A brief explanation and the main differences

The difference between an Urban Entity and a Community of Owners

04 / May

After buying a house or apartment in Spain the standard costs, such as the annual tax and utility bills, start to come in.

If the property you buy is located in an urbanisation or apartment building, you will also have to deal with a Community of owners, la Comunidad de Propietarios, or an Urban Entity, la Entidad Urbanística.

In common language, both are generally referred to as an association of owners, although in practice this is not entirely correct. So what is the difference?

Urban Entity

First of all many urbanisations have a general administration which is called la Entidad Urbanística or Urban Entity, EU for short. This EU resembles an association of owners with its annual general meeting of members, the statutes and fees, but it is actually a government body. In general, there are one or more EUs in urbanisations.

The EU is established by the municipality to ensure the preservation and maintenance of the urbanisation or neighbourhood, but then the implementation of this legal obligation is handed over to private companies. These companies take care of the maintenance, organisation of the members’ meeting and the accounting of the EU.  However, they must comply with municipal legislation and are also accountable to the municipality. It is therefore possible to bring any disagreements between owners and the EU to the attention of the municipality, especially if an owner feels that his/her rights are being violated.

The costs incurred by an EU are borne by the property owners. Each owner pays according to the surface of his or her property. The general costs are budgeted each year and the annual contribution per property is determined accordingly. If there are special costs, they are borne proportionally by the owners. If an owner of land or a dwelling does not pay these costs, the EU can, if necessary, seize the land and the dwelling.

Community of owners

When a property is located in a block or apartment building, usually there is a Community of Owners, Comunidad de propietarios or Comunidad de vecinos (literally translated, association of neighbours). This Community of Owners, in short, Community, is, as the name already indicates, an association that is set up by the owners of the block or apartment building and where the same owners also take care of the administration or jointly decide to outsource this to an administration office. Often this Community draws up statutes together with general internal rules that every owner has to follow.

The general maintenance costs for the common areas of an apartment building or housing block are borne by the owners of the properties located in the urbanisation. The annual contribution is calculated according to the value of the property. If, at the annual members’ meeting, it is decided by a three-fifths majority to incur certain costs for improvements that are not strictly necessary for the preservation of the building, for example the construction of a swimming pool, you as owner may refuse to participate. You are not obliged to contribute to the costs, but you are alsonot allowed to use the swimming pool. If you decide later you want to use it, you can only do so after paying your share of the costs.

Selena Escandell Beutick