Section 22 Commonhold liabilities

1) The commonhold shall be liable for all its assets for any debts to third parties. In addition, the creditor may claim from every owner who was party to the corresponding process, for the payment of his/her percentage of the amount left unsatisfied, having served a request for payment on such owners.

 

(2) Any owner may oppose execution if he/she accredits that all debts due to the commonhold are fully settled at the moment the request for payment mentioned in the preceding subsection.

 

 

22.1 The extent

 

The ruling of CA in Alicante 20-10-2004 dealt with the construction of section 22, holding that although a commonhold has no strict legal personality it may be a debtor in two circumstances:

 

i. For usual services such gas or electricity and for repairs or maintenance.

 

ii. For damages caused to third party or even to commonholders. Section 1.907 of the Civil Code

 

In order to protect the owners, the law provides that any action in tort or contract arising out of acts or omissions of the commonhold as a whole must be brought against the commonhold association and not against the individual commonholders.

 

By not allowing the unit-holders to be named, each is responsible only for the portion of the judgement that represents their allocated share. This eliminates joint and several liability; a situation where one commonholder can be liable for the entire judgement. The law also provides that a unit-holder is not precluded from bringing an action in tort or contract against the commonhold solely because he or she is an owner.

 

22.2 Procedure

 

Where a third party is declared creditor of a commonhold, at trial the judge through an attachment execution shall seek the assets of the commonhold according to a specific order. Under r. 592 of CPR

 

1. Money from bank accounts of the commonhold as well as the reserve fund.

2. Future monies (service charges) deposited by commonholders in those accounts. In accordance with r. 606 (1) of the CPR there are some unattachable credits such as those for the lifts maintenance, electricity from lifts and common halls stairs.

 

22.3 Commonholders liabilities

 

If it is impossible to recover the debt via the usual procedures outlined above,  That means that the creditor has used up all the commonhold assets, the creditor can seek to seize commonholders’ private assets. It is very difficult to do so however because the creditor has been granted with a future seizure on the future commonholders’ payments.

In order to achieve any attachment on private commonholders’ assets it would be mandatory to sue not only the commonhold but also all the commonholders in the same lawsuit . SC 13-02-2001 CA ruling in Pontevedra 16-07-2002 CA ruling in Barcelona 26-07-2007 CA ruling in Seville 11-02-2005.

The CA ruling in Valencia 24-05-2004 went beyond this and required previous debtor’s default’s notice to be made to each commonholder by the creditor.

Other Courts,CA ruling in Barcelona 22-05-2002 and CA ruling in Zaragoza 12-05-2006,   have taken a more flexible approach, considering no necessary the requirement of suing every commonholder.

This section is brief and not illuminating.

It seems that it is conceived for a particular supplier who has been contracted for a specific purpose.

Previously the Owners’ Committee has to have passed a resolution approving carrying out that service so there was a special levy in order to cover that non-general expense.

Should every commonholder has paid there will be no trouble for the contractor, but if any of the commonholders do not pay the others who do pay may oppose execution. In case of seizure of any commonholder’s private assets, the amount attached shall be only for the part of the total debt relevant to the individual owner. CA ruling in Zaragoza 02-11-2005 and CA ruling in Navarra 10-10-2001