Mr. President: What is covered by the community insurance?

Author: Susana Dias

(article published in Canarian Weekly 18th September 2009)

You own an apartment and the community has insurance. So why do you need insurance, too? Your community insurance covers the building, commonly owned property, and the liability insurance. But that insurance doesn't cover losses to your unit as a result of a burglary, if water damage ruins your living room walls, or if someone slips on your wet kitchen floor and is injured. When you buy an apartment in Tenerife you will be paying towards what is known as community insurance. You can’t choose not to pay this because it will be part of your community fees.

If you have bought an apartment or villa, which take part of a building complex, keep in mind that these will be subject to the Spanish Law of Horizontal Division (Ley de Propiedad Horizontal). This law is applicable whether you are resident or not. According to this law, every apartment or villa-owner has the co-property of the common elements of the building complex (stairs, lifts, façades, swimming pool, cleaning services, drains, supply of water, electric wires etc…), together with the rest of owners of the block.  
All property owners of the block form the Community of Property Owners (Comunidad de Propietarios). They are responsible for their individual parts and common areas of the block. They shall maintain the common elements of the building. All of them participate in the expenses of the community on a pro-rata basis. Only those who buy an individual property standing on its own, will not have to join a community of property owners. Every apartment of the block has a share (cuota de participación) in the common property, usually proportionate to the size of the owner's property. Therefore the owner of a large flat will have a larger share in the common property, this share determines the community charges and voting rights of the homeowner.
The urbanizations are ruled by a different law (as they share elements with the outside world such as street lighting, refuse collection, roads…), however, the Spanish Law of Horizontal Division may also be applied to them provided that they meet some specific requirements.

Finding out your community share before buying your property
If you are going to buy a Spanish property, which takes part of a block, it is advisable to check at the Spanish Property Registry (Registro de la Propiedad) the physical description of your apartment and the building that is attached to, in this way you will find out your property size and what is your common-area share.  The Spanish Property Registry may also provide you with the rules about the use of the common facilities, general management and maintenance, which take part of the Statutes of the Community of Owners. Every new owner will be bound automatically by the Statutes and the decisions taken at previous meetings.  You should also make sure the seller is current in his payments, otherwise the unpaid back community fees could be charged to the new owner.  If you are purchasing in a new development the rules of the Community must be explained to you and approved on your behalf.
The purpose of a Community is to provide and maintain the various services required by any community. The supply of water, electricity, satellite TV, swimming pool maintenance, communal lighting and cleaning services, etc, all need to be implemented, scheduled and paid for. Although individuals within the community can meet these tasks, most complexes appoint a professional 'Administrator' to take care of this. The President and Committee members should hold regular meetings to consider the needs and requests of other owners, and then direct the Administrator accordingly.
For example, a company need to be appointed to cut the lawns and tend to the gardens. A company need to be appointed to maintain and clean the swimming pool. A company need to be appointed to insure the Community. The president and board are meant to be independent and choose the best tender for the contract and not choose any company through vested or personal interests.
All the costs of running and maintaining the apartment block are divided by the number of residents and this is the community fee which you pay monthly or annually.

Community Insurance
Part of the community fee goes towards what is known as the community buildings insurance. Under Spanish law each community/urbanization (Comunidad) has to have a minimum amount of insurance to cover buildings insurance, public liability insurance and insurance against water damage.
It is obviously important that the apartment complex block is insured. The community insurance in general covers the outside or external part of the building. For example imagine if a fire breaks out in an apartment which destroys the whole block or part of it – the community insurance covers the costs to rebuild the apartment block.
The public liability is also very important because in a large building accidents can and do happen. This insurance protects against legal action by third-parties. For example imagine that a visitor slips in the corridor and wants to sue or file a lawsuit – the community insurance will cover all the residents of the community (apartment).
The community water damage insurance covers the community pipes which of course run all through the building. If one of these pipes burst then any damage will be covered by the community policy.
What you should know is what you are NOT insured and covered for. Do not assume your community fee which in turn covers the community buildings insurance is covering you for everything and that additional insurance is not necessary.
As far as the common parts of the urbanization or Community of Owners are concerned, the Owners Association will have arranged an insurance that will cover the communal areas. Although such insurance might cover privately owned portions of the building, under no circumstances will it cover your contents. In order to protect your home and your investment you are advised to take up a comprehensive “building and contents” insurance.
Certainly your personal possessions such as furniture, jewellery, electrical items etc are not covered and this must be protected under home contents insurance in Spain. In addition if a neighbour causes a flood which damages your apartment this typically will not be covered under the community insurance (except if the flood was caused by a community pipe). A possibility for this is they are running the bath water and forget it is running and it overflows into your apartment underneath.

Susana Dias is the Director of TVT - the Zurich Insurance Agency in Los Cristianos legally inscribed at the DGS (Direccion General de Seguros Española) with the number C0530B38657193 - more than 15 years providing excellent service.

Contact the Author for more information or any doubt you might have