What is unfair administration or improper management of the administrator?

Unfair administration or improper management of the administrator is the crime committed by a person (administrator), who, taking advantage of the full powers that have been granted to him over an asset, manages it incorrectly, which also causes economic damage to the owner (or owners) of those assets.

It is not necessary that there is a profit motive, that is, that he is looking to enrich himself. It is enough that the person who commits the crime is aware that the assets that he manages are exposed  to some type of risk and, despite being at risk he still exposes them, thus committing the crime of unfair administration or improper management of the administrator.

This crime does not only apply to cases of companies or legal entities, since it is also considered a crime of unfair administration that a natural person without any type of commercial or corporate relationship involved, who manages the assets of a third party with his or her consent and puts it at risk, causing the aforementioned economic damage to its owner.

Where is the crime of unfair administration regulated?

The crime of unfair administration or improper management of the administrator is regulated in article 252 of the Penal Code, after the 2015 reform, when it ceased to belong to corporate crimes, as it was understood that it was not exclusively limited to a crime that could affect companies or legal persons.

In this way, the crime of unfair administration or improper management of the administrator, regulated in the field of crimes against property and against the socioeconomic order with article 252 of the Penal Code establishes that:

1. They will be punishable with the penalties of article 249 or, where appropriate, with those of article 250, those who, having powers to administer another’s assets, emanating from the law, entrusted by the authority or assumed by means of a legal transaction, infringe them, exceeding himself in its exercise and, in this way, causing damage to the managed assets.
2. If the amount of the patrimonial damage does not exceed 400 euros, a fine of one to three months will be imposed.

The administrator

He is the main protagonist of this type of crime. Once the administrator is formally in charge of the administration of another’s assets, he must manage the same with as much diligence as if it were his own.

As has been established in numerous judgments, it is not necessary for the person who manages an estate to have the title of administrator (de facto administrator as opposed to legal administrator), since a person with the necessary capacities can be in charge of these tasks, which means that he may also could be responsible for this type of crime, even if he does not hold the formal title of administrator.

In this way, it can be established that the administrator will be any person to whom the owner(s) of the assets have granted full powers for the management of said assets, such as the performance of legal business on behalf of the owner of the estate, including the sale, purchase, or contracting all kinds of obligations. Likewise, among its powers are that of being able to internally designate the destination and use of patrimonial assets.

When is a crime of unfair administration or improper management of the administrator committed?

Establishing what are the behaviors of the administrator that can be classified as a crime of unfair administration is an issue on which some debate has arisen. This is due to the need for a precise definition of the definition established by the Criminal Code regarding acts classified as unfair administration or improper management of the administrator, defined as those that “exceed the functions”, without leaving clearly established where such limit of functions is found.

In these cases, the judge will be in charge of determining if there has been an excess of the functions of the administrator, after establishing that the infraction has been committed in a manifested and unquestionable way, as well as the existence of a correlation with the patrimonial damage caused.

Likewise, it should be noted that the crime of unfair administration or improper management of the administrator can be committed both by action and by omission, which means that failure to properly attend to the duties of asset management can also be the cause of the commission of this type of crime. Although there is also some debate at the jurisprudence level on this position.

What are the penalties for unfair administration or improper management of the administrator?

The penalties with which a person who incurs in the crime of unfair administration can be punished, according to the basic type, are:

.  Article 249 of the Criminal Code: prison sentence of 6 months to 3 years.

.  Article 250 of the Criminal Code: prison sentences of 1 to 6 years and a fine  of 6 to 12 months when certain circumstances concur.

. Article 252 of the Criminal Code: fines from 1 to 3 months, if the amount of the assets’ damage does not exceed 400 euros.