Buying on an urbanization in Spain (also referred to as community or residential development), like anything, brings both advantages and disadvantages. Whilst community life can provide security, a sense of community, shared amenities and lack of upkeep hassles – at a financial cost, of course; conversely, if managed badly, it can bring greater financial headaches, stress and neighbourly tensions.
Whilst properties on urbanisations can appeal to holiday rentals for their facilities such as communal pools you need to determine whether a community permits short-term rentals (or those less than three months long, for example) and what the effect will be on the ambience of the development. Will a daily turnover of residents be noisy and disruptive?
Apart from bigger issues such as ascertaining whether a motorway is being built close to the development, how well-located it is for those prospective rentals (is it in the middle of nowhere? On a bus route?) you need to determine what service charges you will be liable for every month or year. What is included in this – home insurance or just communal areas cover?
You need also need to consider the other issues that might cost you money, due to either a possible reduction in the value of your property or an increase in those service charges that you have budgeted for.
The relationships between the current property owners are fundamental, as are the dynamics between the property owners and the people who are responsible for running the development. Owners on a development are subject to a regular service charge, managed by a community of property owners, the executive committee who will have annual meetings to discuss budgets and community rules. It is very important that you attend these meetings if you want to have any say in how the community is to be run.
Management and upkeep costs need to be covered by all of the owners in the development. If a high proportion of the owners are not making payment of their service charge, then those funds will need to be raised from the others. The problem of unpaid fees can be witnessed in developments across Spain since the global downturn – as it can be on condo developments in the USA.
So when considering buying on urbanization, you or your lawyer should contact the community to determine the level of service charge over the past three years. Are there any projects being contemplated by the community that is likely to incur a high cost, such as replacing the swimming pool or repairing balconies throughout the development?
Also, do the vendors of your property owe any service charges? If they do, ensure that any outstanding service charge will be paid upon completion (either by the sellers paying that amount to the community or by you retaining an equal amount of the purchase monies).
The key to finding the right property in Spain is to recognise that the property market and land law are markedly different from the UK. Indeed, whilst the vast majority of properties in Spain are safe buys we all know there have been a fair few that been liabilities.
So, to buy safely in Spain, far more research is needed than in Britain. Equally, you should always use a good, independent lawyer and specialist (English speaking), building surveyor to investigate every aspect of your proposed new home, before paying anything for it.