Horizontal division

In accordance with the Catalan civil legislation, the owner or owners of the property who are the owners at the time of the granting of the deed of incorporation are entitled to establish the horizontal property regime.

The title of constitution of the horizontal property regime must be recorded in a public deed, that is, the deed of horizontal division that is being analyzed throughout these questions.

In such deed, in any case, it must be stated:

• The description of the property as a whole, which must indicate whether it is finished or not, and the list of the elements, facilities and common services it has.
• The description of all the private elements, with the corresponding internal order number in the property, the general participation quota and, if applicable, the special ones that correspond to them, as well as the useful area, location, limits, floor plan, destination and, if applicable, the physical spaces or rights that constitute their annexes or connections.
• A descriptive plan of the property.
• The bylaws, if they exist.
• Reservations of rights or powers, if any, established in favor of the promoter or the constituents of the scheme.
• Provision, if applicable, for the formation of sub-communities.

As we have just commented, if the constitutive title of the community of owners is the deed of horizontal division, for its modification, it will be necessary to grant a deed of modification of said horizontal division.

<ejemplo>Así pues, puede suceder que, una vez otorgada la escritura de división horizontal, sea necesario modificar la misma, por ejemplo para cambiar la descripción de alguno de sus elementos, cambios de superficies, el cambio de estatutos de la comunidad, la colocación de un nuevo elemento como un ascensor, etc.<ejemplo>

In such a case, this deed of modification of the horizontal division must be executed, with the particularity that, in order for this to be possible, it will be necessary that such modification be endorsed by the corresponding resolution of the owners' meeting (adopted by the quorum required by law) and that the requirements required by law for the type of modification in question be observed in the deed of modification.

However, the agreement of the owners' meeting shall not be required for the modification of the incorporation title if it is motivated by the following facts:

• The exercise of a right of flight, over-elevation, sub-building and building if it has been foreseen when the regime or right was created.
• Groupings, aggregations, segregations and divisions of private elements or detachments of annexes, if the bylaws so provide.
• Alterations to the use of the private elements, unless expressly prohibited by the bylaws.
• The execution of actions ordered by the public administration in accordance with current legislation on urban planning, habitability, accessibility and urban rehabilitation, regeneration and renovation.

The horizontal property regime is voluntarily extinguished by unanimous agreement of the meeting of owners or, as the case may be, by decision of the sole owner. Thus, if all the owners of the different private elements (or only one if he/she is the owner of all of them) decide to terminate it, the termination can be formalized by executing the corresponding public deed and registering it in the Property Registry.

In any case, it is necessary to know that the agreement or decision requires the consent of the holders of rights in rem over the private or common elements affected (which shall be presumed to have been granted if the holder of the right in rem has not expressed its opposition to the agreement or decision within one month from the date on which it was notified).

Likewise, it is necessary to know that the horizontal property regime will also be extinguished in the event of destruction, declaration of ruin and forced expropriation of the property.

As indicated in a previous question, the constitution of a community in horizontal property regime will necessarily imply assigning to each privative element(for example, to each floor of the block of apartments) a participation quota, that is to say, a certain % that will serve:

• To determine and specify the participation corresponding to the private elements on the ownership of the common elements.
• To fix the participation in the charges, benefits, management and government of the community and the rights of the owners in case of extinction of the regime(thus, for example, if an apartment has a 10% share, when a vote is taken to agree on the proceeding of an extraordinary expense, the vote of the owner of that apartment will compute 10% of the total votes, while if another apartment only has a 5% share, his vote will only compute for that 5%).
• To establish the distribution of expenses and the distribution of income, unless otherwise agreed(for example, if an apartment has a 10% participation fee, and the monthly expenses of the community are 1,000 euros, this apartment will have to pay 100 euros per month, that is, the 10% that corresponds to it).

As indicated above, the participation quotas corresponding to the private elements are expressed as a percentage (%) of the total of the property, and they are fixed proportionally to the surface area and taking into account the use, purpose and other physical and legal data of the assets comprising the community.

<ejemplo>Así pues, por ejemplo, si uno de los pisos tiene 100 metros cuadrados de superficie construida, se le asignará por ejemplo una cuota del 10%, mientras que otro que tenga 50 metros cuadrados, se le asignará una cuota del 5%.<ejemplo>

Finally, it should be noted that the participation fees are determined and modified by unanimous agreement of the owners or, if this is not possible, by means of the judicial authority or an extrajudicial conflict resolution procedure.

The bylaws of the community are, broadly speaking, the fundamental rules that will govern the legal relations between the different owners of the private elements that make up the community.

Thus, the bylaws of the community shall contain the legal regime to which the community is subject, with special reference to the following issues:

• The destination, use and exploitation of the private and common elements.
• The limitations of use and other charges of the private elements.
• The exercise of rights and the fulfillment of obligations.
• The application of expenses and income and the distribution of charges and benefits.
• The complementary governing bodies that, where appropriate, may be established, as well as their competencies.
• The form of management and administration.

Likewise, the bylaws of the community may be complemented by what are called "Internal Regulations", i.e., a regulation of a lower rank than the bylaws, which will include the internal rules concerning the relations of coexistence and good neighborliness among the owners and the use of the elements of common use and of the facilities(such as, for example, the rules for the use of a community swimming pool that the community has).

In view of the above, the interested parties should bear in mind that when granting the deed of horizontal division, the owner or owners of the elements comprising the same must provide bylaws to that effect.

The community of owners created by the horizontal division will be managed through the three main bodies provided for by law, i.e. the presidency, the secretariat and the board of owners. 

In relation to them, it is necessary to point out the following issues:

• The Owners' Meeting is the supreme body of the community, in which all the owners will participate and in which the most relevant agreements for the community will be adopted, by means of a voting system, with each owner having a % of voting rights according to his participation quota.
• For the valid adoption of resolutions of the owners' meeting, the rules established by the Catalan Civil Code for its call, quorum of attendance and adoption of resolutions must be taken into account (since depending on the type and importance of the resolution to be adopted, a specific % of votes will be required, and unanimity may even be required for the most important resolutions).
• The offices of president and secretary are unipersonal.
• The office of president must be held by an owner, while the office of secretary may also be held by an owner or, on the contrary, by a person outside the community who assumes the functions of administration (i.e., an external professional specialized in property administration).
• The president and secretary of the community shall be appointed by the owners' meeting, to which they shall be accountable for their actions. 
• The offices of president and secretary are annual and are eligible for re-election.
• The exercise of the offices of president and secretary is mandatory (however, the owners' meeting may consider the allegation of well-founded excuses), and their appointment is made, in the absence of candidates, by a rotating turn or by drawing lots among the persons who have not exercised the office.
• The offices of president and secretary are not remunerated, unless they are held by persons outside the community, in which case they may be remunerated. 

As it is logical, a community of owners, as a general rule, will have a series of expenses (for example, maintenance of the elevator, cleaning, maintenance of a community pool or garden, etc.) that will be necessary to take care of for the proper functioning of the community. 

Likewise, in certain cases (more exceptional, of course), the communities of owners may also be holders of credits or income in their favor, as for example in the case of a block of apartments that has a dwelling used as a porter's lodge that is rented out and through this rental income is obtained.

Thus, starting from this basis, it is necessary to understand that the participation of each owner, both in the income and in the expenses of the community, will be determined by his participation quota, so that all the owners will be joint owners of the income and expenses of the community, corresponding to each one of them the corresponding % according to his participation quota.

<ejemplo>Así pues, por ejemplo, si los gastos fijos ordinarios de la comunidad son de 1.000 euros al mes, y al propietario del ático le corresponde una cuota de participación del 10%, deberá abonar 100 euros mensuales de gastos de comunidad, mientras que si al propietario del 1º-1ª le corresponde una cuota del 5%, en su caso deberá abonar 50 euros mensuales de gastos de comunidad.<ejemplo>

The real condition of the private elements implies that the law, in order to ensure that all the owners face the ordinary and extraordinary expenses that correspond to them in the community, establishes a guarantee of payment of such debts on the property in question, so that, if the owner does not pay the corresponding expenses, the community can take legal action against the owner, and if the owner has no assets with which to respond to the payment, the community could even take action against the property (requesting its seizure and judicial execution) in order to collect its credit.

This guarantee will be extended to the debts of both the current owner of the property and the previous owners, so that, when a sale of a property subject to the horizontal property regime takes place, it will be necessary to provide a certificate of the state of debts with the community of owners, so that the buyer can verify whether or not there is any outstanding debt with the community (because in case there is, when acquiring the property, the new owner will be affected by this real condition, so he must have this information before the formalization of the transaction).

As it is logical, beyond the ordinary expenses that the community may have each month (paying the staircase light, elevator maintenance, staircase cleaning, etc.), it is normal that, with the passage of time, the need to make extraordinary expenses arises for the proper maintenance of the building (for example, to change some element that has been broken).

In order to be able to pay these extraordinary expenses, the law determines that, in the budget of the community, an amount of not less than 5% of the common expenses must be included, destined to the constitution of a reserve fund to have funds (or "savings") with which to be able to adequately face these extraordinary expenses.

In relation to this fund, it is necessary to take into account that:

• It is owned by all the owners.
• The fund remains assigned to the community without any owner having the right to claim its return at the time of the disposal of the private element.
• The reserve fund must be shown in separate accounts and must be deposited in a special bank account in the name of the community. 
• The administrators may only use it, with the authorization of the presidency, to meet unforeseen community expenses of an urgent nature or, with the authorization of the owners' meeting, to meet extraordinary works of conservation, repair, rehabilitation, installation of new common services and security, as well as those required in accordance with special regulations.
• The remainder of each year's reserve fund will be accumulated in the following year's fund.

In fact, the Catalan Civil Code differentiates between three types of horizontal division, namely:

• The so-called "simple" horizontal division, which is that which is created in an ordinary building, in which the various private elements that can be used individually are divided and have functional independence and direct and independent access to the public road, all with a set of common elements that serve the purposes of the property(for example, the classic apartment building with 10-12 independent floors with a communal staircase).
• The so-called "complex" horizontal division, which is that which will be created when, within the framework of an urban complex formed by different independent buildings, different sub-communities are created in it, forming several stairways or portals, which are connected among them and share landscaped and recreational areas, swimming pools or other similar common elements(the classic urban complex formed by different blocks of buildings that share a garage, swimming pool and community gardens among all of them).
• And finally, the so-called horizontal property "by plots", which is that which is established on a group of independent properties that are considered as plots of land, whether built on or not, and which form part of an urban development, participating inseparably from some elements of common ownership(this would be the example of the classic private urbanization formed by different single-family houses that share common services, such as a swimming pool or a garden area).

Thus, depending on the nature and typology of the building or land in question, the particularities of each of these horizontal property regimes must be taken into account for their adequate constitution and management.

Indeed, the granting of the deed of horizontal division is subject to taxation by the Transfer Tax and Stamp Duty, in its modality of Stamp Duty, with a taxable base of the value of the building and a tax rate, in the Catalan case, of 1.5%.

The taxpayer of the tax will be the owner or owners who grant the deed of horizontal division, and for its payment they will have a period of one month from the accrual of the same, that is to say, from the date of signature of the deed.