Is ADR Mandatory in Payment Order Proceedings for Homeowners’ Associations?

The entry into force of Organic Law 1/2025 on 3 April 2025 has significantly changed the way unpaid community fees are claimed by homeowners’ associations in Spain. Since then, Spanish courts have increasingly required parties to prove that a prior attempt at out-of-court dispute resolution has been made through an ADR mechanism (Alternative Dispute Resolution), referred to in Spain as a MASC (“Medio Adecuado de Solución de Controversias”), before filing payment order proceedings.

The law expressly excludes certain procedures, such as the European payment order procedure, but it does not exclude domestic payment order proceedings or the special payment order procedure for homeowners’ associations regulated under Article 21 of the Spanish Horizontal Property Act (Ley de Propiedad Horizontal). For this reason, most Provincial Courts and judicial boards across Spain are interpreting ADR as a mandatory prerequisite for homeowners’ association claims as well.

Until now, in order to judicially claim unpaid community fees, it was sufficient for the homeowners’ association to approve the debt at a meeting, issue the corresponding debt certificate, and notify the defaulting owner in accordance with Article 9 of the Horizontal Property Act. Organic Law 1/2025 did not amend that system, but it did introduce a new general procedural requirement: proving that a genuine attempt at negotiation took place before going to court.

The main legal debate has focused on whether the traditional payment demand under Article 21 of the Horizontal Property Act can by itself be considered a valid ADR attempt. The prevailing judicial interpretation is currently negative. Spanish courts are holding that such payment demands merely serve to legitimise the future court claim, but do not constitute a genuine negotiation process, which is precisely what the new legislation requires.

The most relevant decision to date is the ruling issued by the Provincial Court of Málaga on 6 June 2025, which confirmed the inadmissibility of payment order proceedings brought by a homeowners’ association because no prior ADR attempt had been evidenced.

The same approach has since been adopted by judicial boards and Provincial Courts in Madrid, Valencia, Logroño, Ourense, Tenerife and other judicial districts across Spain. At present, judicial consensus is practically unanimous: payment order proceedings in matters of horizontal property are subject to the ADR requirement.

Spanish courts have also established an important distinction in practice. Where no prior negotiation attempt exists at all, the defect is generally considered non-remediable and the claim will usually be declared inadmissible from the outset. By contrast, if the ADR attempt did take place but was not properly evidenced, courts are generally allowing parties to remedy the missing documentation.

For that reason, it is now essential to keep clear documentary evidence of the negotiation attempt before filing payment order proceedings.

The safest option remains a burofax with certified content and proof of delivery. Certified email services, mediation, formal conciliation proceedings and notarial records are also being accepted by Spanish courts. Some courts are even accepting ordinary emails or WhatsApp messages, provided receipt can be proven and such communication channels are commonly used between the parties.

What is generally considered insufficient is the mere traditional payment demand, telephone calls or communications lacking reliable proof of receipt. Current judicial trends require a genuine invitation to negotiate, although this does not oblige the homeowners’ association to waive any part of the debt or offer reductions.

In practice, any homeowners’ association or property manager seeking to recover unpaid community fees in Spain should now incorporate ADR into its standard protocol before initiating payment order proceedings. The negotiation attempt should be properly documented and expressly referenced in the claim in order to avoid the risk of inadmissibility.

Until the Spanish Supreme Court unifies doctrine or the legislature expressly reforms Article 21 of the Horizontal Property Act, the prevailing approach in Spanish courts is to require ADR in payment order proceedings brought by homeowners’ associations.

At ILIA ETL GLOBAL we advise homeowners’ associations, property managers and individuals throughout Spain on unpaid community fee claims, payment order proceedings and compliance with Organic Law 1/2025.