Rules for business premises in Spain
Reserve fund (fondo de reserva)
The fondo de reserva is the money every Spanish owners' community must set aside for upkeep, repairs, renovation, accessibility and energy-efficiency works. The Horizontal Property Act sets its minimum at 10 per cent of the latest ordinary budget (art. 9.1.f); Catalonia has its own rule.
Also known asfondo de reserva · sinking fund · community reserve fund · reserve for works
What the law says
Every owner contributes to it according to their share (LPH, the Spanish Horizontal Property Act, art. 9.1.f). The fund belongs to the community “for all purposes”; it pays for upkeep, repair and renovation works on the property and for accessibility and energy-efficiency works, and its endowment “may in no case be less than 10 per cent of its latest ordinary budget”. The community may use it to take out insurance covering damage to the property or a standing maintenance contract for the building and its general installations, such as the one for the lift.
The first additional provision adds two rules. The endowment may not fall below the minimum at any point in the financial year. And whatever is spent during the year on works under art. 10 still counts as part of the fund when that minimum is calculated, but it is topped up with contributions at the start of the next financial year.
An example: in a building with two commercial units and twelve flats, the water booster pump breaks down halfway through the year. The urgent repair can be paid out of the fund, and when the next financial year begins the owners top it up, each according to their share. The hair salon on the ground floor contributes according to its share, like any flat, and if it sells the unit it takes nothing with it: the fund belongs to the community.
Worth knowing
Catalonia does it differently. The LPH itself leaves room for whatever the autonomous communities decide (first additional provision), and the Civil Code of Catalonia requires the budget to set aside for the fund at least five per cent of common expenses, kept in separate accounts and in a special bank account in the community's name; it also says in so many words that an owner who sells cannot claim a refund (art. 553-6). And the fund is not a special levy: one is topped up every year; the other is a separate payment for a particular job.
Sources
Related terms
- Horizontal property (propiedad horizontal)Horizontal property (propiedad horizontal) is the Spanish legal regime for a building divided into flats or commercial units: each has its own owner and shares the common parts with the rest according to its share. It is governed by Ley 49/1960 (LPH), except in Catalonia, whose Civil Code has its own rules.
- Building logbook (Libro del Edificio)The building logbook (Libro del Edificio) is the record of the finished works handed over to those who use the building: the design and its changes, the handover certificate, the parties involved and the instructions for use and maintenance, with a maintenance plan. The LOE (art. 7) and the CTE (art. 8) require it.
- Special levy (derrama)A derrama is a one-off sum shared out among the owners in a Spanish owners' community to pay for a specific piece of work or improvement, on top of the regular service charge. The Horizontal Property Act uses the word in its arts. 10.2.a) and 17.11 without ever defining it.