Not many people know that before starting legal actions against the debtor, it is necessary to have a general meeting to approve the amount owed, so some owners take advantage of this preliminary step to pay exactly when the general meeting is about to be held. As a consequence of this trick these debtors will pay just the outstanding debts without any kind of penalty.

The solution could be to impose a fine or surcharge to the debtor who does not pay on time, but this possibility could only be taken when the community has approved this statutory clause with the unanimous consent of the whole community and this fine will not be able to be charged to a new owner of the property.

The solution in order to avoid unanimity would be to take the agreement in reverse. This means, to increase the budget to be approved at the general meeting by the percentage that is wanted to be charged to the debtor, and to establish a prompt payment discount of the same percentage for the people who pay on time.

With this budget agreement, the people who pay their fees at the right time will get this discount and the amount paid will be the one approved, but the owner who does not pay on time does not get the advantage of the discount so the quota they pay will be higher because they will not benefit from any discount. It is important to say that this kind of discount can be approved just by the majority of the general meeting, so it is not necessary to get the unanimous consent.

Let´s put an example: the community want to get 25% surcharge from debtors, so if the real budget of the community is 100.000 Euros, the community will approve a budget for 125.000 Euros, and the people who pay the fees before a certain date will get a prompt payment discount of 20%.

Supposing all the owners pay on time, the community will receive 100.000 Euros, which is the total amount the community wanted to receive. People who do not pay on time, will pay a surcharge of 25% because they cannot get the advantage of the prompt payment discount.

Apart from the above, the main advantage of this payment system with respect to the late payment surcharge that some communities still apply is that in the event that the defaulter’s home is auctioned for non-payment of the mortgage or other reasons, the purchaser will not benefit from the discount on the fees owed, so the community would get this 25% more from them.

However, if the community has a surcharge system, the purchaser would not be obliged to pay it as the new owners can only be required to pay the fees owed for the current year and the three previous years, but not the surcharges, which can only be charged to the owner who was in debt.

The advantages of the prompt payment discount over late payment surcharges seem obvious.