How a community of owners in a new-build development is set up

Before the first handovers of a residential development begin, it is worth preparing the transition from the developer phase to a community capable of operating in an orderly manner from its first resolutions onwards.

Setting the community up does not consist only of calling a first general meeting. If the work is done in advance, many decisions can reach that meeting already studied and documented.

1. Understand the legal structure before calculating fees

The starting point is to review how the building is configured: constitutive title or horizontal division, bylaws, quotas, annexes, phases, possible sub-communities and special cost-allocation rules.

Without that review it is easy to build a technically correct budget but distribute it in a way that is incompatible with the legal structure of the building.

2. Keep under control the documentation that must accompany the transition

The community will need legal, administrative and technical documentation related to the common elements. In Andalusia, Act 5/2025, the Andalusian Housing Act, establishes that the developer must deliver the Building Book (Libro del Edificio) to the community of owners when the building is under the horizontal property regime.

The useful work is not simply to mark “received”. It is worth distinguishing between requested, received, reviewed, pending and incident, because receiving a document does not guarantee that it is complete or that it solves what the community needs.

3. Prepare the start-up budget

Before the first general meeting, the foreseeable costs of electricity, water, lifts, cleaning, insurance, pool, gardens and other common services can be estimated.

That work makes it possible to prepare a draft budget, identify groups of expenses and simulate fees. Until the community adopts the corresponding resolutions, this is preparatory documentation, not a definitive community budget.

In new communities, the reserve fund must be constituted when the first ordinary budget is approved, with an initial contribution of no less than 2.5 % of that budget. When the ordinary budget of the immediately following financial year is approved, the contribution must reach the general legal minimum, currently set at 10 % of the last ordinary budget.

4. Review existing utilities and contracts

During the construction work, utilities or maintenance services may have been contracted in the developer's name. The future community needs to know what exists, who appears as the account holder, what conditions each service has and what steps will be needed to ensure continuity.

A contract arranged by the developer should not automatically be taken to have been taken over by the community without reviewing its situation and the resolutions required.

5. Distinguish buyers from owners

To prepare the first general meeting it is essential to know who owns a home on the relevant cut-off date. A commercial list of buyers is not necessarily the roll of owners if there are still homes pending conveyance.

The developer will remain the owner of the units not yet transferred, and that reality must be reflected when preparing attendance, representation and quotas.

6. Prepare a first general meeting that actually sets the community in motion

Besides electing the officers, the initial meeting usually needs to address the budget, fees, the reserve fund, the bank account, utilities, contracts, insurance, documentation and the authorisations for the paperwork that follows.

The more work has been done beforehand, the less likely it is that the first meeting will end up postponing basic decisions for lack of data.

7. After the meeting, the operational formalisation begins

Once the initial resolutions have been adopted and the officers appointed, procedures follow one another depending on the situation of the development: legalisation of the minute book, the community's tax ID number (NIF), bank account, digital certificate, changes of utility account holder, administrative configuration and direct debit files. The minute book must be legalised before it is used, in accordance with the Spanish Mortgage Regulations (Reglamento Hipotecario).

If the practice that carried out the pre-administration is later appointed by the general meeting, operational continuity may exist; but the appointment belongs to the community itself and must not be taken for granted during the developer phase.

Preparing the transition reduces improvisation

The purpose of a pre-administration is not to add bureaucracy to the development, but to reach the handovers with a clear view of what exists, what is missing, what the general meeting must decide and what management will follow.

In developments with several blocks, garages, a pool, gardens, phases or differentiated cost rules, starting this work a few months before the handovers makes it possible to detect problems while there is still room to put them in order.

Main sources of law reviewed for this article: Act 49/1960 on Horizontal Property (Ley de Propiedad Horizontal), in particular its first additional provision on the reserve fund; Act 38/1999 on building regulation (Ley de Ordenación de la Edificación), in particular its article 7; article 415 of the Spanish Mortgage Regulations (Reglamento Hipotecario); and Act 5/2025, the Andalusian Housing Act, in particular its article 31 on the Building Book. This content must be reviewed again if relevant legislative changes occur.