Community makes a point

Business 2By Mariano Zunino

SPANISH Law is very complex and in this column, I try to make some sense of what can appear to be a very complicated matter.

This week it’s back to one of our favourite topics: Communities!

In Spanish law, the Community of Owners does not have any recognised legal “personality” rights. This means the Community doesn’t have any separate rights over the owners who comprise the community.

For example, take the issue of the treatment of the Community of Owners when it comes to the Community of Assets. The Community cannot act through its legal representative who, of course, is the President.

Legally, the “Community” is able to sign certain contracts, such as hiring a maintenance service. It can also sign labour contracts, or an insurance policy, or grant powers of attorney to act before Court on the Community’s behalf.

But the Community of Owners has no legal “personality” or individuality. This means it cannot replace the legal rights of a person on some matters. The Community may legally open and operate a bank account. But it cannot, for example, adjudicate on a property in the Community at an auction.

The Community also cannot register the ownership of a property on behalf of the Community at the Land Registry. This document would have to be registered by each and every one of the owners, according to their respective percentage or quota.

Another example is that a technically-bankrupt Community would face a different set of proceedings to a singular “personality” human. The difference is most important in many legal matters.

However, there are indications that things are changing. A separate issue is the signature of a letting agreement of a “Community” property between said Community and a “personality” (who may be a co-owner).

Not long ago, a Community hired a common premises property and applied for registration of the contract at the Land Registry.

This was denied by the Registrar who argued, among other reasons, that the property was not registered into the name of the Community because of its lack of legal “personality”.

After a number of appeals, the Court ruled that it was possible for the registration of a letting agreement to be held by a Community of Owners.

Without considering all the points of the case, it is relevant here to emphasise the possibility of registration of the contract and the legal “personality” of the Community.

The Court understood, after examining the documents (Minutes of the Annual General Meetings, Legalisation of Acts by the Land Registry and the unanimous adoption of the agreement), that we are witnessing an act of mere management (letting contract) via the President (or Vice-President), who is the legal representative, duly authorised by the Assembly unanimously .

Therefore, the Court does not share the lack of legal “personality” of the Community.

This is a step towards common sense.

There are many Community of Owners who rent out their premises and, therefore, should be well-advised from the very beginning regarding the representation of the Community, taking into account the majority in a General Meeting, for example.

Mariano Zunino Siri is a lawyer registered at the Tenerife Bar Association since 1991.


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Posted by on Jan 15 2016. Filed under Legal Matters. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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