Horizontal Property Act: Bribery in Spanish Communities of Owners
Unbeknownst to most property owners, management of “communities of owners” in Spain has become a source of real corruption.
According to consumers’ organizations, 30% of managers of communities of owners –whether professional administrators or “presidents”- are demanding commissions of between 5%-10% from contractors and supplier companies serving these communities. Where the communities have expensive-to-run or higher maintenance facilities such as gardens, pools or security requirements, providers have larger margins to play with.
Corrupt professional administrators that engage in these practices will demand -or expect to receive- a kickback for awarding contracts, but in a rather discreet elegant manner. After all, they are professionals that get paid for their services and need to dissimulate spurious activities, which are seldom expected of them.
Corrupt presidents on the contrary don’t get paid to their jobs. They become unusually keen on governing the community, will typically behave with crass insensitivity towards ‘dissident’ owners and show despotic manners at AGMs. Often, they will weave a web of friends that are nothing but naive or uninvolved neighbours who, through ignorance, will lend them support by giving out proxies for up and coming community meetings, thus perpetuating the fraud.
These communities are generally teetering on the brink of bankruptcy.
The Spanish Criminal Code can deal with these individuals, if they are uncovered. This is what article 286 states under the title “Corruption between private individuals”:
Whoever, personally or through an intermediary, promises, offers or grants executives, directors, employees or collaborators of a trading company or any other firm, partnership, foundation or organization an unfair benefit or advantage of any nature, in order for the to favour him or a third party against others, breaching their obligations in acquisition or sale of goods or in hiring of professional services, shall be punished with a sentence of imprisonment of six months to four years, special barring from practice of industry or commerce for a term from one to six years and a fine of up to three times the value of the value of the profit or advantage obtained.
But where they are not uncovered, there is only one solution: naive and uninvolved neighbours have to wise up and get involved, whether they live in these complexes permanently or occasionally, replace these corrupt presidents or administrators and establish transparent practices for every provider bidding process (sealed bidding being the fairest and most secure).