Is the owners' association obliged to have insurance?

Question

José Manuel Alburquerque · Accepted Answer

In Catalonia, no. Neither the “Código Civil de Cataluña”, the Catalan Civil Code, nor the Horizontal Property Act (“Ley de Propiedad Horizontal”), which applies in the rest of Spain, requires the owners' association (the “comunidad de propietarios”) to insure the building, although some autonomous communities, such as the Valencian Community, do impose it in their housing legislation. But if the by-laws require it or the owners' general meeting resolves to take out a policy, all the owners must pay their share of the premium, which is the price of the insurance. Without insurance, damage to the common parts and any damage they cause to neighbours or third parties is paid for by the owners' association out of its funds and, if those are not enough, by the owners according to their participation share, the percentage each flat holds in the building. That is why, even though it is not compulsory, it is always advisable to have it. What the law says The Catalan code contains no rule requiring the owners' association to insure the building. The national legislation only says that the association “podrá” (may) take out property damage insurance paid for out of the reserve fund, the association's compulsory savings. It is an option, not an obligation. It is, however, compulsory in these cases: If the association's by-laws require it. If the owners' general meeting resolves to take out a policy, for which a simple majority is in principle enough. The premium is then shared like any other common expense, according to the participation share of each flat or commercial premises. Outside Catalonia, it is also worth checking the housing legislation of each autonomous community. The Valencian one, for example, requires the owners' association to insure residential buildings against fire and damage to third parties. Other insurance that is not the association's If you have a mortgage, the bank may require you to have property damage insurance on the flat. That obligation falls on the owner and not on the owners' association. It is normally covered by your own home insurance. The bank must accept a policy from another company if its cover is equivalent. In new buildings, the ten-year structural defects insurance (the “seguro decenal”), which covers structural damage for ten years, must be taken out by the developer, not by the owners' association. It protects the owners for those ten years.