How the community reserve fund can be invested in Spain: LPH rules on bank deposits and remuneration (2026)

The fondo de reserva is mandatory, but the LPH does not say where it must sit. Here is how a community can earn interest on its reserve without breaking the rules.

Every comunidad de propietarios in Spain must hold a reserve fund under Article 9.1.f of the Horizontal Property Law (Ley 49/1960). The minimum is 10 per cent of the community’s last ordinary annual budget, raised from 5 per cent by Real Decreto-ley 7/2019. What the law does not prescribe is where the money must be kept. Many communities leave the fund sitting in a zero-interest current account, forgoing interest that could offset community fees. This guide explains what the LPH permits, what financial products are suitable, and the junta process for putting the reserve fund to work.

What does the LPH say about investing the reserve fund?

Article 9.1.f of the LPH establishes three things about the reserve fund: it must exist, it must hold at least 10 per cent of the last ordinary budget, and its titularidad (ownership) belongs to the community at all effects. The article expressly allows the fund to be used to subscribe a building insurance policy or a permanent maintenance contract, both of which are spending decisions, not investment decisions. The law is silent on whether the fund may be placed in a remunerated account or a term deposit, which means the community has discretion within the general framework of community decision-making.

The silence is not a prohibition. The LPH gives the junta de propietarios competence over all matters of interest to the community under Article 14.e, and the fund belongs to the community. Placing the fund in an interest-bearing deposit is a financial management decision, not a substantive modification of the title or statutes, so it does not require unanimity under Article 17.6. It falls under the general agreement threshold of Article 17.7: a majority of the total owners representing a majority of the total participation quotas on first call, or a majority of attendees representing more than half the quotas of those present on second call.

The key constraint is the statutory purpose. Under the current consolidated text of Article 9.1.f (as amended by Real Decreto-ley 7/2019 and Ley 10/2022), the fund exists to cover conservation, repair and rehabilitation works on the building, plus mandatory accessibility and energy efficiency works. Any investment must preserve the fund’s availability for that purpose. A product that locks the money for years, or one that risks capital loss, is incompatible with a mandatory reserve that may be needed at short notice for an urgent repair.

Which financial products are suitable for the reserve fund?

The reserve fund is not personal savings. It is a collective asset held against foreseeable building works, so the product choice should prioritise liquidity and capital preservation over yield. Three categories fit that profile, each with different trade-offs between access and return.

Product	Liquidity	Typical return	Risk to capital	FGD coverage	Suitability for reserve fund
Current account (cuenta corriente)	Immediate	0 per cent (usually)	None	Up to EUR 100,000	Default, but earns nothing
Remunerated account (cuenta remunerada)	Immediate	1 to 3 per cent TAE	None	Up to EUR 100,000	Best fit: liquid and earning
Term deposit (deposito a plazo)	Locked until maturity	2 to 3.5 per cent TAE	None	Up to EUR 100,000	Suitable for the portion not needed short-term
Money market fund (fondo monetario)	T+1 to T+2	Variable, near deposit rates	Low but not zero	Not covered (CNMV regulated)	Possible, but adds complexity

The Banco de Espana’s Portal del Cliente Bancario distinguishes between cuentas a la vista, where the customer can withdraw immediately without penalty, and depositos a plazo, where the money is locked until a fixed maturity and early cancellation typically carries a penalty. For a reserve fund, the remunerated account is the simplest fit: the community earns interest while retaining instant access for urgent works.

A term deposit offers a higher rate, but only for the portion of the fund the community is confident it will not need during the deposit term. A six-month or twelve-month deposit on 30 per cent of the fund, with the rest in a remunerated account, balances yield against availability. The community should match deposit maturities to its planned maintenance calendar so the money is free when the roof inspection is scheduled.

How much interest is a community leaving on the table?

The opportunity cost of a zero-interest reserve fund is straightforward to calculate. Consider a community with an annual budget of EUR 60,000. The 10 per cent minimum reserve is EUR 6,000, but many communities hold more, particularly older buildings approaching major works. A community with a EUR 50,000 reserve fund earning zero interest on a standard current account forgoes roughly EUR 1,000 per year at a 2 per cent remunerated rate. Over five years, that is EUR 5,000 in foregone income, money that could reduce the derrama (special contribution) for the next round of works.

The calculation changes with the deposit guarantee ceiling. The Fondo de Garantia de Depositos de Entidades de Credito covers up to EUR 100,000 per depositor per credit institution. A community fund below that ceiling is fully protected against bank failure. If the fund exceeds EUR 100,000, the community should split the deposit across two or more banks so each holding stays within the guarantee limit. The community is a single depositor for FGD purposes regardless of how many owners it has, so the EUR 100,000 cap applies to the total fund at each bank, not per owner.

What is the junta process for changing the bank account?

The process follows the standard LPH meeting framework. The administrator or any owner proposes the change, the president includes it on the agenda for the next junta, and the owners vote under the Article 17.7 general majority threshold. The proposal should specify the new bank, the product type, the expected interest rate, and whether any portion will be placed in a term deposit with a maturity date.

The junta must be convened with at least six days’ notice for an ordinary annual meeting, or as much notice as practicable for an extraordinary meeting, under Article 16.3. Owners who are behind on community payments lose their voting rights under Article 15.2, and their quotas are not counted toward the majority calculation. If the first call does not reach quorum, a second call may proceed without quorum on the same day thirty minutes later, or within eight days with three days’ notice.

The agreement should be recorded in the acta (minutes) with the specific product, bank, account holder name (the comunidad de propietarios, not the administrator personally), and any authorisation for the administrator to manage the account on the community’s behalf. The bank will require the comunidad’s CIF (tax identification code), the acta authorising the account opening, and the personal identification of the authorised signatory.

Can the reserve fund be placed in an investment fund?

The LPH does not expressly address investment funds, and the CNMV regulates them as institutions of collective investment that pool capital from multiple investors. A money market fund (fondo monetario) invests in short-term debt instruments and aims to deliver a return close to deposit rates with daily or T+1 liquidity. It is technically possible for a community to place part of its reserve in a money market fund, but three caveats apply.

First, investment funds are not covered by the Fondo de Garantia de Depositos. The CNMV regulates them for diversification, liquidity and transparency, but the fund’s value can fall, particularly in a rising-rate environment where bond prices drop. A community reserve fund is a mandatory safety net, not a yield-seeking portfolio, so capital risk is unacceptable. Second, the community needs a junta agreement to open the fund position, and the agreement should be specific about the product and the risk profile. Third, the accounting is more complex: the community’s annual accounts must reflect the fund’s valuation, and the administrator must report gains or losses to the junta.

For most communities, a remunerated bank account and a short-term term deposit are simpler, safer and sufficient. The incremental yield of a money market fund over a remunerated account is typically small, and the added complexity and risk are hard to justify for a mandatory reserve.

What should a treasurer or administrator check before moving the fund?

The practical steps, in order, are these. First, confirm the current reserve fund balance and verify it meets the 10 per cent minimum. The fund must never drop below the legal floor during the budgetary year, per the Disposicion adicional primera. Second, compare the interest rate on the current account with available remunerated accounts and term deposits. The Banco de Espana’s Portal del Cliente Bancario provides a deposit simulator and a commission comparator that can be used to evaluate offers. Third, prepare a proposal for the junta specifying the product, bank, expected rate, and FGD coverage status.

Fourth, obtain the junta agreement under Article 17.7. Fifth, open the new account in the name of the comunidad de propietarios using the community’s CIF and the acta as authorisation. Sixth, transfer the fund and close the old account only after confirming the new one is operational. Seventh, record the new account details in the community’s books and notify owners through the next junta report.

A community that has never reviewed where its reserve fund sits may be surprised by how much it is leaving unearned. The LPH gives the junta the power to manage the fund, the banking system offers products that combine liquidity with modest returns, and the deposit guarantee scheme provides protection up to EUR 100,000. The only thing standing between most communities and a better-returning reserve is a junta agenda item.

This guide is general information, not legal or tax advice. Rules change and individual circumstances differ. Verify current requirements with an independent lawyer (abogado) or tax advisor (gestor/asesor fiscal) before acting.