In Spain, every residential complex or apartment building is organized as what’s called a comunidad de propietarios—a homeowners’ association. All apartment owners make mandatory monthly contributions that form the annual budget. These funds are used exclusively to maintain order, pay utility bills, and address shared concerns in the building. However, sometimes the money ends up being used for entirely different purposes, and the consequences can be quite unpleasant for everyone involved.
How exactly the community’s funds are spent is a pressing concern for many. It’s not just about transparency, but also legality. If the president or administrator decides to use budget leftovers without approval from the general assembly, they risk being at the center of a scandal—or even facing legal action. The law is clear: all expenditures must be approved by a majority of owners, and any deviations from the authorized plan may be considered an abuse of power.
Budget under control
The community’s annual budget is approved at a general meeting by a simple majority vote. It includes all mandatory expenses—from electricity and water bills to elevator maintenance and cleaning of common areas. In addition, a reserve fund is always set aside for unforeseen circumstances, such as emergency repairs or urgent safety work.
If the need for additional expenses arises that were not planned in advance, an extraordinary meeting is called. Only after being approved by a majority of property owners can a so-called “derrama”—a special assessment—be organized. Even if there are leftover funds in the account, they cannot be used for new projects without the consent of all residents. Any initiative must be transparent and clear to all participants.
Risky experiments
Sometimes presidents or administrators take the initiative to allocate funds for purposes that were not previously approved. For example, spending the balance from a derrama on landscaping or repairs that no one requested. In such cases, it’s not just a management error, but potentially a violation of the law. The Spanish Criminal Code (Article 252) establishes liability for the misappropriation of funds—including the possibility of criminal prosecution for administrative abuse or misappropriation of someone else’s property.
There have been even more egregious cases in the history of Spanish communities. Several years ago in Estepona, the president of one community awarded himself a salary of 86,000 euros a year without informing other residents. The result was a court case and a province-wide scandal. Such stories serve as a lesson for others: any financial decisions must be made collectively and recorded in meeting minutes.
How the budget is formed
Budget planning is a straightforward process, but it requires attention to detail. The first step is to account for regular expenses: utility bills, maintenance of common areas, staff salaries (such as a concierge or gardener). Then, possible unforeseen expenses are added—for emergencies or other unexpected situations.
Once all expense items have been calculated, the final amount is submitted for approval at the general meeting. Only after receiving a majority vote from residents does the budget become mandatory. If there are unused funds at the end of the year, the homeowners decide what to do with them: keep them in reserve or return them to the residents. No one has the right to manage these funds independently.
Risks for violators
Any unauthorized use of funds can lead to serious consequences. In addition to losing neighbors’ trust, the offender may face administrative or even criminal liability. If abuses are discovered, residents have the right to take the matter to court, and those responsible may be required to return the money and face legal penalties.
To avoid conflicts, it is recommended to describe all expense items in as much detail as possible and regularly inform homeowners about money management. Transparency and openness are the main conditions for peaceful living in any building.
If you didn’t know, in Spain the activities of community presidents and administrators are regulated not only by internal statutes but also by national law. All financial decisions must be recorded in meeting minutes and made available for review by all property owners. In case of disputes, residents can seek advice from professional property managers or lawyers specializing in real estate and residential community management.
