulated fund will be a powder keg.
The decision seems like an economic contradiction. A homeowners' association in Spain that doubled its monthly fee from 150 to 300 euros to install lifts is now rejecting the property manager's proposal to reduce it to 200 euros, with no new projects planned. The majority argument: it is more convenient to fund future renovations through the regular fee than to face special assessments, which require wider majorities and can be challenged in court. However, Spain's Horizontal Property Law requires ordinary and extraordinary expenses to be kept separate. Accumulating more than 100,000 euros a year in the reserve fund may be legal, but it invites the temptation of unnecessary spending or even mismanagement.
Against the comfort of avoiding special assessments, other owners prefer one-off payments and keeping their liquidity. The risk of the manager or the association president having a large fund without oversight is not negligible. The debate is not only economic: it is a tug-of-war between collective foresight and individual autonomy. The fee will probably stay high until an urgent repair or a court challenge forces a change. By then, the accumulated fund will be a powder keg.
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Summary of a discussion on Burbuja.info - Foro de economía, actualidad y política., translated from Spanish and reviewed before publication. Read the full discussion (57 replies).
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