The money of a community of owners sits in a bank account, and the questions an owner abroad asks about it are always the same three: whose name is on it, who can move the money, and how can I see it without flying to Fuerteventura. The Spanish Horizontal Property Act answers them only in part, because it was written before online banking and it never says the words "bank account". It does say who represents the community, who pays and collects, who approves the accounts and who keeps the papers, and from those articles, the tax rules that give the community its own number, and the profession's own code, a short set of rules follows. This note sets them out: the account in the community's name, the signatures, what the administrator may and may not do with it, the three ways the owners check it, the reporting duties the account drags behind it, what happens when the community owes money, and the fraud that moves a supplier's payment to a stranger's account.
The community has a tax number, and the account carries it
A community of owners has no legal personality, but Spanish tax law treats it as a taxpayer all the same: the General Tax Act counts among the obliged las herencias yacentes, comunidades de bienes y demás entidades que, carentes de personalidad jurídica, constituyan una unidad económica o un patrimonio separado susceptibles de imposición, estates pending acceptance, co-ownerships and other entities which, lacking legal personality, form an economic unit or a separate estate capable of taxation (Ley 58/2003, article 35.4). So the community has a tax number of its own, and the order that fixes how those numbers are built reserves a letter for it: H. Comunidades de propietarios en régimen de propiedad horizontal, H for communities of owners under the horizontal property regime (Orden EHA/451/2008, article 3). The NIF that begins with H is the community's, and the bank account that holds the owners' fees is opened with it, in the community's name.
That is the first rule, and the Act supports it from another side. The reserve fund every community must hold, at least 10 % of its last ordinary budget, is defined by the Act as a fund cuya titularidad corresponde a todos los efectos a la comunidad, whose ownership belongs for all purposes to the community (Ley 49/1960, article 9.1.f), and the same article lets the community spend it on a building insurance or a maintenance contract. A fund that belongs to the community for all purposes cannot sit in an account that belongs to somebody else. The same goes for the ordinary fees: when the community is sued for a debt, the Act says it responderá de sus deudas frente a terceros con todos los fondos y créditos a su favor, answers for its debts to third parties with all the funds and credits in its favour, and only after that may a creditor go against each owner for their share (article 22.1). The funds the Act is talking about are the ones in the account.
Some administrators still run a single "administration account" in the firm's name through which the money of several communities passes. The profession's own code of conduct does not name that practice, and we read it looking for the line: what the code does require is that every registered administrator holds insurance for la responsabilidad en la que pueda incurrir con respecto a los fondos, bienes y derechos que les hayan sido depositados o confiados en el ejercicio de su actividad profesional, the liability they may incur in respect of the funds, assets and rights deposited with or entrusted to them in their professional activity, with a certificate of that cover on request (Código Deontológico of the Consejo General de Colegios de Administradores de Fincas, article 6), and that the administrator refrains from receiving commissions or discounts por los gastos comprometidos derivados de la cuenta de un mandante, for the expenses committed from a client's account, without the client's prior consent (article 2.2, rule 3). A pooled account is therefore not forbidden by the code, and it is not what we recommend either: it mixes the community's money with the firm's and with other communities', it makes the handover on a change of administrator a negotiation instead of a signature, and if the firm fails, the community is one creditor among many; it is also one of the warning signs in our note on administrator fees and quotes. Our piece on changing administrator explains what to demand at the handover; the account in the community's name, with the community's NIF, is the first item on that list.
Who signs
The Act gives the community a president who ostentará legalmente la representación de la comunidad, en juicio y fuera de él, en todos los asuntos que la afecten, legally holds the representation of the community, in and out of court, in all matters that affect it (article 13.3), and an administrator whose duties include to efectuar los pagos y realizar los cobros que sean procedentes, make the payments and collect the sums that are due (article 20.1.d). The bank asks who may sign, and the Act does not answer; the meeting does, by an ordinary resolution, because every matter of general interest for the community belongs to it (article 14.e), and the statutes may fix a rule once and for all.
The arrangement we recommend has two layers. The president is a signatory on the account in every case, so that the community's representative can act on its own money and so that the bank knows a person behind the H number who is not the firm. The administrator is a signatory for the ordinary payments the Act entrusts to it, within the budget the meeting approved. For a sum above a threshold the community fixes, a new supplier, or any transfer outside the budget, two signatures are required, the president's and the administrator's, which on an online account means a second approval before the transfer leaves. And the president, and any owner the meeting names, holds a read-only access that shows every movement the day it happens. The threshold and the names are written in the minutes; the bank gets a copy; nobody changes them without a new resolution.
Two things follow from that set-up that owners sometimes resist. The president's signature is work: a resolution the meeting took still needs a person to approve the payment, and a president abroad needs the bank's app to do it from there. And the read-only access is not a vote of no confidence in the administrator; it is the owners seeing their own money, which is what the Act means when it orders the administrator to custodiar a disposición de los titulares la documentación de la comunidad, keep the community's documentation at the owners' disposal (article 20.1.e).
What the administrator may do with it, and what it may not
The administrator pays what the community has decided to pay and collects what is owed. The Act makes it prepare and submit to the meeting el plan de gastos previsibles, proponiendo los medios necesarios para hacer frente a los mismos, the plan of foreseeable expenses, proposing the means needed to meet them (article 20.1.b), execute the works the meeting approved and make the payments and collections that are due (20.1.d), and attend to the upkeep of the building, disponiendo las reparaciones y medidas que resulten urgentes, dando inmediata cuenta de ellas al presidente o, en su caso, a los propietarios, ordering the repairs and measures that are urgent and giving immediate account of them to the president or, as the case may be, to the owners (20.1.c). So the ordinary bills within the budget, the urgent repair and the collection of fees are the administrator's to run; a works contract, a new service, a loan or an extraordinary contribution are the meeting's, and the administrator executes them after the vote, not before. The meeting approves el plan de gastos e ingresos previsibles y las cuentas correspondientes, the plan of foreseeable income and expenses and the corresponding accounts (article 14.b), and until it has, the money in the account is spent only on what the previous budget covers and on what the Act calls urgent.
Three practices sit on top of the Act, and we treat them as part of the service rather than as extras. The fees are collected by direct debit into the community's account, never into the firm's. Every invoice is paid from the community's account to the supplier's account, so that the bank statement and the invoice file tell the same story. And the administrator never holds cash: a cash box in an office is a sum that no statement shows.
Three ways the owners check it
The first is the annual meeting. The Act makes the community meet por lo menos una vez al año para aprobar los presupuestos y cuentas, at least once a year to approve the budgets and accounts (article 16.1), and an owner who wants a question on the agenda sends it to the president in writing and the president los incluirá en el orden del día de la siguiente Junta que se celebre, includes it in the agenda of the next meeting held (article 16.2). The accounts the meeting approves are the year's statement, and our note on reading the annual accounts from abroad explains what to look for in them before the vote. The approval is a decision like any other, by the majority the Act sets for ordinary resolutions (article 17.7), and it is the owners' first control: an unexplained line is a reason to vote against the accounts, not a reason to vote for them with a complaint in the minutes.
The second is the documentation. The administrator keeps it at the owners' disposal (article 20.1.e), and the secretary, who is often the same person, keeps the minute books and conserves durante el plazo de cinco años, las convocatorias, comunicaciones, apoderamientos y demás documentos relevantes de las reuniones, for five years, the notices, communications, proxies and other relevant documents of the meetings (article 19.4). An owner may ask to see the bank statements and the invoices behind the accounts, and an administrator who answers that they are confidential has misread the Act: the money is the owners', and so are the papers. In the communities we administer the statements are published monthly in the owner portal, the same numbers for every owner, and the invoices are filed where the owners can see them.
When the answer is still no, the road is the Act's own before it is the court's, and the Audiencia of Las Palmas has applied that. In December 2016 it heard a cooperative that said it owned a flat in a building in Las Palmas de Gran Canaria and had asked a court, before any lawsuit, to make the community exhibit its minute book, its tax number, its accounts, ledgers and bank statements for 2010 to 2015 and every movement of the community's account since it was formed. The request failed, with costs, for three reasons an owner abroad should read twice: the cooperative had not proved it owned the flat; it had never notified the community of its purchase, as article 9.1.i requires; and the papers it wanted está a disposición de los titulares de la Comunidad de Propietarios pues es obligación del secretario administrador de la Comunidad custodiarla a disposición de estos, are at the disposal of the community's owners because the secretary-administrator must keep them so, which gives an owner who is refused la facultad de pedir la convocatoria de una Junta o que se incluya en el orden del día de una Junta que sea tratado cualquier tema de interés para la Comunidad, the power to ask for a meeting to be called or for any matter of interest to the community to be put on an agenda (Audiencia Provincial de Las Palmas, auto 470/2016 of 14 December, adopting the words of the Audiencia of Seville). The court added that a list of that size was más propia de una auditoría, more fitting for an audit, than for the claim the cooperative said it was preparing. The order is the owners' map: be known to the community, ask the administrator in writing, then the president, then the agenda, and keep the letters; a judge comes last, with the letters in hand.
The third is the audit, which the Act does not regulate and does not forbid. A community may appoint one or two owners as account reviewers, in the Spanish usage a censor de cuentas, who see the statements and the invoices before the meeting and report to it; or it may engage an outside accountant for a review or a full audit. Either is an ordinary resolution of the meeting under article 17.7, and the cost is a community expense. A review by owners costs nothing and catches most of what matters: a supplier paid twice, a fee collected and not banked, a transfer to an account nobody recognises. A full audit is worth its price after a change of administrator, after a large work, or when the meeting has stopped trusting the accounts and the vote is becoming a quarrel.
The reporting duties the account brings
An account with the community's NIF makes the community a taxpayer with a calendar, and the duties are the State's, filed with the national tax agency whatever the island. Two apply to almost every community and one to some.
The first is the annual return of operations with third parties, the Modelo 347. Since 2014 communities of owners are expressly obliged to include in it las adquisiciones en general de bienes o servicios que efectúen al margen de las actividades empresariales o profesionales, incluso aunque no realicen actividades de esta naturaleza, the acquisitions in general of goods or services they make outside any business or professional activity, even if they carry on no such activity (Real Decreto 1065/2007, article 31.1), for every supplier with whom the year's operations exceed 3,005.06 euros; the regulation then excludes, for communities, the supplies of electricity and fuel for communal consumption, the supply of water for communal consumption and the insurance of the common elements (article 33.5). A community with a lift contract, a gardener and a cleaning company files it every February; the administrator does.
The second is withholding. The income tax regulation lists among those obliged to withhold Las personas jurídicas y demás entidades, incluidas las comunidades de propietarios y las entidades en régimen de atribución de rentas, legal persons and other entities, including communities of owners and entities taxed by attribution (Real Decreto 439/2007, article 76.1.a). A community that pays a self-employed administrator, a lawyer, an architect or a caretaker on payroll withholds income tax on those payments and pays it over quarterly, with an annual summary. The administrator's own invoice is the commonest case, and the community that pays it gross has a problem that will surface in a letter.
The third applies when the community earns something: the rent of a roof to a telecoms operator, a hoarding on the façade, a storeroom let to a neighbour. That income is not the community's for tax; it is attributed to the owners in their shares, and the entity must file an information return on las rentas a atribuir a sus socios, herederos, comuneros o partícipes, residentes o no en territorio español, the income to be attributed to its members, heirs, co-owners or participants, resident or not in Spain (Ley 35/2006, article 90.1), the Modelo 184, unless it carries on no business and the income does not exceed 3,000 euros a year (article 90.5). Each owner then declares their share, the non-resident on the Modelo 210. Which of these three a given community owes, and whether a Canary indirect-tax duty is added when the community lets common elements, is a question for the community's tax adviser rather than for this note; what belongs here is that the account in the community's name is the paper trail each of them is built from, and that an administrator who keeps the money in a pooled account cannot file them cleanly.
When the community owes money
The account is also where a creditor looks first. The Act's order is strict: the community answers con todos los fondos y créditos a su favor, with all the funds and credits in its favour, and only subsidiarily, previo requerimiento de pago al propietario respectivo, after a demand for payment to the respective owner, may the creditor go against each owner who was a party to the case for their share of what is unpaid (article 22.1). An owner who is up to date with the community may oppose that enforcement by proving it (article 22.2). The practical reading is twofold. A community that keeps its reserve fund in the account, as the Act intends, has a cushion between a judgment and the owners' pockets. And an owner abroad who pays their fees on time has a defence the Act hands them, provided the receipts exist, which is one more reason to pay by direct debit into the community's own account and to keep the statements.
The reverse case, an owner who does not pay, is the one the Act regulates at length, with the special payment-order procedure, the debt certificate and the interest the meeting may set (article 21), and the owner abroad whose Spanish account the tax agency has frozen, so that the direct debit bounces, has a note of their own on the frozen account. What matters here is that the community's claim is paid into the community's account, and that a fee collected by the administrator in cash or into the firm's account is a debt the community has not recovered yet.
The payment that goes to the wrong account
The fraud that reaches communities most often is a changed bank account. An e-mail arrives from a supplier's address, or from one letter away from it, with a new IBAN for the next invoice; the invoice is genuine, the works were done, and the transfer goes to a stranger. The community's position afterwards is poor: the supplier was not paid and is owed, and the bank will say the transfer was authorised. Three habits stop it. A supplier's bank account is changed only after a telephone call to a number the community already had, never to one in the e-mail. The second signature on transfers outside the budget, the president's, is a second pair of eyes on the IBAN. And the read-only access that lets owners see the movements means the wrong transfer is seen in days rather than at the annual meeting.
The same habit protects the other direction. The community's own IBAN, the one owners pay into, is sent to owners once, in writing, with the minutes; an owner who receives a different one in a message asks the administrator by telephone before paying.
What we do, and what we do not
In the communities we administer we draft the annual budget, collect the fees by direct debit, publish the statements monthly in plain language in the owner portal, the same numbers for every owner, keep every invoice filed and visible, bring significant spending to the community with three comparable quotes, and present the accounts for the community's approval at the year's end; the account in the community's name and the signatures the meeting decides are what that service is built on. We are not auditors and we do not replace the meeting's vote: the account reviewers the community names, the outside audit it engages and the tax adviser who decides which returns a particular community owes are the community's own choices. See our accounts and fees service, or ask for a quote.
Common questions
Our administrator says the money is in "the administration account" of the firm. Is that legal?
The Act does not forbid it and the profession's code does not name it, so it is not illegal in itself; the code requires the administrator to be insured for the funds entrusted to it. It is still the wrong arrangement: the Act treats the reserve fund and the community's funds as the community's own, a creditor looks for them in the community's name, and a handover from a pooled account is a negotiation. Ask for an account in the community's name and NIF, with the president as signatory.
Can I, as an owner, see the bank statements?
Yes. The administrator must keep the community's documentation at the owners' disposal (article 20.1.e), and the statements and the invoices are that documentation. An administrator may ask you to come to the office or may publish them in a portal; it may not refuse. If it does, put the request on the agenda of the next meeting, which the president must include (article 16.2).
Who must sign a transfer?
Whoever the meeting or the statutes decided, because the Act fixes the president as representative and the administrator as the one who pays, but not the bank mandate. Our recommendation is the president on the account in every case, the administrator for ordinary payments within the budget, and two signatures above a threshold the meeting sets.
Does the community have to file tax returns?
Usually two: the Modelo 347 for suppliers paid more than 3,005.06 euros in the year, utilities, water and the common-element insurance excluded, and the quarterly withholdings on the fees of a self-employed administrator or other professional, with the annual summary. If the community earns income from common elements it also files the Modelo 184 and each owner declares their share. The administrator files them from the community's records.
What happens to the account when we change administrator?
Nothing, if the account is the community's: the meeting removes one signatory and appoints another, the bank updates the mandate, and the statements continue. If the money sits in the old firm's pooled account, the new administrator has to claim it, and the time that takes is the community's. Our piece on changing administrator lists what to demand at the handover, and the account is first.
