Streetlights – Answers to questions from owners

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The ‘status quo’ approach:

Q1. What are the ongoing annual costs of maintaining the current system?

Last year we spent 6.017€ on repairs, maintenance and electricity consumption. This included 4.227€ for a new circuit board so that work could be done to identify a fault as the existing board was too dangerous for the electricians to work on.

There is another slightly larger circuit board for the second section of lights. When we get a fault on that circuit, we will have to purchase a new board for that circuit too.

Many of the posts need repair and the bulb holders are rusty making it hard for the contractor to change the bulbs. To keep the system in good repair will cost more than we have been spending.

Q2. It has been stated that individual lights can be replaced by solar alternatives when the current system fails so what would be the cost of replacing individual lampposts with a permanent solar solution on a case-by-case basis?

New installations must be approved by the Town Hall. The temporary fittings do not.

The new posts and units need to be 5mtrs high and sited at the road edge of the pavement.

Our current posts are 3mtrs high and sited at the garden edge of the pavement.

Replacing on a case-by-case basis, even if allowed by the Town Hall, would make the streetlights system very disjointed and create an odd lighting profile, which would not meet the standard.

Q3. If the costs of maintenance require additional owner contribution could this cost be covered by an appropriate increase in Comunidad fees?

If we don’t go ahead with the new solar light system, we have a very large reserve that would cover repairs and maintenance for years to come. No increase in fees would be needed.

This approach will simply delay the inevitable decision as to the future of the streetlight system.

The legal approach

Q4. For owners to make an informed position on this option, the cost of the legal work needs to be known so why can we not get this cost in advance of making a final decision? If an investigation is needed to form the quotation/estimate – we should be obtaining that investigatory cost as a starting point. If it is negligible – say under 5000 EUR – that seems a reasonable cost to pay from reserves for owners to be fully informed, and the final decision should be deferred until that point.

We have over 120,000€ in our reserve fund and it has been published that Urbanisation Tosalet was awarded 90,000€ costs. If our case is the same, we might expect to pay up to that amount.

The key issues with the legal approach are not the cost but:

• the time it could take to get a decision. It took Urbanisation Tosalet 10 years

• the uncertainty of winning

• the waste of money if we lose

• paying money for legal costs against a public body who have no constraints on what they can pay to fight a case and no timescale for a conclusion.

The solar approach

Q5. As we could be left in the same position as with the current system what legal guarantees will be sought from the Town Hall that they will adopt the system should we get the work done?

We can ask them about this when we submit the project to them for approval.

The Town Hall would not have cause to reject an application to adopt if they had already approved it as meeting current lighting standards.

If the Town Hall did refuse to adopt the system our ongoing commitment will be less than it is now where cable breakages cause numbers of post to be out of service at once.

Each solar post is independent of the next so there would be no general failure.

We would have 8 years guarantee during which time we would know the sort of faults, if any, that develop and identify the cost of repairs. We can ensure we have enough funds each year to cover any potential repairs once the guarantee runs out.

We should bear in mind that when the Town Hall are responsible for streetlights there are often very many not working at any given time as they do not replace bulbs or repair faults quickly. An example is when Urbanisation Las Laderas had their streetlight cables stolen, they were without lights for 2 years waiting for the Town Hall to rectify the situation.

Q6. There is a risk that some owners will not pay their share. What protection is there for owners that do?

The Pinosol Comunidad currently takes debtors to court for any outstanding fees, including the one-off payment required.

If the fee for the loan repayment wasn’t paid the Bank will pursue that owner individually.

We retain a safe amount of 33.000€ in our funds to cater for this eventuality pending court action against an owner.

Q7. If this option is adopted, what contribution will be asked from new/resale owners?

New owners will be made aware during the sale process whether the previous owner had agreed to the loan and in that case can either clear the remaining debt or take on the loan payments.

Comunidad’s are required to provide certificates of debts on any property to the sales agent for presentation to the Notary who’s job it is to ensure fees are paid from the proceeds of the sale before completion.

Q8. A single loan would be a lot more efficient than every owner having to arrange their own, so what consideration has been made to the Comunidad seeking the loan and then owners paying this back through higher annual Comunidad fees?

The proposal is for the loan to be taken out by the Comunidad, who then provide details to the Bank for all owners who have agreed to be party to it.

The Bank require a minimum of 50% of owners to agree to the loan to be able to grant it.

Every owner pays 1 share (apart from one who has 2 shares) and the Hotel pays 2.5 shares.

We will collect the repayments in the same way as fees, which may have to be monthly as the bank require repayments monthly.

For illustration purposes only, if all owners agree to a loan of 158,000€ the cost is 176,210€ over % years (60 months), which is 2.937€ per month between us all.

Divide by the total number of shares at 151.5 – equals 19.38€ per month or 232.62€ per year for one share. This amount would be in addition to the normal annual fee which we would decide at an AGM bearing in mind the new situation.

Please Note: all figures are approximate and depend on the interest rate at the time we take the loan and the exact period over which we decide to take it. The maximum of 8 years would result in a lower repayment amount if owners preferred that.

Margaret March
President