Selling an apartment: common expenses and the clearance certificate

Who pays the arrears when a unit is sold?

The seller does. Unpaid common expenses are a debt the owner ran up while they owned the unit, and the sale does not extinguish it. What differs between jurisdictions is whether the debt can also attach to the unit — that is, whether the building can look to the buyer if the seller disappears.

In Spain, as we understand it, the horizontal property law makes the unit itself answerable for unpaid charges of the current year and a limited number of preceding years, which is why the notary requires a certificate of the unit's debts from the community's administrator before the deed is signed. In France the syndic issues an état daté to the notary listing what the seller owes and what the buyer will owe. In Germany the general position, as we read it, is that the buyer does not inherit the seller's Hausgeld arrears towards the community, but owes contributions falling due from the transfer. In Cyprus the debt is the seller's, and in practice it is settled from the sale proceeds at completion. All of this is orientation, not advice: confirm the position with a lawyer in the jurisdiction concerned.

The practical point is the same everywhere. Whatever the law says about who is liable in theory, the moment to collect is completion, because that is when a lawyer is asking the building for a figure and the seller has money on the table.

How is the current period split between seller and buyer?

Recurring charges — the monthly common expenses and the reserve contribution — are normally split by days owned in the period, with the contract of sale saying which side the transfer day falls on. A unit sold on 19 June carries eighteen days of June for the seller and twelve for the buyer, unless the contract says otherwise. Some contracts simply make the seller responsible for the whole month of transfer and the buyer from the first of the next; either works if the building knows which.

One-off costs are harder. A repair invoiced on 25 June for work done in May: whose cost is it? A special levy voted at the general meeting in May and payable in September: the seller voted, the buyer pays? There is no universal rule. The usual approach is that a charge belongs to whoever owned the unit on the date the building's records say it accrued — and the contract of sale can move it. The building's job is not to adjudicate; it is to state clearly on the certificate what has been charged, what has been decided but not yet charged, and the dates, so the lawyers can allocate it between their clients.

What happens to the reserve fund balance?

Nothing — and that surprises sellers. In most jurisdictions the reserve fund belongs to the community of owners, not to the individuals who paid into it. Contributions are not refunded on sale; the buyer takes over the unit's accrued interest in the fund along with the unit. A seller who paid €50 a month for eight years into a reserve that now holds €18,000 leaves with nothing from it directly — but sells a unit in a building that can pay for its lift, which is worth more than one that cannot.

For the committee, the sale is the time to check the seller has no unpaid reserve contributions, and to make sure the buyer knows the balance and the plan it is funding. A buyer who learns of a €60,000 lift project after completion is a dispute waiting to happen. Our post on how much reserve a building should hold covers what a plan looks like and what to disclose.

What is the clearance certificate and who asks for it?

A clearance or settlement certificate is a dated, signed statement from the committee or the managing agent of a unit's position with the building: the operating balance as of the date, any reserve contributions unpaid, any special levy decided but not yet due, any payment plan in force, and the monthly contribution the buyer can expect. It is issued at the request of the seller or the buyer's lawyer, and it should be reproducible from the ledger — not from memory.

In Cyprus, buyers' lawyers commonly ask the committee for confirmation that common expenses are settled as part of the transfer process before the Department of Lands and Surveys; whether and where a document is formally required, and what it must say, is a question for your lawyer, but a seller who cannot produce a clean figure will find the sale delayed. In France the état daté is a defined document with a regulated content and a cost cap. In Spain the administrator's debt certificate is, as we understand it, a requirement of the deed. In every case the building's interest is identical: a figure accurate to the day, issued fast, with its working attached. Domera's ownership transfer controls generate the certificate from the ledger and gate the transfer on the balance, so the certificate and the accounts cannot disagree.

How should ownership dates be tracked?

The mistake that breaks most spreadsheets is overwriting the owner. The moment the seller's name is replaced by the buyer's in the units sheet, every historical statement for that unit is rewritten as the buyer's, the seller's final statement cannot be produced, and the split of the transfer month has to be done by hand — once, and never again reproducibly.

The correct model is a dated record: this person owned this unit from this date to this date. Charges fall on whoever owned the unit on the date they accrued; statements are produced per owner for the days they held it; the former owner keeps read access to their own period and nothing after it; the buyer's first statement starts on the transfer date. The transfer itself is a single event with a date, recorded once, not a series of edits. Everything else — the pro-rating, the final statement, the certificate — follows from that date.

What does the committee do on the day of transfer?

Treat the transfer as a short procedure rather than a favour to the seller's lawyer:

• Bring the seller's account up to date to the day — every invoice allocated, every payment posted — before quoting a figure.
• Issue the certificate with the date, the figures and their working, and the name of the person signing it; keep a copy with the unit's records.
• Record the transfer with its date, and the buyer's details, without altering the seller's history.
• Send the seller a final statement covering their days in the period, and the buyer a first statement with the regulations, the allocation key, the bank details and the payment reference.
• Update contact details, portal access and the meeting register; a sold unit should not receive next year's AGM notice at the old owner's email.

A building that does this every time has clean records, buyers who pay from month one, and no argument in the lobby about who owes the March electricity. It also helps the arrears process, because the sale is the one moment when old debt reliably gets paid.