LEGAL PERSONALITY OF COMMUNITY OF OWNERS. LETTING CONTRACT SIGNED BY THE COMMUNITY OF OWNERS. LAND REGISTRY.
In Spanish law, the Community of Owners does not have recognised legal personality distinct of the owners that compose it. The ground of this issue is the treatment of a Community of Owners as Community of Assets with the peculiarities of the horizontal division. This does not mean that the Community can not act through its legal representative who is the President. Thus, the Community has recognised capacity to sign certain contracts, such as hiring a maintenance service, sign labour contracts, hire an insurance policy or grant powers of attorney to act before Court.
The basic criterion is that a community of owners has no legal personality, which poses many problems for it, such as the Community may open and operate a bank account but can not adjudicate the property at judicial auction one co owner debtor property. This leads to that, therefore, can not register the ownership of a property on behalf of the Community at the Land Registry, having to register for each and every one of the owners according to their respective percentage or quota.
A separate issue is the signature of a letting agreement of a Community property between such Community and a particular (which may be a co-owner). Not long ago, a Community hired a common premises property and applied for registration of the contract at the Land Registry, which was denied by the Registrar arguing, among other reasons, that the property was not registered into the name of the Community precisely because it´s lack of legal personality. After the successive appeals, the Court ruled that it is possible the registration of a letting agreement held by a Community of Owners. Without considering all the points of the case, it is relevant here to emphasize the possibility of registration of the contract and the legal personality of the Community. The Court, understood after examining the documents (Minutes of the Annual General Meetings, Legalization of Acts by the Land Registry, unanimous adoption of the agreement), we are witnessing an act of mere management (letting contract) being the President (or Vice President) the legal representative duly authorized unanimously by the Assembly, therefore, the court does not share the lack of legal personality of the Community.
There are many Community of Owners who rent their premises and therefore should be well advised from the very beginning regarding the representation of the Community, taking into account the majority in the General Meeting, etc. We should note that in the case of lease of common elements without specific use in the property, the favourable vote of 3/5 of the total of proprietors who represent 3/5 of owners would be required.