Section 14 Powers of the Owners’ Committee
The functions of the Owners’ Committee shall be:
(a) To appoint and to remove persons for the aforementioned offices in the previous section and to deal with any claims presented by owners against the performance of their functions.
(b) To approve the budget of foreseeable expenses and income and the corresponding accounts.
(c) To approve estimates and authorise all repair works to be performed on the property, whether ordinary or extraordinary, and to be informed of any urgent measures adopted by the administrator in accordance with the terms of section 20 (c)
(d) To approve or amend the Articles and establish the internal rules.
(e) To inquire into and resolve on the other matters of general interest to the commonhold, adopting those measures deemed necessary or advisable for the best common service .
14.1 Owners’ Committee
It is the supreme instance of the commonhold formed by all the owners although strictu sensu it is not a legal entity because it does not have legal personality.
The ultimate control of the affairs of the commonhold is through the commonholders in the meetings.
There is a transitional period between registration of commonhold land without unit-holders, and the date upon which the land attracts the first person who becomes a unit holder. During that period, the Owners’ Committee is not operative.
14.2 Delegation of functions
Delegation of Owners’ Committee functions, specified in section 14, to other bodies are not permitted so any provision in the Articles in which the powers of the Committee were restricted or in which the functions were devolved shall be deemed as of no effect and therefore void.
14.3 Restriction of the Owners’ Committee functions
It is not allowed to restrict the power of the OC establishing rules in the title or in the Articles inconsistent with the provisions made by this section 14 which provides the compulsory functions of the Committee.
14.4.1 Regarding the commonhold offices
The majority required to appoint these offices is established in section 17 (3) as ordinary resolution either in ordinary or extraordinary meeting whereas the removal demands extraordinary meeting and the inclusion in the agenda.
It must be highlighted some case law which deals with administrators acting in excess of their powers diminishing those of the Owners’ Committee.
i. Court of Appeal ruling in Madrid 25-05-07 held that the contract resolution of an administrator is competence of the Committee.
It is insufficient to send a telegram from the president to the administrator without approval of the OC.
ii. CA in Las Palmas 27-05-2005 ruled that a commonhold was not bound by an agreement between president and administrator due to lack of a resolution adopted by the OC approving the appointment of the administrator.
iii. Court of Appeal in Salamanca 21-09-98 held that the administrator cannot authorize carrying works in common parts because it is a faculty of the Committee in pursuance of section 13 (3).
14.4.2 Regarding economic matters
The Owners’ Committee must meet once a year in order to approve the commonhold accounts in pursuance of section 16 (1) and ‘the budget of foreseeable expenses and income’ .
In respect of the resolution passing the accounts of the commonhold, it will not be possible to request the financial documentation of the commonhold without the previous impugnation of the agreement in which the accounts were approved. CA ruling in Madrid 10-06-2008
It is also a competence of the OC to determine if an owner is in default. CA ruling in Madrid 17-01-2006
It must be brought up here the difference between ordinary an extraordinary expense. It can be considered extraordinary those provided in section 14 (c) whereas section 14 (b) and 20 (b) deal with ordinary expense.
Some courts hold that a commonholder cannot request the commonhold’s financial documentation of the previous year if the accounts of that year had been approved and were not contested at the court by the commonholder. CA ruling in Alicante 21-12-2000
14.4.3 Regarding the Articles and internal rules
14.4.4 Duties not provided in section 14
Among others these include:
• Section 7 (2) stipulates that the OC has to authorise presidents in order to bring the action of cessation against owners who carry out banned activities.
• Section 8 requires for sub-division of units the approval of the Owners’ Committee.
• Section 9 (1) (e) entitles committees to allocate the commonhold’s percentage of contribution where is not provided in the title.
• Section 12 requires unanimous agreement for ‘the construction of new floors and any other alteration to the structure or the supporting walls of the building or common parts.’
• Section 21 (1) provides that the Committee may require owners to fulfil ‘in the time and form determined’ the obligations referred to in paragraphs (e) and (f) of section 9. SC 08-07-1998, 07-12-1999 and 14/10/2004
14.5 Individual claims by unit owners
May any commonholder defend his own interests or/ and the interests of the commonhold regardless of the commonhold governing bodies? The Supreme Court has declared that any commonholder is entitled to claim at court for the benefit of the commonhold .
Not all the courts take this approach and some of them deny this faculty.