The new rules on the current account in red and the duties of the condominium administrator
The new rules on the current account in red and the duties of the condominium administrator.
Current accounts and new rules
With the arrival of the new year comes an unwelcome news for Italian families and businesses: in fact, the rules for the management of accounts in red change.
Automatic debits will no longer be allowed if customers do not have sufficient cash on their current accounts.
The new procedure entails the real risk of a sudden stop in the payments of utilities, social security contributions and loan installments , as banks will be able to automatically suspend the Rid , that is the tool that allows users to be debited from the current account.
The new EBA rules for current accounts in the red
Starting from 1 January 2021, the new rules on current accounts in red will apply
In particular, the European Banking Association has decided to block the Rid and report the customer to the Central Credit Register in the event of three missed monthly payments of at least 100 euros.
In a difficult economic context like the current one, the decision risks weighing heavily on families and businesses, struggling with serious liquidity problems due to the economic consequences related to the Coronavirus pandemic.
Those who are struggling with the loss of work or with the decline in turnover due to the various closures according to the geographical areas and according to the periods, will have to continue to pay the installments of the mortgage, loans, bills and households without being able to count on the help of the current account overdraft .
This is a particular form of financing that the bank grants to its customer in order to make any type of payment, checks, wire transfers, withdrawals even in the event of lack of funds in the account.
What is likely to go red
According to the new Eba rules, from January 2021 the account holder who does not have sufficient funds for more than 90 days to pay the small sum of 100 euros will see the Rid – Direct interbank relationship blocked , i.e. the service with which the customer automatically authorizes his own bank to accept debits from a particular creditor on its current account, such as the bank domiciliation of households.
The Rid is mainly used to make periodic payments such as bills, mortgage or financing installments, rents, salaries, social security contributions, etc.
Not only will the Rid be blocked, the bank will be obliged to report the customer to the central bank with the consequent inclusion of the account holder in the black list of bad payers, an event that will make any request for financing by the account holder in the red much more complicated.
A non-payment of 100 euros, protracted for three months, causes the account holder to be classified as a bad payer , consequently all his exposure to the bank will be classified as impaired credit or non-performing loan ( Npl ).
These rules will impact not only on families and businesses but also on that social microcosm called condominium.
The duties of the administrator with reference to the current account
First of all it is necessary to identify what are the obligations for the condominium administrator with responsibility for managing the condominium current account ; to understand what the disputable violations may be.
In a nutshell, we remind you that the administrator:
- has the obligation to open a current, bank or postal account for each condominium that manages , which must therefore be specific for each property;
- has the obligation to use the condominium current account exclusively for each incoming and outgoing sum , with the consequence that, for example, if the administrator receives the payment of condominium fees from a condominium he cannot use that money immediately to pay a supplier but will have to do it through the account first;
- has the obligation to manage the condominium current account in such a way as to prevent any possibility of confusion between the assets of the condominium and the personal assets or of other condominiums .
The condominium administrator is obliged to open the condominium current account
The new article 1129 of the Civil Code in paragraph 7 provides that the administrator’s obligation to pass the sums received for any reason from condominiums or third parties, as well as those for any reason paid on behalf of the condominium, on a specific current account postal or bank, payable to the condominium.
Before the reform, no law imposed this type of obligation on him.
After his appointment, the administrator must go to the post office or bank he deems most convenient (unless specifically indicated by the assembly) and open the current account of the condominium.
Likewise, the new director, with the appointment resolution, must change the heading of the current account already opened by the colleague who preceded him.
Moreover, the law says nothing about the practical methods of using the account, which, however, may be appropriately regulated by a specific resolution of the assembly or in the regulation.
It is worth remembering that Article 1129 of the Civil Code includes among the “serious irregularities” the failure to open and use the current account which can lead to the revocation of the assignment conferred on it.
The obligation to collect condominium contributions
The duties of the condominium administrator also include that relating to the collection of contributions and the disbursement of the expenses necessary for the ordinary maintenance of the common parts of the building and for the exercise of common services.
Therefore, the collection of contributions represents a real obligation for the administrator. Its possible inertia risks having repercussions on the management of common goods.
And speaking of a “red” current account, if the administrator does not take action to collect the shares of the individual condominiums, he risks not having the necessary funds to face a whole series of payments (electricity bills, central heating , compensation to suppliers, such as the cleaning or sanitizing company, or to companies that have not carried out the work on the condominium).
Is the administrator responsible for the overdraft of the condominium account?
There is the responsibility of the administrator for the liabilities of the current account of the condominium when the manager has not fulfilled the collection of the condominium fees by all the condominiums, thus causing the absence of the necessary funds on the current account for payments of suppliers or services, such as electricity bills or central heating costs.
A concrete example is found in a very recent ruling by the Court of Massa, sentence no. 15/2020, which condemned an administrator to compensation of damages in favor of individuals for having omitted the collection of service fees and, thus, have led to the setting on the current account of ‘ unjustified liabilities ‘.
The new legislation begins at a difficult social and economic time and the hope is that banking institutions will adopt processes to analyze which are the real defaults and which positions to manage with greater sensitivity and tolerance.
MONITORING THE LIQUIDITY present on the current account of the condominium and methodically managing the phenomenon of arrears becomes even more crucial activities, since they contribute to maintaining the liquidity necessary not to risk that the condominium account remains uncovered.
In the activity of g anagement arrears condomin i to them, the Balance Due Diligence Report , available on individuals and companies, helps the building administrator to accurately assess the opportunity to proceed, and the most effective ways;
The information makes it possible to ascertain the debtor’s economic and equity situation, so as to make the credit recovery action strategic and effective through legal action.
A necessary tool for the administrator and for the lawyer, able to make a difference in the management of all situations of overt arrears
GECOSEI by Giuseppina Napolitano