# Letting and condominium nightmare - help!



## Stiff Upper Lip (Feb 2, 2011)

Hi folks,

This is my first post so HELLO EVERYONE.. :clap2:

I wonder if anyone on this forum has experienced something similar or could advise on a bit of a problem that has come up at my mother-in-law's apartment in the Algarve.

The situation is this:

- She bought an apartment in 2004 that is part of a 2-storey complex. This property was purchased in full and on a residential basis. The original purchase agreement states this.

- A management company was set up to manage the complex on behalf of the owners.

- The majority of apartments were owned by a few investors and held under a property company which I shall call 'A'.

- In 2006 'A' was bought by an individual who became the sole director of 'A'. 

- At some point - and my apologies but it is not clear to me - either the management company or company 'A' applied for and was granted a touristic licence for the complex

- 'A' has been busy putting in place 'Property Management' contracts with almost all of the remaining independent apartment owners with the exception of two owners. One of those two is my m-i-l. These contracts basically stipulate that all rentals will be through 'A' who will take the majority share of the revenue arising.

- Last year she rented out her apartment on two occasions to friends of the family. This was for a peppercorn amount.

- 'A' is now claiming that she should give the majority of that rent to them as they are the only company licensed to rent any property in the complex. Basically, they are trying to treat her as if she has signed up to one of their 'Property Management' contracts which she hasn't (and has no intention of).

- This company is also threatening to put up her condominium fee by 300%.

I now know that she probably does need a licence from the local town hall (this was covered in a previous post on this forum) and we are going to look into getting one sorted out. However, is this company's claim valid? Is it possible for this company to have been granted a monopoly licence over an apartment that they do not own or over which they have no exploitation rights? 

And, can they force a 300% rise in condominium fee on her even though there is an existing contract that explicitly states that her condominium fee will only increase by 3% per annum?

I should point out that this company is threatening court action to (a) recover the rent from 2010 that they believe are entitled to, and (b) to claim that by renting her apartment she broke the condominium agreement and that they are within their rights to name their own condominium fee and to recover the difference on that as well!!!! There is nothing in the condominium agreement that backs up their claim.

I should point out that this company is notorious for being litigous in its dealing with other owners at the complex and, unfortunately, has proven suspiciously successful in getting the local judge to decide in the company's favour... 

I probably haven't explained this very well so my apologies. I am more than happy to try and provide more detail if I can.

Any help or guidance would be greatly appreciated!!

Many thanks.

SUL


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## MrBife (Jul 26, 2009)

You have to be careful here and play this carefully. I would document the rental income you received, deducting your expenses and show them that you made about ten euros profit. Consider offering them half as they requested to get them off your back as long as they agree to that amound in full and final settlement and give you a receipt AND as long as you are happy with the condomimum arrangements they provide. If you are not then put your complaints carefully in writing and send them a registered copy so you can prove delivery.

If you are really doing rental promotion you need to apply for your own 'AL' rental licence, there are companies around that will help you get that.

If you rent without a licence then 'A' could report you with consequent problems.

Best to take this all to a local lawyer for their view, more than likely 'A' are in severe financial difficulties overall which could be the real reason for their agression. Find out from your lawyer what your situation will be if they disappear completely. Get a 'new generation' lawyer rather than one of the old sleepy variety. They have a lot more energy for this kind of thing.


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## Stiff Upper Lip (Feb 2, 2011)

Thanks for the reply, much appreciated.

My mother-in-law has never actually advertised the property and she's only ever intended to let friends or family use it to keep holidays affordable for them. She is in her 70's and, as you'd suspect, she could do without threats of court action, etc. especially when its all happening so far from home. 

Good idea about taking off the costs. Will do that.

We do already have a property solicitor who is looking into this for us but, to be honest, she has previously indicated that she is 'not good in a fight' and we also wonder whether company 'A' has got the judge on their books.... Certainly a lot of the other owners who are being taken to court and lost strong cases suspect so... It's difficult isn't it...


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## paramonte (Sep 9, 2007)

I might think that your MIL must try to get the AL licence, that will clear up the situation. Either that or she has got lots of friends and family visiting. She should go on paying the actual condo fee and let things go to court.


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## Stiff Upper Lip (Feb 2, 2011)

paramonte said:


> I might think that your MIL must try to get the AL licence, that will clear up the situation. Either that or she has got lots of friends and family visiting. She should go on paying the actual condo fee and let things go to court.


Yep, we didn't know about the AL licence so we are going to look into that.

The property company is, however, claiming that she won't be able to get an AL licence because they have the only licence for the whole complex. I find that hard to believe given that her apartment is classed as residential, she own's it 100%, and she has no agreement in place with them to allow them to 'exploit' it. 

She doesn't have many friends/family go. Last year the apartment was only used for a total of 5 weeks and that included her own stay!!


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## paramonte (Sep 9, 2007)

Be carefull she mifgt have signed anything she did not acount for when she bought. 

Ask the company to produce the suposed contract for your MIL to see.


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## mayotom (Nov 8, 2008)

The first thing to check out is their claim that the property has been changed to touristic licence, this is a very difficult process for "A" which takes several years and only with the consent of ALL owners. 

if it is in fact a touristic licence then "A" is entitled to be the sole rental agent on this property, but generally they do not take this approach, and all details of this should have been explained to a purchaser in the purchase contract or on the the contract which is required to be signed to change from residential to touristic.

As for the management charges again the touristic licence does give the management company a lot more flexibility in raising the fee's but these raises must be justifiable, also 70%of the owners must agree, I suspect "A" owns more than 70%

If they so not have a contract with your MIL with regard to renting the property in 2010 then they have no right to claim rental fees from you.

your MIL needs to get every piece of documentation and have it assessed by a lawyer, I can recommend a few firms who deal with this sort of stuff.

lastly, I have worked in this industry in the Algarve for some time, so if you would like to be more Specific about the details please feel free to send me a PM, as most likely I will be familiar with the property or can point you in the right direction, however naming in the public domain can lead to legal problems to send as a private mail


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