The Condominium Account: Fund Separation and Garnishment

The account held in the condominium's name constitutes an autonomous estate, separate from both that of the administrator and that of the individual owners. This separation, imposed in practice by the mandatory dedicated account of Article 1129, paragraph 7, of the Italian Civil Code, has two mirrored consequences: on one hand it protects common funds from the personal creditors of the administrator or of a single owner, on the other it makes them reachable by the creditors of the condominium as a whole.

What a separate estate means

The money paid into the condominium account does not belong to the administrator, who is only its manager on behalf of the community, nor does it belong directly and freely to the individual owner. It is a mass set aside for a purpose: to pay common expenses. For this reason the personal creditors of the administrator cannot satisfy themselves on that account, and a creditor of a single owner cannot garnish the common sums for a private debt of their debtor.

The separation therefore protects the function of the account: to ensure that owners' contributions are used for condominium purposes and are not mixed with unrelated financial events.

The mandatory account as a separation safeguard

Before the 2012 reform, so-called mixed management was widespread, in which the administrator passed the money of several condominiums, or even their own, through non-dedicated accounts. This confusion produced economic damage and hard-to-remedy opacity in the past. The obligation of an account held in the condominium's name exists precisely to prevent commingling: by keeping funds on a distinct and identifiable account, asset separation becomes concrete and verifiable.

When creditors can garnish the account

If the condominium has a debt, for example towards the firm that carried out the works, the creditor acting through enforcement can turn to the balance on the condominium account. Case law recognises the legitimacy of this garnishment precisely because of asset separation: the account belongs to the condominium, so it answers for the condominium's debts.

• A creditor of the condominium can garnish the sums on the account to recover their credit.
• The garnishment of the account may precede direct action against individual owners.
• The account answers for obligations taken on in the common interest, not for the private debts of owners.
• The personal creditors of the administrator have no claim on the condominium account.

Protection of the compliant owner

The separation is intertwined with the rule of Article 63 of the implementing provisions, under which creditors cannot act against owners who are in good standing with payments until after pursuing the other defaulting owners. This principle protects those who have paid their share, requiring the creditor to turn first to the defaulters. The relationship between garnishment of the account and this benefit in favour of the compliant owner is a subject of attention in case law, because the account also contains the payments of those who are in good standing.

Practical implications for the administrator

Understanding the separate nature of the account helps the administrator to manage it correctly. It means never using the condominium account for unrelated operations, not offsetting positions between different condominiums, keeping each management on a distinct account and preserving full traceability of movements. Orderly management reduces the risk that, in the event of garnishment, confusion arises over the sums actually attributable to the condominium.

Management software naturally keeps the accounts of each condominium separate, avoiding any commingling and documenting the ownership of each movement. AmministraPro manages each condominium with its own account and its own distinct accounting, in line with the principle of asset separation, as described on /funzioni, with the plans set out on /prezzi.