What is the reserve fund, is it compulsory and is it refunded when the flat is sold?

Question

José Manuel Alburquerque · Accepted Answer

The reserve fund is money that the owners' association (the “comunidad de propietarios”) sets aside to pay for unforeseen and urgent expenses or extraordinary works. In Catalonia it is compulsory and each year's budget must allocate to it at least 5 % of the common expenses. It belongs to all the owners jointly and is intended for the owners' association, so it is not refunded to an owner who sells their flat. Whatever is not spent in one year is added to the following year's fund. How much has to be paid in The “Código Civil de Cataluña”, the Catalan Civil Code, requires each year's budget to include, for the reserve fund, an amount of no less than 5 % of the common expenses. If the budget for common expenses is 30.000 euros, at least 1.500 euros a year must go into the fund. Each owner contributes according to their participation share, the percentage of the building that corresponds to their flat or commercial premises, so a flat with a share of 4 % pays 60 euros a year. The 5 % is a minimum and the owners' general meeting can agree on more. The fund's money must be kept in separate accounts and held in a special bank account in the owners' association's name. In the rest of Spain, the Horizontal Property Act (“Ley de Propiedad Horizontal”) has required since 2022 a minimum of 10 % of the last ordinary budget, which is the figure given on many websites, but in Catalonia the minimum is still 5 %. What it can be used for The managing agent can only use the fund with authorisation: From the president, for urgent and unforeseen expenses, such as a breakdown that cannot wait for the owners' general meeting. From the owners' general meeting, for extraordinary works, for installing common services, for the safety of the building and for works required by special regulations. Whatever is left over each year is not shared out among the owners but is carried forward to the following year's fund. And any amount an owner fails to pay into the fund is a debt to the owners' association like any other, for which the flat itself is answerable even if it changes hands. When the flat is sold The law expressly states that no owner can claim a refund from the fund when selling their flat or commercial premises. What they paid in remains in the fund of the owners' association, which the buyer then joins. If the seller wants to be compensated, this has to be agreed with the buyer, for example by taking it into account in the price. The owners' association plays no part in that agreement.