Community fees are funds allocated to ensure that both the building and the common areas are maintained in optimal condition for all residents.
Before addressing what community fees typically include, it is important to understand that there are different types of expenses that a community can assume. Ordinary expenses are those that recur on a monthly or annual basis and are related to the regular operation of the building or residential complex, such as the maintenance of common services or concierge staff. On the other hand, extraordinary expenses include those that arise from specific needs, such as major repairs or renovations that had not been foreseen. The correct classification and management of these types of expenses is essential to ensure that each neighbor contributes fairly and proportionally according to the agreed regulations.
What do community fees typically include?
Each homeowners association may have different expenses, but they are generally quite similar, especially regarding ordinary ones.
Below, we look at an example of community fees and what this amount includes in most cases:
Most common ordinary community fees:
- Maintenance of basic services (electricity, water).
- Maintenance of cleaning expenses.
- Maintenance of bank charges.
- Community management fee.
- Concierge service.
- Swimming pool maintenance.
- Maintenance of gardens and common areas.
- Maintenance and services linked to the elevator.
- Maintenance of boilers, pipes, and other installations.
- Conservation works required for the operation of the community.
- Reserve fund agreed upon among the neighbors; the minimum is 10% of the last ordinary budget.
How are community fees calculated?
Community fees are totaled and distributed among the properties that form part of the homeowners' association. However, the methods for calculating this expense per property can be agreed upon differently in each community.
Current legislation distinguishes between participation quota and ownership coefficient, two concepts that influence how these expenses are shared:
- Participation quota: implies a percentage distribution of expenses based on the value of the property, its location, its situation, the use of common elements, and also the ownership coefficient.
- Ownership coefficient: is the value based on the useful surface area of a flat or premises, in relation to the total surface area of the building.
The distribution of expenses per household can be uniform among all neighbors (called a linear or equalitarian fee) or based on these ownership coefficient and participation quota values. In some homeowners' associations, a different amount is also established for commercial premises, or they may even be excluded from some expenses.
Who is responsible for paying community fees?
According to Article 9.1 e of the Horizontal Property Law, the owner of a property is responsible for paying their corresponding share of the community fees.
Tax measures favoring investment in works that improve the energy efficiency or accessibility of a building through specific deductions are also common. Indeed, expenses generated by the homeowners' association, such as gardening, porter, and administration services, are tax-deductible from income.
Consequences of not paying community fees
In the event of not making the community fee payments, you could:
- Be claimed judicially or extrajudicially to comply with the obligations set out in the law.
- Be unable to vote in successive homeowners' meetings
- The defaulting owner may attend with the right to speak, but not to vote.
Frequently asked questions about community fees
Is it possible to challenge a community fee?
Owners can agree at any time to change the participation in community fees.
First, the change must be approved by a unanimous vote at the homeowners' meeting.
Subsequently, the new community fee is defined in the statutes and recorded in the Land Registry.
What happens if works are carried out on the building, how do they affect community fees?
Works on the building correspond to extraordinary expenses. They are approved as a supplement to the ordinary community fee.
Depending on the type of work to be carried out, the voting process requires a different majority. Once this expense is approved, the percentage distribution of responsibility for each owner can be handled in the same way as with ordinary expenses or with other types of valuations, depending on the type of work to be performed, how it affects each property and, of course, with the agreement of the community.
The collection of this expense can be linked to the ordinary fee or handled separately, in installments negotiated according to the requirements of each work.
How can community fees be reduced?
One of the key objectives regarding community fees is to reduce them as much as possible. There are several strategies that can help achieve this goal:
- Modify ordinary services to obtain optimal service at a better price.
- Invest in energy efficiency.
- Unsubscribe from non-essential services.
- Have an effective property manager to help optimize these community expenses.