Condominium Debts - Who is Responsible? - Madeira Estate

Condominium Debts – Who is Responsible?

Condominium Debts

When purchasing an apartment in a Condominium, or a block, it is important to ascertain whether there are any pre-existing debts to the Condominium Management Company or its suppliers, registered against the apartment. In most cases, you can request a certificate declaration of no debt to the condominium.

But be careful! Buyers have been issued a false statement and are eventually chased for the debt generated by the previous owner of the apartment.

Madeira Estate offers a wide range comprehensive Property Management Services, including detailed Health Check of Property Documents prior to purchase, including:

  • Deed Supervision
  • Property Insurance Consultation
  • Tax Consultation
  • License Requests – License Conversion Services 
  • Debts of Property
  • Condominium Debts Investigation
  • Acquisition of the Caderneta Predial

In this article, we’ll explore Condominium Surcharges that you become your responsibility as the new owner of a condominium or apartment unit, and how Madeira Estate can work with you to ensure you are only liable for the ongoing costs, and no historical debt.

What is the law?

As of this April 2022, a new law (article 08/2022) was introduced relating to the ownership of property and the property’s respective debts. The owner of a property in a condominium or apartment complex that wishes to sell, donate, or dispense of the property in any way, is obliged to request that the Condominium Administrator issue a written document that declares all condominium expenses and debts.

This includes, but is not limited to:

  • The nature of the expenses, such as:  
    • Cleaning of communal areas
    • Elevator Maintenance
    • Groundwork
    • Repairs and Maintenance of the roof and exterior walls
  • The respective amount
    • Cost of individual services
    • Details of contractors engaged to carry out works
  • Payment terms
    • Payment deadlines
    • Repercussions relating to defaults
    • Payment methods

The document must also include any pre-existing debts to service suppliers relating to the property that is to be sold or transferred.

  • The nature of the debt
  • The debt amount in full, including a history of added interest
  • The dates of debts and when they are to be paid

The declaration of property debts must be issued by the Condominium Administration within ten days of the request from the owner. The document is mandatory and must be presented when drafting sale documents or notarising the deed of sale or transfer of ownership.

It is important to know that this declaration is mandatory, unless, the buyer states in the property deed that they are willing to waive the declaration and agree to become responsible for any debt that the seller may have accrued during their period of ownership.

Mandatory expenses for Apartment owners, relating to the maintenance of common areas and equipment.

The new law introduced in April 2022 is designed to provide clarity on the liability of Apartment and Condominium related expenses.

From 2022, the associated expenses of maintaining and upkeep of the common areas and the payment for these services will be the sole responsibility of the owner of the property at the time that expenses we decided, which are due in proportion to the value of the owner’s property – unless agreed otherwise.

Another change concerns the cost of the common areas that are exclusively used by a sole owner. These areas may include balconies and patios for exclusive use. When maintenance and repair work of these spaces affect other common areas of the building, the property owner who is responsible for these exclusive areas must ensure that these areas are cleaned and returned to a satisfactory condition throughout and upon the conclusion of the work in their exclusive area.

Condominium Charges Liability

The liability of charges, and how they follow the property, has now been clarified by the introduction of Law 08/2022. Liability of condominium debt has been an issue in the Portuguese Court for many years now, and the introduction of this law aims to end the debate.

As a result, the moment that a service payment is due is now the key moment to identify responsibility for the debt. Only if the buyer of the property expressly states in the deed that they are willing to absorb the debt due before they take ownership of the property, will they be liable for

As so, in any debt to the condominium, the moment when the payment is due is now the key moment to determine the responsibility for the payment. If it is the previous owner or the one who has purchased the property. Consequently, only if the buyer expressly accepts to do the deed waiving the statement of the administrator referred above, will they be liable for any debt due on a date before the acquisition of the property.

Why work with Madeira Estate?

Madeira Estate has a wealth of experience managing the purchasing process for clients in Portugal and abroad. Our team work to ensure that the history of the property in question is clear of any family dispute, debts, and is correctly zoned and registered with the local authority. Some of our services include:

  • Check Caderneta Predial (Property Tax Registration Document)
  • Check Certidão de Teor (Property Identification Document)
  • Check for mortgages or debts against the property
  • Check Current Owner Registration
  • Offer Legal advice about next steps:  Whether or not to proceed with the purchase / proceed with caution or offer other solutions to mitigate your risk

Contact a member of the Madeira Estate team and find how we can help you with your individual circumstances and find your dream home in Madeira.

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