We have already mentioned in a recent article that Law 10/2022, of 14 June, on urgent measures to boost building refurbishment activity in the context of the Recovery, Transformation and Resilience Plan, had introduced certain amendments to the Horizontal Property Law (LPH) in relation, among other aspects, to debtors. Specifically, we can find three main blocks:
I. It establishes that interest, even higher than the legal interest rate, and a surcharge may be applied to the debt. The surcharge was a matter that had already been used peacefully as long as the limits of around 20% were not exceeded, but the legislator wanted to include it in the Law.
The law clarifies that interest or surcharges may not be applied retroactively.
II. Similarly, the debtor may be deprived of the use of common elements. This action with respect to, for example, swimming pools had already been envisaged since a favourable ruling in this regard by the Directorate General of Registries and Notaries in November 2012, but now the legislator dispels any doubts. It clarifies that these measures may be included in the Statutes.
This measure has limits: the deprivation may not affect essential elements for the habitability of the property such as, for example, lifts. Likewise, abusive or disproportionate measures may not be agreed.
III. With regard to the legal claim (monitorio), it is established that the Administrator may initiate it on behalf of the Community. Previously, only the President or legal professionals were entitled to do so. In any case, it should be borne in mind that in the event of opposition, and depending on the amount, the intervention of a lawyer and solicitor may become compulsory.
Another significant aspect is that the Certificate of Debt, as long as it is issued by a professional Secretary – Administrator, it is no longer necessary for it to have the approval of the President. In the case of a non-professional, it must be approved by the President.
Finally, these measures reiterate that the claim must entail the imposition for the debtor to pay the legal costs, and seek to promote the use of mediation and arbitration to end debt claim proceedings.