Section 13 Governing bodies in the commonhold

(1) The governing bodies of the commonhold shall be the following:

 

a) The Owners’ Committee.

 

b) The president and, where applicable, the vice-president.

 

c) The secretary.

 

d) The administrator.

 

The Articles of the commonhold association or a majority resolution from the Owners’ Committee may establish other governing bodies of the commonhold, but only insofar as this does not entail any impairment whatsoever of the roles and duties regard to third parties that this Act confers to the aforementioned.

 

(2) The president shall be appointed from among the owners by election or, if this could not be achieved, by rotation or drawing lots. Acceptance shall be compulsory, although the owner designated may request the court to relieve him within one month of taking office, invoking the reasons for it.

 

The judge, following the procedure laid down in section 17 (7), shall rule on the matter, designating in the same order, the owner who shall replace the president in office until such time as a new appointment is made within the term determined in the court’s resolution. Likewise, the judge may be approached where, for any reason whatsoever, the Owners’ Committee found impossible to appoint a president.

 

(3) The president shall legally represent the commonhold both in and out of court in all matters affecting it.

 

(4) The existence of vice-presidents shall be optional. They shall be designated by the same procedure set forth for the appointment of the president. The vice-president, or vice-presidents in the order prescribed, shall replace the president in cases of absence, vacancy or incapacity, and assist him/her in the exercise of his/her duties under the terms established by the Owner’s Committee.

 

(5) The functions of secretary and administrator shall be exercised by the president of the commonhold except when the Articles, or the Owners’ Committee by majority vote, provide that such offices be held separately from the president.

 

(6) The office of secretary and that of administrator may be held by the same person or by persons appointed separately. The position of administrator and, where applicable, that of secretary-administrator may be occupied by any owner, or by individuals with adequate professional qualification and legally licensed to perform such functions. It may also be held by a corporation or other juristic person in the terms set out by law.

 

(7) The term of office for all governing bodies of the commonhold shall be of one year unless otherwise stated by the Articles. The persons appointed may be removed from their posts before the expiration of their term of office by a resolution of the Owners’ Committee, convoked for an extraordinary meeting.

 

(8) Where the number of owners in a building does not exceed four, they may opt for the administration system provided for in section 398 of the Civil Code if so prescribed by the Articles .

 

 

 

If the first meeting of the commonhold has not already taken place, it is likely that the developer will have appointed the officers. At the first meeting, these appointments could be confirmed or one or more of the owners may wish to be appointed as officer to represent the interest of the commonhold.

 

13.1 Owners’ Committee

 

The board of owners is dealt with in section 14

 

13.2 President

 

13.2.1 Who may be president?

 

The president shall be designated only from among the unit-holders. Without prejudice of this rule, where a non-owner is appointed as president, any unit-holder could contest the resolution in which a non-owner is appointed.

Problems arise when this kind of president has to act on behalf of the commonhold at court; in those cases the other party could argue the lack of legal representation under this section. This was the approach held by the SC in judgements of 14-10-2008 and 18-03-2003.

The Supreme Court  in its rulings of SC 13-07-2006 and 30-06-2005 added that resolutions adopted by the OC appointing a president who is not an owner are null and void so it is not subject to any term to contest them at Court.

In regard of resolutions adopted in meetings in which the president is not an owner, courts do not agree whether they are null and void or simply avoidable. In the first case, the resolution was never valid in law, whereas in the latter the resolution will stand unless it is voided or reversed. Another difference between them is related with the term to contest; nullity has no term whereas voidability has two terms established in section 18; three months or ‘one year in the case of resolutions contrary to the law or against the Articles

 

i. The avoidable approach was held by the CA ruling in Guipuzcoa 24-11-2004 and CA ruling in Asturias 29-12-2006, CA ruling in Valencia 26-02-2007, CA ruling in Pontevedra 31-07-2008 and CA ruling in Madrid 21-04-2008. These courts held that those resolutions in which a non-owner is appointed as president necessarily must be challenged within one year under section 18 (3) of the Act, otherwise the resolution will be cured as well as those others adopted by the OC under this allegedly president. CA ruling in Sta. Cruz de Tenerife 08-02-2006

 

ii. The nullity doctrine was implemented by the Supreme Court judgements above mentioned and by the CA ruling in Valladolid 06-05-2004 and the CA ruling in Barcelona 20-09-2004.

 

It is not allowed to appoint a tenant or usufructuary although the latter is entitled to attend and vote at the Owners’ Committee under the third paragraph of section 15 (1)

 

That usufructuary’s right can be exercised solely on ordinary matters, needing a specific empowerment in order to vote on any non-ordinary matter. It is not necessary that the president has registered his property at the Land Registry in order to become president. CA ruling in Caceres 27-12-2000

 

Where the property is jointly owned by the spouses, any one of them could be nominated as president.

This rule is also applicable to other proindiviso ownership regardless of the legal nature of the relationship between the co-owners. Where a body corporate, usually a company, owns a property in the commonhold its legal representative would be fit to hold the office. CA ruling in Asturias 10-04-2003 CA ruling in Malaga 08-03-2006 and 02-04-2008.

It is not mandatory that the president attend the meeting in which is appointed.

 

13.2.2 Resignation from office

 

This measure is only provided for election of presidents by rotation or drawing lots. Since the Act was amended in 1999, for first time it is compulsory to exercise the office although it is possible to apply in court for resignation within a month, until the court decides the office shall be held by the applicant.

If the Committee refused the resignation it will be the court who decides, within 20 days, through a specific proceedings called ‘of equity’ which is not strictly a kind of procedure but the particular criteria used by the judge to resolve, allowing the judge in certain cases to do what they think is fair.

In that case the judge shall appoint a new president who will hold the office until a new one is appointed by the usual procedure established in the Act. In any case the court directs the commonhold to hold an extraordinary meeting.

Some reasons, amongst others to resign from the office of president might be physical or mental deficiencies or when the commonhold is not the usual place of residence, even ignorance of the language could be deemed as a fair cause to resign.

Sometimes, some terms of the Articles exclude certain owners from the office of president on the ground of personal circumstances such as the non-residence in the commonhold or to be a retired, nevertheless under section 14 of the Spanish Constitution these kinds of covenants are discriminatory and could be voided by any Court. CA ruling in Valladolid 02-12-2004 did not consider normal illness as a valid excuse

 

13.2.3 Equity procedure 

 

Section 3 (2) of the Spanish Civil Code provides that ‘the equity shall be pondered in the application of the law although judgements only may exclusively be based in that principle when the law expressly allows it’.

 

Normally such principle must be embraced by courts when giving judgement but sometimes when the judge has no legal provision about the matter, it is allowed to rule basing on the balance of interests in a reasonable and discretionary way.

The equity procedure shall be construed as a crucial remedy in order to avoid blocks in the normal ongoing of the commonhold.

Thus, this procedure is provided by the Act where it is impossible to reach an agreement for the president’s appointment or where the president appointed wants to resign from the office.

As it is stated in section 17 (3) it is also allowed to turn to this procedure where a majority cannot be reached by the rules provided for in section 17.

 

13.2.4 Presidents’ resignation from office

 

13.2.4.1 Requirements

 

i. The appointment of the president should have been done by rotation or by drawing lots.

 

ii. Application should be submitted within one month since taking office.

 

iii. The applicant shall invoke the reasons for resignation.

 

13.2.4.2 Jurisdictional authority

 

County Courts, with jurisdiction in the district where the commonhold is located are in charge of dealing with these issues. It is neither necessary to hire a solicitor nor any other legal representative in this kind of proceedings.

 

13.2.4.3 Documentation for the application

 

A copy of the minute stating the appointment agreement and a list of all the owners must be enclosed in order to facilitate another provisional appointment by the judge as well as any document which supports the arguments such as medical certificates. Both president and / or commonhold may bear court costs at the discretion of the judge.

 

13.2.4.4 Defendants

 

As this procedure is provided when the appointment was done by rotation or drawing lots, the defendants might be the owners who refuse the reasons given by the one who wanted to resign.

 

13.2.4.5 Evidential stage

 

At this stage defendants and claimant shall submit evidence to prove the facts on which their claims and defences are based.

 

13.2.4.6 The ruling

 

The judge shall give judgment within 20 days from the submission of the claim :

 

a. Considering the resignation reasons as justified. Another provisional president shall be appointed by the judge in that very judgement. The office must be held by the provisional one until a new meeting of the OC is held and new elections are conducted.

 

b. Considering the resignation reasons as not justified thus the applicant shall continue to hold the office.

 

Appeal is not allowed in these kind of proceedings based in equity so the judgement shall be unappealable although legal principles underlying case-law are not unanimous and in some cases high courts might accept to review the judgment passed by the first instance courts.

 

13.2.5 Rules for the appointment and election of presidents

 

As it is stated in section 14 (a), the OC shall appoint and remove the governing bodies of the commonhold. The rules for the appointment of the presidents are set out in section 17 (7) which requires only an ordinary resolution. CA ruling in Cantabria 08-11-2004

 

The presidents’ appointment must be included in the notice of meetings, either ordinary or extraordinary, as an issue in the agenda.

 

13.2.5.1 Rotation and drawing lots

 

It is not rare to find the rotation system implemented in most of commonholds in Spain. Perhaps because of a lack of owners’ interest in fighting for a non remunerated office which is sometimes just another big headache in their lives. Those systems may be established either by ordinary resolution passed by the OC or provided by the Articles.

Likewise, it is possible to change the system from rotation or drawing lots to election at any time.

 

13.2.5.2 Appointment by judge The very last solution, under the provisions of the equity procedure.

 

13.2.6 Term of office

 

As with other offices of the commonhold the appointment shall be for one year notwithstanding that any other provision of the Articles setting forth other terms, or even a resolution of the Owners’ Committee may establish a different period of time; longer or shorter. In order to avoid a power loophole, even beyond the term the president must hold the office until a new one is appointed. CA ruling in Madrid 03-04-1995

 

13.2.6.1 Delayed election

 

If the president is delaying the call for the meeting of the OC in which the election of a new one should be voted, one quarter of the owners or a number representing, at least, 25 percent of the whole commonhold allocations may call for a meeting as per section 16 (1).

 

13.2.7 President’s removal

 

The office of president may be vacated before the end of the term by the OC through an ordinary resolution under section 17 (7).

 

It shall not be necessary to allege any reason to remove a president. CA ruling in Madrid 25-02-1999  The office shall also be vacated if having been an owner when appointed a president; he or she ceases to be an owner by any reason.

 

13.2.8 President’s renewal

 

There is nothing stopping a president from being confirmed in his/her office for another period of time but that renewal must be done according to the rules laid down in section 17.

As was stated in CA ruling in Madrid 08-06-2006 the former president is obliged to deliver to the new one all the documents related to the running of the commonhold.

 

13.2.9 Legal and organic empowerment

 

a. Legal representation:

 

The president is the legal representative because the law grants his/her powers. That means that prior resolution of the OC is not required to act on behalf of the commonhold.

 

b. Organic representation: Where the president is acting on the commonhold’s behalf in a business or legal matter, even the future owners or those who voted against the resolution in the meeting will be legally bound by the acts of the president even if they were illegal.

There are some limits in this empowerment, in particular those related to the functions of the OC that cannot be assumed by the president.

 

13.2.9.1 The president and third parties.

 

Case law Most of the cases deal with those situations in which the president signs an agreement without the previous or subsequent authorization of the OC.

As a general rule, the president does not have the power on behalf of the commonhold to appoint and enter freely into contracts with third parties.

 

The CA ruling in Las Palmas 16-02-2004, considered of no effect a rental agreement, by which a mobile phone mast was installed on the roof,  signed by the president without a resolution of the Owners’ Committee.

The same court took a same approach on another decision on 27-05-2005 but this time in respect of a president’s decision in which a new administrator was hired.

The CA ruling in Asturias 26-04-2005 in regard of contracting a lawyer applied the same rule of no effect. Other courts grant more power to the president though. CA ruling in Cantabria 19-05-2005.

Those third parties dealing with the president only have to check if he or she actually is the president.

They do not need to require any authorization of the OC as a result of the application of the good faith principle which protects third parties interests when they are trading.

By virtue of that principle it will not be possible to void any contract signed by the president on the ground that he or she exceeded the authority conferred by his or her office. In such cases the president could only be held accountable to the OC for what he or she has signed.

It is important to stress that the president does not have the resolution powers conferred to the OC.

For example, if an owner wanted to build a conservatory and requests authorization from the president, and he or she nodded, that does not mean that the owner is entitled to build, since the approval of a resolution by the OC is required in that case.

Presidents in these cases are merely recipients of requests under the terms established in section 7 (1). CA ruling in Madrid 12-09-2000 and SC 13-02-1995

The OC may avoid this by ensuring that the president acts within their own spheres of responsibility, and pass on queries outside their spheres to the OC.

The CA ruling in Girona 20-02-2006 annulled the authorization granted by the president to a unit holder for the installation of an air conditioning unit in a common area and the CA in Santa Cruz de Tenerife in respect of glazing a terrace took the same approach. Sometimes the president signs agreements binding commonholds for a term which is beyond their offices. Those contracts shall be also of no effect.

 

13.2.9.2 Compulsory resolution authorizing president to go to Court

 

Great controversy between courts has been generated in respect of whether it is mandatory to have the express and prior authorization of the OC in order to bring an action. The CA ruling in Logroño 29-12-2006 held that the president has no free rein to choose whatever course of action he wants.

The CA ruling in Pontevedra 26-06-2006 and CA ruling in Ourense 25-05-2006 and CA ruling in Madrid 14-09-2002 were contrary to limit the president’s powers.

More practical was the CA ruling in Alicante 19-05-2005 claiming that president cannot act against resolutions of the OC when is representing the commonhold at court. Lastly the Supreme Court has passed judgements in this matter. Although the Act only requires express authorization in case of legal action against prohibited activities established in subsection 7 (2) and the action for recovery of overdue fees (s. 21) in the other cases it is also required ( SC 659/2013, and SC 622/2015)

Where the president has no permit to act in court granted by the Owners’ Committee the other part in trial could argue lack of representation.

 

13.2.9.3 Accreditation of the president’s office In some cases it is necessary to accredit the office of president to certain public or private bodies, such accreditation could be done through two ways:

 

i. Notary’s certificate of the minutes.

 

ii. Secretary certificate with notary assertion.

 

13.2.9.4 Conflicts arising between the interests of presidents and those of the Owners’ Committee

 

The president shall exercise his or her powers so as to permit or facilitate so far as possible the exercise by each commonholder of his or her rights and the enjoyment by each owner of the freehold estate in his unit. If the president was against a resolution whether or not he would have voted against it, he could not prevent commonhold from executing the decision.

The administrator shall execute the resolution even with the opposition of the president. However, as any owner, he is entitled to challenge resolutions in court. It also could occur that the president voted against a resolution and another owner who voted against also wants to challenge the resolution. In that case and in order to prevent the conflict of interests between the president and those owners who voted in favour of the resolution the president shall not be able to represent the commonhold at court.

Likewise, if it is the president who challenged the resolution, any of the other offices mentioned in section 16 (1) would be the representatives of the commonhold at court.

 

13.2.10 Functions

 

i. To summon ordinary meetings of the OC at least once a year.

 

ii. To summon extraordinary meetings when he or she finds it necessary.

 

iii. To chair the meetings of the OC supervising its running.

 

iv. To acknowledge requests from the owners addressing them to the OC, in particular those issues stemmed from section 7 (1).

 

v. To prepare and bring court actions representing the commonhold demanding commonholders to cease in their actions in accordance with section 7 (2).

 

vi. To warn owners of breaches in their duties ensuring that all commonholders observe their obligations towards the commonhold as a whole and in relation to other owners in particular.

The president shall, in particular, use any right, power or procedure conferred by virtue of the Act for the purpose of preventing, remedying or curtailing a failure on the part of a commonholder to comply with a requirement or duty imposed on him by virtue of the title or a provision of the Act.

 

vii. To sign agreements with providers or suppliers provided that the Owners’ Committee has decided so in pursuance of section 14 (e).

The CA ruling in Cordoba 09-09-2003 held that the president is obliged to provide any information and documentation as regards of the commonhold’s running. Thus, there is right conferred on the commonholders to inspect the book and records of the commonhold.

 

13.2.11 Extent of liability

 

Presidents will be subject to the duties and obligations imposed by the law, they are also given particular rights and responsibilities, commonholders who assume the role as presidents will therefore need to acquaint themselves with their responsibilities and be advised accordingly.

If a president has breached his duties with intent or gross negligence, he is liable to compensate commonhold for damages incurred as a result of such breach. However, the president cannot be made liable for the administrator’s duties.

 

There are basically two ways in which law imposes liability on presidents. Firstly sections 1101-1104 and 1902 of the Civil Code impose civil liabilities on presidents. Secondly, under criminal law, presidents face personal liability for offences. For instance, where they misappropriate commonhold’s funds.

 

The OC or the administrator on its behalf may sue the president by exercising the commonhold’s rights bearing in mind that courts are reluctant to bring accountability to an unpaid office. Prior litigation, a resolution of the OC must be passed in order to bring the claim as well as to remove the president.

 

Most of the case law in which courts hold liability of presidents are those in which the office of administrator are held simultaneously with the president’s office. Among others:

 

• Delivering a bearer cheque to the wrong person. CA ruling in Leon 10-04-2000.

• Signing agreements without the consent of the OC and without its subsequent ratification. CA ruling in Palencia 03-05-1999

• Delay in the payment of caretaker’s national insurance and as a consequence extra-charges paid by all the commonholders. CA ruling in Almeria 03-11-1976

• CA ruling in Asturias 26-04-2005 held that hiring a lawyer without the subsequent consent of the Owners’ Committee exceeded the powers conferred. In some cases courts hold that no liability could be attributed to presidents.

For instance, carrying out works which have not been passed by the OC, but with tacit consent or signing an agreement without the prior consent of the OC but subsequently not impugned. CA ruling in Cadiz 06-10-2003 and CA ruling in Madrid 23-06-2004

 

13.2.12 Remuneration and president’s expenses

 

Presidents are not normally remunerated; however, the OC can resolve to consent to remuneration by ordinary resolution specifying the amount to be paid. CA ruling in Malaga 16-01-2007

The president may be paid all expenses reasonably and properly incurred by him in connection with his office. This will require the prior or subsequent approval by the OC.

Although discharging the commonhold charges may be deemed as remuneration, it must be specified so in the title or in the Articles.

CA ruling in Malaga 19-06-2006 annulled an ordinary resolution passed by the Committee of a commonhold in which there was no reference to that privilege in its Articles. The CA ruling in Granada 09-06-2006 demanded unanimous consent for the implementation of this advantage.

 

13.3 Vice president/s

 

It is an optional body and it may be provided either in the Articles or through a unanimous resolution from the OC.

 

13.3.1 Functions

 

i. As alternate presidents they will replace presidents in cases of absence, vacancy or incapacity.

 

ii. Assistance to presidents.

 

13.3.2 Appointment and accreditation of the vice president/s

 

The Act establishes the same procedure set forth for the appointment of the president. Regarding the accreditation it could be deemed as enough the letter from the president to the vice-president in which is contained the concurrence of the circumstance which caused the temporary replacement.

 

13.4 Secretary

 

13.4.1 Who may hold the office of secretary?

 

The president shall hold the office of secretary in principle ‘except when the Articles, or the OC by majority vote, provide that such offices be held separately from the president.’ The offices of administrator and secretary may be held by the same person or separately.

As with the office of administrator, a secretary need not be an owner.

Unlike the office of president which is compulsory, secretaries could resign at any time giving notice and calling for a meeting in which a new secretary shall be appointed.

 

13.4.2 Functions

 

i. To certify resolutions adopted by the Owners’ Committee regarding the authorization to bring the action for cessation in application of s. 7 (2).

 

ii. To certify resolutions adopted by the OC regarding the approval of the debt settlement due to the commonhold by overdue owners in order to initiate an order for payment procedure and to collect debts in accordance with section 21.

 

iv. To certify the state of the balance with the commonhold of any property before it is transferred in compliance with the provisions of s. 9 (1) (e).

 

v. To acknowledge comonholders’ notice regarding his or her domicile in Spain for the purpose of receiving summons or communication of any kind related to the commonhold in pursuance of section 9 (1) (h).

 

vi. To acknowledge owners’ notice when any property is going to be transferred in application of section 9 (1) (i).

 

vii. To carry out summons or notices to the owners keeping with s. 9(1) (h).

 

viii. To cause minutes of each meeting of the OC to be recorded and preserved under section 19.

 

ix. To acknowledge the dissenting votes from absent owners under the provisions set forth in section 17

 

x. To take custody of the OC minutes book and conserve the summons for meetings, notices given, proxy-forms and other relevant documents during a five-year period in compliance with section 19 (4). 13.5 Administrator (Estate Manager)

 

13.5.1 Who may hold the office of administrator?

 

As with the office of secretary, the president shall hold the office of administrator, in principle, ‘except when the Articles, or the Owners’ Committee by majority vote, provide that such offices be held separately from the president.

That means that one individual, owner or not, or a corporate body may hold the office of administrator and secretary simultaneously. Where the office of administrator is held separately from the president’s office, either an owner or a non-owner may hold the office. If the OC appoints a non- owner as administrator either an individual or a corporate may be vested in the office of administrator.

 

13.5.2 Requirements applicable to individuals who hold the office of administrator

 

Where the administrator is not an owner, the Act sets out the requirement to have an ‘adequate professional qualification and legally licensed’ it is referring to a special profession known as estate manager regulated in the Decree 693/1968. It is not clear whether administrators have to belong to the official association bar in order to act as estate managers.

Two different approaches haven been held; the first one is held by those courts who don’t consider it necessary that administrators are members of their professional association , the second one claim that the Act is clear when it is demanding ‘legally licensed’, therefore administrators are required to be licensed. CA ruling in Cádiz 23-03-2006 CA ruling in Valladolid 06-07-2004 and CA ruling in Barcelona 04-05-2004. CA ruling in Madrid 20-09-2006

 

13.5.3 Requirements applicable to corporate persons

 

There are no legal requirements for the corporate bodies but their presidents must be fully qualified as the individuals under the terms specified in the above mentioned regulations.CA ruling in Alicante 12-03-2008

 

13.5.4 Appointment

 

The administrator must be appointed by the OC, or if he or she was appointed previously by the developer then the Committee must confirm the resolution in a meeting under the provisions set forth in section 14 (1).

If the administrator was appointed by the president without the authorization or post-confirmation of the OC he could be removed by the Committee at any time. CA ruling in Málaga 04-05-2006 CA ruling in Las Palmas 27-05-2005

 

Bodies corporate or individuals qualified holding the office of administrator cannot take advantage of the bona fide principle which protects third party against presidents acting without the required authorization because they are professionals hired by the commonhold who are perfectly aware about commonhold law. That means that they can be removed without any indemnity.

This approach was not held by CA ruling in Madrid 05-03-2008 though. Usually developers appoint the first administrator; in that case the OC has to confirm it in the first meeting. The appointment requires the ordinary resolution provided in section 17 (7) whereas unanimous agreement must be reach where the term of the office lasts more than one year.

 

13.5.5 Liabilities

 

The administrator is obligated to exercise a level of care, as is reasonable in all the circumstances, to avoid harm to the commonhold. Contracts between commonhold and professional administrators should specify the duties on each of the parties and the remedy if these duties are breached. Upon entering into a contract, the parties obtain specific rights and certain duties although the administrator’s liability will only arise if the action breaches any of the duties and causes a loss or harm to the commonhold which would have been reasonably foreseeable in all the facts and circumstances of the case. In order to hire an administrator it is always sensible to check the insurance which covers his activity.

From a legal point of view, the legal relation between the administrator and the commonhold shall be construed according to the Chapter IX of the Civil Code which refers to the mandate or agency agreement. In accordance with the section 1.726 of the above mentioned Code ‘the agent is liable not only for deceit or malice but for his negligence which shall be estimated by the courts with more or less severity depending on whether the agency was or not remunerated.

 

A Commonhold in which it had been agreed to repair the front, once requested the building permission and applied for a public subsidy, the administrator hired by the commonhold did not apply in time so the term expired. For this reason the owners sued him, and the CA ruling in Madrid 26-02-2007, condemned him to pay to the commonhold 12.000 Euros, an amount similar to the subsidy that they had expected to have received.

The administrator alleged that he was only in charge of the collection of receipts and of carrying out administrative and countable tasks.

 

Nevertheless, the Court demonstrated that it was not like that because the content of the Minutes’ Book revealed the existence of a contract in which it was established a monthly fee was paid so it was her duty to apply for the subsidy because he was a professional who must also care about that kind of issues.

Lack of accounts without any control of payments and expenses for several months was considered a ground to dismiss an administrator without compensation. CA ruling in Asturias 24-10-2002

 

Failing payment of an insurance premium or tax once passed at the Owners’ Committee was deemed as a breach of an overriding duty by the administrator.

 

13.5.6 Functions see Section 20

 

13.5.7 Acting on behalf of the commonhold.

 

Administrators are solely enabled to act on behalf of the commonhold on the assumption set forth in section 21 (1) which refers to the order for payment procedure through which commonholds try to collect owners’ debts in court .

The administrator must have been authorised by the OC before starting proceedings. In this respect, the CA ruling in 29-05-2003 and the CA ruling in Barcelona 13-12-2002 took a wider approach and considered also section 20 (f) in order to extend the powers to be attributed to administrators. CA ruling in Valencia 05-06-2006 Commonhold ratified an agreement signed previously by the administrator

 

13.5.8 Administrator’s dismissal

 

In regard to the nature of the agreement between a non-owner administrator and the commonhold the doctrine is divided.

As said before, some courts, CA ruling in Madrid 13-05-2006 CA ruling in Saragossa 16-06-2003,  claim that it is a mandate contract in accordance with section 1709 onwards of the Civil Code which configures said contract whereas other courts submit that it is a contract for service. CA ruling in Madrid 23-04-2007 SC 09-02-1996

The distinction is important because it is provided in section 1733 of the cited Code that the contract of mandate may be dissolved at will at any time since trust is an essential feature.

That does not mean that the administrator is not entitled to obtain compensation because of the early cancellation as commonhold must indemnify in case of lack of lawful grounds. CA ruling in Alicante 30-01-2008 required that the contract between the commonhold and the administrator has to establish expressly the term. The amount of compensation will be the fees due until the agreement is finished. CA ruling in Malaga 27-02-2001 and 16-03-2004. Other courts reduce the amount to an a half. CA ruling in Alicante 24-09-2008, CA ruling in Madrid 09-07-2004 and CA ruling in Cadiz 22-09-2003

 

Where the administrator breaches his duties or obligations he shall not be entitled to any compensation as well as in the case of adoption of resolutions inconsistent with the Act. CA ruling in Malaga 31-03-2006 and CA ruling in Saragossa 15-03-2006 CA ruling in Madrid 08-05-2007 CA ruling in Saragossa 19-04-2002

The burden of proof is upon the commonhold. It should not be forgotten that subsection (7) makes provision ‘for all governing bodies of the commonhold’ which ‘may be removed from their posts before the expiration of their term of office’ by a resolution of the Owners’ Committee, convoked for an extraordinary meeting.

 

13.5.9 Term of office

 

As other offices of the commonhold the appointment shall be for one year term, without prejudice to other rules provided in the AA or by resolution of the OC.

When it is time to renew but nothing is dealt with in the meeting, the office could be tacitly renovated. CA ruling in Granada 25-02-2004.  

It is perfectly possible and usual to hold the offices of administrator and secretary, simultaneously.

 

13.6 Lack of governing bodies

 

When no governing bodies of the commonhold are designated yet, the provisions established under section 392 et seq. of the Civil Code shall be applicable in order to ensure the proper running of the Commonhold.

CC s. 398. ‘For the administration and better enjoyment of the co-ownership it shall be compulsory the decisions of the owners’ majority. It shall be deemed majority when the decision has been adopted by the co-owners representing the majority of the interests that constitute the object of the co-ownership If there is no majority or the decision is seriously detrimental to the interested parties in the common thing, judge shall provide, at the request of a party, as appropriate, even the appointment of an administrator

 

13.7 Other offices in the commonhold

 

Subsection (1) makes provision for ‘other governing bodies’ limiting their powers in regard with the other offices mentioned. Boards for different purposes, treasurers and vice-secretaries may be created either by ordinary resolution or where it is provided by the Articles.

 

13.8 Mini commonholds

 

Subsection (8) provides a more straightforward system of administration for those commonholds with no more than four units. In order to opt for that system the Articles must provide expressly for this option. In commonholds subject to that special regime, provisions provided in the Act relating to majorities or governing bodies shall not be applied, for instance any owner could represent the commonhold. Other provisions of the Act such as those related to notices or book of minutes may be applied supplementary to these commonholds.