Participation Quotas

Article 606 of Civil Code of Spain clearly states: “The titles of ownership, or of other real estate rights over real estate property, which are not duly registered or recorded in the Property Registry, do not adversely affect third parties.” For this case at hand, it implies that no agreement that has not been duly registered can affect those that were not part of it. The importance of this cannot be overstated. As a consequence: only the master deeds, the deeds for my private property and valid meetings since I became an owner are binding towards me (before that, I was a “third party”).

If “quota modifications” have ever been agreed by previous owners (requiring unanimous agreement or, if contrary to law, absence of challenge within 12 months) then none are binding upon me (since none have been registered). Therefore, only registered deeds are relevant to me in regards to quotas (previous agreements may apply to other owners) .

There exists obvious conflict between the specific quotas that are expressively established in all Master Deeds and Article 6 of the Community Statutes (included within first phase Master Deed - Finca 21.913 - and referenced by the other three). While quotas in Finca 21.913’s Master Deed are internally consistent, those in the other fincas are not: they fix quotas that are not reconcilable with the Community Statutes they refer to, as they do not consider the quotas of prior building phases (although they could have). Article 6 of the Community Statutes contains no specific numbers, only words implying “rules to determine quotas”. Hence, it is important to check if “rules to determine quotas” can have validity in Law: which appears not to be the case.

On the other hand, specified quotas are determined – that is with fixed, numeric percentages for each unit – on each Master Deed, as a percentage of the total for that Master Deed. The quota for each unit is registered on one of four Master Deeds, but only as a part of that specific construction. This is an irregular situation. The requirements of Article 396 of the Civil Code may still be met for a single Community of Owners to exist, yet the calculation of quotas is as if 4 x Communities of Owners exist.

Obviously, with the history of 4 building phases, modifications of various units and 24 units listed on the first Master Deed that were never built, there is a terrible confusion. All 4 Master Deeds specify a total of 255 units of which only 231 (including space for 38 private storage rooms) seem to have been built: a total of 217 residential units of which it is public knowledge that 24 were never built (in Finca 21.913)

  • Phase 1 (Finca 21.913)’s deed has internal discrepancies between the described constructed square meters of some of the blocks and the total constructed square meters of the individual units. This is a number between 1 and 2 m², but further complicates the issue. Also, block 9’s description of its units is different from the individual units that are later listed as being part of this block. (Two type C units in the block’s description seem to turn into a type E and a type B unit in the individual unit’s listing. This doesn’t affect m² as 2 x type C units have the same surface area as a E and a B unit combined.) Terraces for phase 1 units were only added as an afterthought, hence were not considered in defining the quotas.

  • Phase 2 (Finca 26.092) contains only 7 units. It becomes apparent when looking at this finca that although different surface areas are specified for terraces, they are also not considered in regards to quotas (i.e. some units have double the useful, unbuilt area than others, without it being accounted for in quotas).

  • Phase 3 (Finca 27.612) contains 50 units (of which 26 are storage units). The status of the storage units is complicated. This finca does not specify m² of the storage units, although it attributes them quotas. This is illegal. Not only this, but all of the quotas add up to 100,004%. These additional 0,004% seem to correspond to a storage unit. There is also an error in that a storage unit of 0,003% (21) is entered in duplicate.

  • Phase 4 (Finca 29.526) contains 42 apartments (54 units, of which 12 are storage rooms, again with a complicated status). This finca suffers similar issues as the former. It also does not specify a quota for one storage unit, which can only be inferred.

In summary: 255 units (of which 217 are residential units) in Master Deeds and 231 are built (of which 193 are residential units). 38 storage units in Master Deeds, all built (with quotas, yet these quotas do not seem to be reflected in any AGM).

Whereas, a map distributed by Community Leaders and “reception staff” (both physically and online) details 196 apartments.

The confusion regarding quotas seems to be so dire that even the Administration does not provide ownership quotas on AGM minutes, which is contrary to art.19 d) of the LPH. This situation is irreconcilable with the Law and requires either a court resolution or an agreement of all owners, all by article 5 (1st paragraph)/article 17.6 LPH (unanimity). The logical solution is to apply article 5 (2nd paragraph) to determine (to calculate) and fix (to specify in writing) the quotas.

Taking into account the units described in the Master Deeds with already illegal rules for the exercise of determining and fixing the quotas leads to results that still diverge from those AGM minutes that included quotas. Not only that, but apartments of the same type, with the same surface area, and with the same property quotas in the Master Deeds and that therefore should have the same quotas are represented in the AGM minutes as having different quotas!

Attempts are ongoing to understand and recreate the quotas of AGM minutes; the Administration have not responded to requests for information or assistance in this task. The fact that this is difficult shows that “rules for determining quotas” (rather than outright determination of quotas) is insufficient and demonstrates why it is against the law. Participation quotas should be clearly stated and therefore straightforward not just because the law requires them to be so, but because the resulting confusion of such a situation is irreconcilable with the LPH’s functioning. It is, however, already possible to conclude that if all units that are given quotas in the Master Deeds are considered - and only their surface area is considered except in regard to storage units which are treated differently AND without considering private terraces - then the quotas do not match the ones listed in AGM minutes where such quotas are provided for owners present or represented. Therefore, the Administration before Ammex seems to have done its calculations differently (No storage units? …but then what is the validity of a Master Deed?; No unbuilt units? …but then how did Naturaleza accrue its debt?; Including terraces? …but then why do the same apartment types with different-sized terraces have the same quotas?)

It appears that the law, the Master Deeds and the Community Statutes are being interpreted in a way for the AGMs to obscure who pays what. It would be interesting to find out how owners’ invoices and property quotas compare: Are owners being charged their fair share of annual budgets? Fair share of what? How are these shares being determined? This, of course, is assuming that the AGMs represent a correct interpretation and application of the “quota rules” laid down in the statutes; as both Master Deeds and Community Statutes would trump AGM quotas (if they are different). Simply put: AGM quotas are either legal (in accordance with deeds/statutes) or not legal (contrary to the deeds/statutes) in much the same way that quotas in the deeds/statutes can be in accordance to the law or not.

The result of this research (from studying the Law, the Master Deeds and the AGMs) is that all three situations conflict: all three positions are irreconcilable with one another.

An attempt to fix this situation is both imperative and urgent. A reasonable proposal, to acheive maximum consensus, must be considered by a meeting of the Board of Owners in a manner compliant with correct legal procedure. This will ultimately fail - even if Community Leaders and Administration permit correct legal procedure to occur - as a single vote against it will lead to the motion being denied. Even so, to attempt it is the correct choice (since, if it works, it could avoid costly legal action).

When this fails, my next step will be to challenge the quotas in court, guarranteed to incur substantial financial cost for all parties. This may take several years for a conclusion - and may require appeals to higher courts - until an adequate solution is reached. It is specifically noteworthy that it is not necessary for me to have paid quota fees to proceed with this court action. Mr Chacon (I am sure) will be happy to charge you another half-million euros, I don’t plan on contributing to that.

One important decision for owners to consider is whether to aim for a single Community of Owners (as per the statutes) or for a Group of Communities of Owners (as per Articles 24.2b and 24.3 LHP, which may require less modification of deeds; a ‘Group of 3’ - by combining Phase 2 with Phase 3 - would allow for divisions of power).

Participation Quota Proposal

Participation Quota Proposal

A detailed proposal for calculating fair participation quotas for the community, taking account of criteria in the Law of Horizontal Property and modifications of structure and use.

Potential for Civil Legal Action

If agreement cannot be obtained by rational discussion and collaboration amongst owners, then seeking the judgement of a court by civil legal action may be the only solution.

Further Reading

  • Título constitutivo de la propiedad horizontal

    The constitutive title, also called the horizontal division deed, [Master Deed] must contain:

    • Description of the property as a whole.

    • Description of the units and premises, assigning them a sequential number.

    • The participation fee corresponding to each unit or premises.

  • Cuota de participacion asignada en el titulo constitutivo

    Each owner may demand that their contributions toward the common expenses be in accordance with the participation fee assigned in the constituent title [Master Deed]

  • CUOTAS DE PARTICIPACIÓN VERSUS COEFICIENTES DE PROPIEDAD

    An interesting study of jurisprudence, comparing the concepts of “participation quota” and “ownership coefficient”. These terms are often used interchangably, but are not interchangable and should be differentiated. For example, “participation quota” should account for anticipated use of leisure facilities, amongst other factors (not only m² area of property units). “Participation quota” can be decided independently of “ownership coefficient”, by corresponding and justifiable agreement of the Board of Owners.

  • STS_114_2020

    January 2020 Supreme Court of Spain ruling, on the question of whether (or not) a de-facto ‘Community of Owners’ exists in law; obviously, it applies only to the specific case, but the judgement contains interesting argumentation.

  • STS_3624_2020

    Describes the criteria for setting participation quotas, as per Article 5 of the LPH. Confirms that not only the useful surface of each unit should be considered (in relation to the total property): but also its interior or exterior location; its situation; and the use that is rationally presumed to be made of the services or common elements.

  • STS_350_2023

    This (February 2023) ruling by the Supreme Court of Spain stipulates that any prohibition on the use of swimming costumes in swimming pools which are in co-ownership is illegal (constituting a violation of fundamental rights).

  • Complejos inmobiliarios privados: ¿agrupación registral previa?

    Discussion on Article 24 of the Horizontal Property Law: specifically, how the application of Article 24 LPH can give autonomy to each building/block for decisions exclusive to it (e.g. maintaining the facade), whilst remaining integral to a wider community, in the form of a “Group of Communities of Owners”.

  • Ley 49/1960, de 21 de julio, sobre propiedad horizontal.

    The main legislation of Spain which governs how Communities of Owners must operate, in conjunction with Article 396 of the Civil Code

  • Ley 10/2005, de 31 de mayo, de Fundaciones de la Comunidad Autónoma de Andalucía.

    The law regulating Charitable Foundations in Andalusia, which could govern an entity (for example, a “Friends of Costa Natura” foundation) created for the purpose of protecting the cultural and historical status of Costa Natura as a naturist community.

  • Ley 14/2007, de 26 de noviembre, del Patrimonio Histórico de Andalucía.

    Legislation to guide an application to the Government of Andalusia for the purpose of safeguarding Costa Natura as a place of special cultural and historical importance.

  • Ley 4/2006, de 23 de junio, de Asociaciones de Andalucía.

    Article 2.2: “The profits obtained by associations derived from the exercise of economic activities, including the provision of services, must be used exclusively for the fulfillment of their purposes, without in any case being distributed among the associates, or between their spouses or persons with a similar relationship of cohabitation, or between their relatives, nor their free transfer to natural or legal persons with lucrative interest.”