Owner communities are not required to open a bank account, but without one it is very difficult to keep track of neighbors’ taxes and common income and expenses generated by the building, such as electricity, water, cleaning or maintenance. It is the most efficient and transparent way of managing the daily life of the community, which helps maintain social peace in an environment where coexistence is not always easy.
However, there are many doubts about the relationship between ownership communities and bank accounts. The Bank of Spain (BdE) and Sabadell answer some of the most frequently asked questions.
“The neighboring communities, despite not having legal personality, have full capacity to act and, therefore, can be holders of bank accounts,” they say in the Catalan bank. The president, appointed by the General Assembly of owners, is the legal representative of the community.
However, the administration of the bank account can be delegated, in addition to the president of the community, to a property administrator, or to two or more people. In the latter case, a joint signature regime is envisaged: to carry out any operation on the account, the signatures of two or more people will be required.
The most convenient thing is to ask for information from different financial institutions to be able to compare the conditions. Among these, particular attention must be paid to the cost of the services most requested by communities, “such as bank transfers and direct debit of receipts”, notes the Bank of Spain.
It is also necessary to consider, Sabadell adds, the requirements that the account must satisfy (sometimes it is necessary to contract an additional product), the services offered by the institution (such as “online” banking or the debit card), or the possibility of direct debit receipts.
As bank account holders, owner communities can apply for loans to, for example, carry out major works on the building. Before signing anything, the BoE recommends evaluating “whether it is really necessary and, if appropriate, establishing a realistic payment plan”.
In this case the president, the legal representative of the community, cannot act alone, “but this decision must be approved by all neighbors in a general meeting”. According to the law on horizontal ownership, a simple majority is sufficient, “but as long as it represents the majority of the participation shares”.
Responsibility will be shared between all owners. Each of them will take charge of a part based on their participation fee, which differs depending on the type of property: a house is not the same thing as a garage or a cabin.
The financial institution may charge for its services the fees established in the contract signed with the neighborhood community. The most common are opening, maintenance and some movements (transfers, direct debits, etc.).
All community owners have the right to obtain access to account information (for example, income and expense movements) from the community administrator. They can ask the manager to provide them with this information or to call a meeting of the owners to present it.
Interview: Understanding Bank Accounts for Ownership Communities
Time.news Editor: Good day, and welcome to Time.news! Today, we have the pleasure of speaking with Dr. Maria Torres, a financial expert specializing in community management and banking regulations. With increasing discussions around ownership communities and their financial management, we thought it was vital to get some clarity on how these communities can effectively handle their accounts. Welcome, Dr. Torres!
Dr. Maria Torres: Thank you for having me! It’s great to be here to discuss such an important topic.
Editor: Let’s dive right in. Many ownership communities operate without a bank account, which, as we know, can complicate financial tracking. Why do you think some communities choose this route?
Dr. Torres: That’s an excellent question. Many communities might feel that the burden of opening and managing a bank account is unnecessary, especially if they perceive their financial transactions to be minimal. However, as highlighted by the Bank of Spain and institutions like Sabadell, having a dedicated account can significantly enhance transparency and efficiency in managing community expenses, like utilities and maintenance.
Editor: You mentioned transparency. How does a bank account specifically enhance this aspect within a community?
Dr. Torres: A bank account allows for clear records of income and expenses. This is crucial for any shared living environment where disagreements may arise over funds. By tracking all transactions in one place, communities can minimize disputes and build trust among neighbors. It also provides a straightforward way to monitor contributions towards shared services, fostering a sense of accountability.
Editor: That makes a lot of sense. Another point that came up in the article was the legal framework surrounding community accounts. While ownership communities lack legal personality, they seem to have the capacity to hold bank accounts. Can you elaborate on that?
Dr. Torres: Absolutely! Ownership communities might lack formal legal status, but they function as collective entities with rights and responsibilities. The president of the community, elected by the General Assembly of owners, acts as the legal representative. This means the community can indeed hold a bank account, providing a formal mechanism to manage its finances. It’s essential, however, for communities to have clearly agreed-upon protocols to avoid conflicts.
Editor: Interesting! Speaking of management, the article mentions delegating account administration. What would you recommend as the best practices in this area?
Dr. Torres: Delegation should be clear and transparent. It’s often best if the community appoints trusted individuals, such as a property administrator, alongside the president. Implementing a joint signature requirement can also add an extra layer of security and accountability, ensuring that no single person has unilateral control over the funds. Regular reviews and updates of financial management practices can also benefit the community.
Editor: Excellent advice! Now, for those considering opening a bank account, what should they take into account when choosing a financial institution?
Dr. Torres: They should start by researching various banks to compare service costs, especially for the most frequent transactions like transfers and direct debits, as highlighted by the Bank of Spain. Communities should also look into whether the bank’s requirements align with their needs, such as minimum balances or monthly charges, and how accessible customer service is for handling any questions that may arise.
Editor: Great tips, Dr. Torres. Before we wrap up, could you summarize the key benefits of opening a bank account for ownership communities?
Dr. Torres: Certainly! Opening a bank account streamlines financial management, enhances transparency, and helps avoid disputes. It empowers communities to track their income and expenses accurately, fosters accountability among members, and provides a structured way to handle shared financial responsibilities. In short, it’s a small step that can lead to a significant improvement in community living.
Editor: Thank you so much for your insights today, Dr. Torres. This conversation sheds much-needed light on a critical aspect of community governance.
Dr. Torres: Thank you for having me! It’s been a pleasure discussing this important topic with you.
Editor: And to our readers—thank you for joining us! Stay tuned for more insights and discussions on community living and financial management.