Экзамен зачет учебный год 2023 / European Condominium Law

within a period of six months after its promulgation and can respond to a matter raised by a lower court as to whether certain actions comply with the above principles. The Law combating Discrimination of 2003, replaced by the Law of 2007 was promulgated to also apply these principles on a horizontal level between private individuals with regard to specific issues. In principle, limitations on the right of free disposal must only be allowed within strict limits in order not to burden ownership excessively. Only restrictions that will promote the harmony in the scheme should be allowed. As statutory rights of pre-emption are mainly restricted to instances where public interests are at stake, there is no need to burden the right of free disposal of an apartment with a right of pre-emption in favour of a neighbour.

Catalonia

Operative rules

(a)The contract of sale concluded with Anne is valid. The clause in the title conditions of the scheme prohibiting the sale of apartments to lesbians is void on the basis of the Spanish Constitution of 1978, which expressly forbids any discrimination on the ground of sexual orientation (art. 14). Thus, even if Anne is in fact a lesbian, she would be able to enforce the contract of sale against Maria. Once the apartment has been registered in her name, the management body cannot refuse her entry into the scheme.

The clause in the title conditions requiring the approval of the management body for the entry of a prospective purchaser into the scheme would be considered contra legem in that it infringes CCC art. 553-37 as an unreasonable limitation on Maria’s right of disposal.

(b)Similarly, any decision of a unit owner to let an apartment falls within his or her right of free disposal, which is a pillar of the law of contract. This can neither be prohibited nor limited by any statute or in the by-laws of a condominium (CC art. 553-37).

(c)Any form of general rights of first refusal and repurchase in favour of existing owners in a condominium scheme are expressly excluded by the law relating to condominiums (CC art. 553-1.2(c)). Only where Maria has contractually agreed to give or sell Benjamin a right of first refusal or of repurchase of her flat if she sells it without offering it first to Benjamin would Benjamin have any claim against Maria.

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Descriptive formants

Despite the scant opportunity to develop a proper jurisprudential approach with regard to the rights that an owner has over his or her unit, there have already been two important court rulings on the Catalan condominium provisions that affirmed that a unit owner has an unrestricted right to sell and rent out his or her unit and that such an entitlement cannot be interfered with in the by-laws of the condominium.101

The general prohibition on discrimination on the ground of sexual orientation is based on the confirmation of art. 14 of the Spanish Constitution by the Spanish Constitutional Court,102 which ruling applies also to Catalonia. Another decision of the Spanish Constitutional Court103 followed the reasoning of the European Court of Human Rights in its resolution 25-3–1992104 that sexual orientation can only figure as a ground for discrimination if superior rights are violated as a result of a person’s sexual orientation. In that case the right of the claimant to visit his child (a minor) was properly constrained by an ordinary court on the ground that the claimant had undergone a sex change. It was proved that this fact could negatively affect the minor’s psychological condition and right to develop his own personality.

It is interesting to add that the current Spanish Law on Lease of 1994, which also applies in Catalonia, mentions three cases that expressly forbade discrimination on the basis of sexual orientation: first, the same sex partner of a deceased tenant can be subrogated to the position of the deceased under the contract of lease (art. 16); second, the physically handicapped same sex partner of the tenant has the right to make physical changes to adapt the premises to his needs (art. 24); and in the third case, in the event that a tenant informs the landlord that he wants to cancel the lease, his homosexual partner can enforce the continuation of the lease (art. 12).

Metalegal formants

If the clauses mentioned in the question are accepted it would also bind all future owners of units in that particular condominium and would severely limit their rights of disposal. Disposal would no longer

depend on the will of an individual owner, but on the will of the other owners. This militates against the core principles of private ownership of units in a condominium.

Croatia

Operative rules

(a)Croatian law does not generally accommodate restrictions on alienating property. However, some restrictions accepted as legally valid can still only bind third parties if they are registered in the land register. Generally, registration is only allowed if the restriction exists between spouses or a parent and child (Law on Ownership and Other Real Rights of 1996 art. 34(2)). Thus, the restriction on lesbians as a category would be prima facie disallowed. In any event, because the restriction obviously discriminates against a social group based on sexual preference, such a clause would be void (Law on Obligations of 2005 art. 322(1)) as contrary to the Law against discrimination (art. 9 (1)), which is applicable to housing relations (art. 8(1)(6)). The clause in question would therefore have no effect between the parties and would be unenforceable.

The approval of the management body (in Croatia the community of owners) cannot be a prerequisite to alienation, as such a rule would also run against the anti-restriction policy (free disposal principle) of the Law on Ownership and Other Real Rights of 1996. A right of preemption (first refusal) can however be created in favour of all the apartment owners in the scheme as explained under (c).

The management body’s refusal to let Anne enter the apartment is therefore unlawful. If the management body refuses access because of Anne’s sexual preference, the alienation restraint is void, and the management body’s refusal is illegal. In the event that the management body had refused consent based on the clause requiring its consent, the restraint has no effect against Anne because it is not capable of being registered. In both cases, if the apartment was registered in the name of Anne, or she has the keys to the apartment, she would be protected both as owner and possessor.

(b)A rental restriction is only valid if it is registered in the land register (Law on Ownership and Other Real Rights art. 81(1)). In such cases the rental agreement would be considered void, and thus unenforceable. However, if Anne was given possession of the unit,

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she would be protected as a peaceful possessor of the unit, so the management body’s refusal would be deemed illegal. The management body could, however, force Anne to leave the premises on the basis of the registered rental restriction that she and Maria violated.

(c) Benjamin does not have an automatic right of pre-emption of Maria’s apartment (Law on Ownership and Other Real Rights art. 37 (5)). Such a right can, however, be set up initially by the developer or all the co-owners and registered in the land register. If this is done, the duration of the right would be limited to a maximum of five years from the initial deed (Law on Obligations of 2005 art. 453(2)). If the right of first refusal was registered in the land register, or was otherwise known to Anne, the sales contract is voidable at the instance of Benjamin within six months from the date on which Benjamin learned of the sale to Anne. Until the contract is set aside, however, the contract is valid and gives Anne the right to enter the building. Thus, the management body’s refusal would again be deemed illegal.

Descriptive formants

Restrictions on alienation run against the typical features of private ownership established on the foundations of the French Revolution because they are considered overly restrictive and akin to feudal legal restraints. This is the justification for the limited restrictions recognised by the Law on Ownership and Other Real Rights of 1996, as well as the time limit on the right of first refusal.

A general restriction on alienation (if not discriminatory as in the case above) would theoretically be enforceable between the parties if the contract specifies a sanction for breaching the restriction. Nevertheless, doubt could still be cast over the enforceability of the clause, because it seriously deviates from the general feature of free alienability of property. The restriction would in any case be unenforceable against third parties because it would not be capable of registration. The law does not explicitly deal with the position of third parties who acquire property with knowledge of the restraint, and so it would appear that such parties would, despite their knowledge, not acquire subject to the restraint. Rental restrictions in a condominium structure seem to be more acceptable, because such clauses do not limit the owner in receiving fair value for the unit (as would be the case with a restriction on alienation).

Metalegal formants

Contractual restrictions on alienation are rare in the Croatian business and housing environment. As a result of developments after World War II private ownership was severely restricted, and additional restrictions on selling would have been highly unorthodox in an already restrictive legal environment. Additionally, the social equality promoted as a socialist value and the allocation of property was such that there was little room for the creation of closed groups or neighbourhoods buttressed by restraints on alienation or even on renting. The present cultural milieu has not changed in that respect, so such restrictions (even if in accordance with anti-discrimination laws) would be considered unusual. A rental restraint might be considered acceptable in cases where the resident owners are reluctant to accommodate a high turnover of occupants in a particularly valuable building. In such a case there may be legitimate concerns, such as the ongoing maintenance of the property (long term residents are more likely to be attentive to maintenance.).

Denmark

Operative rules

(a) The Law on Owner Apartments stipulates that each condominium unit in Denmark is an independent real estate which can be freely disposed of by its owner (§ 4(1)). The first provision, which prohibits the sale of condominium units to lesbians, would be void as it violates Danish law on anti-discrimination.105 The second provision restricts the transfer of the unit without the approval of the management body. Danish law recognises that the free disposal of a unit may be restricted in special by-laws adopted by the owners’ association and thus it can be laid down in by-laws that the transfer of the unit requires the consent of the management body. If this is the case, a refusal to allow the transfer of the unit to Anne will only be valid if it is based on an impartial and objective ground and aimed at protecting the interests of the condominium community as a whole.106 Therefore, if the refusal is based on a suspicion that Anne is a lesbian, the refusal will not be valid and the transfer to Anne will take effect regardless. A refusal to accept new owners into a condominium scheme is rare in

105Consolidated Law on the Ban on Discrimination of 1987 § 1.

106Blok, Ejerlejligheder (1995), p. 126.

cleaning and their obligation not to violate any house rules. A by-law completely banning letting must almost certainly be adopted unanimously by all owners if it is to be valid and enforceable.

(c) It is again the function of the owners’ association to decide whether there should be such restrictions of unit owners’ free right of disposal. The granting of a right of pre-emption to neighbours in the statutes or - by-laws is not as restrictive as an absolute ban on letting and it may be valid if accepted by a simple majority in share value of the owners present and voting at a meeting.

Metalegal formants

Restrictions as envisaged in this case are generally left for the owners themselves to decide upon. If a majority decides that limits on the free right of disposal and of letting would be appropriate they are free to impose such measures on all owners in the condominium. However, if any restrictions adopted by a majority of the owners cause significant economic or personal prejudice to any one individual owner, any such owner could challenge such a decision in court. Naturally, any decision that violates any of the basic accepted values of Danish society that is taken by an owners’ association would be declared null and void by the courts.

England

Operative rules

(a) No commonhold community statement can prevent or restrict the transfer of a commonhold unit (CLRA 2002 s. 15(2)). The disputed clauses are invalid. Anne is obliged to notify the commonhold association of the sale of the apartment to her (Model CCS par. 4.7.8), but the association has no power to grant or refuse consent to the transfer and cannot refuse Anne entry into the condominium. On proof of a registered title to the unit, Anne may seek a mandatory injunction to compel her entry into her unit and to restrain any action by the directors of the association to prevent her access.108 Anne is not required to have initial recourse to the normal internal dispute resolution procedures, as this dispute probably constitutes an emergency (Model CCS).

108The clause also violates the Sex Discrimination Act 1975 s. 30(1) and is void for that reason.

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(b)There is nothing to prevent a CCS restricting, as by a local rule, the right of residential unit holders to let their units in addition to those imposed by law. This would not apply to an absolute prohibition, which appears to be void as an unwarranted limit on the right of a unit holder to dispose freely of their unit. Hence, a refusal of entry to Anne based on such a prohibition would be inoperative. If the lease term exceeds seven years certain it is invalidated (CLRA 2002 s. 17). In such a case, entry to the unit could be refused to Anne, unless either she or Maria had previously asked the county court to reduce the term to the permitted limit (s. 17(4)(a)). Maria cannot evade the rule by granting Anne a fixed term lease for an initial term within the permitted period and inserting a renewal clause, the effect of which, if exercised, would cause the maximum span of the term to exceed the prescribed limit (Commonhold Regulations 2004 reg. 11(1)). If Anne is refused entry on the ground of statutory invalidity she can demand the return from Maria of any deposit paid (s. 17(4)(b)).

(c)There is nothing to prevent Maria from conferring on Benjamin a contractual right of pre-emption of her unit, in which case a completed sale to Anne would constitute a breach, giving rise to an action for damages. At the same time, the legislation confers no right of preemption on commonhold unit holders –an attempt to do so would fall foul of the CLRA 2002 (s. 15(2)).

Descriptive formants

The CLRA 2002 and Commonhold Regulations 2004 provide the basis for the above answers.

Metalegal formants

(a)The ban on restrictions on transfer of a commonhold unit reflects

the traditional refusal of the common law to sanction any limits on the disposal of a freehold estate, both as a matter of principle,109 and of authority.110

(b)The lack of any statutory provision outlawing an absolute prohibition can be inferred from the fact that the legislation deals with limits on unit lettings, but by necessary inference not outright bans on lettings. The upper limit on lease length of a residential unit was

imposed owing to fears that if long leases of units were permitted, a mix of freeholds and long leases would exist,111 which a commonhold,

109 Megarry and Wade, The Law of Real Property (2008), pp. 66–7.

as a species of freehold, aims to avoid (CLRA 2002 s. 1(1)(a)). It may be important to discourage unit holders in a high class scheme from allowing potentially disruptive persons into their units, but the legislature did not outlaw the granting of holiday lettings or licences by unit holders. Such a prohibition can evidently be imposed by a CCS, which could set out the letting policy of the scheme applying to all units.112 Any resulting interference with the freedom of disposal of a unit holder at common law would seem to be de minimis.

(c) The fact that Benjamin is a fellow unit holder is not an objection as the market price would be paid if he exercised his rights, so that it can be presumed that if he can afford it his finances should be solid from the point of view of the apartment community and their creditors. One concern might be that once Benjamin has exercised his right of preemption, he will have increased his voting power within the scheme. The weak role assigned by the CLRA 2002 and regulations to commonhold association meetings reduces the impact of this particular aspect.

Estonia

Operative rules

(a) Under Estonian law the membership in the community of apartment owners or apartment associations depends solely on the fact of ownership, and not on a decision of the other apartment owners or the management body. Thus it is only important to ask if Anne had become an owner of the apartment. Apartment owners may, by an agreement, regulate the use of apartments and the common property (Law on Apartment Ownership § 12), but they are not in position to restrict an apartment owner’s freedom of disposal or make it contingent on approval by the management body.113 The Law on General Principles of Civil Law 1994 provides that any transaction violating a restraint on disposition, imposed by a court ruling or by any other authority or a lawfully entitled official, is null and void (§ 88(1)). But the community of apartment owners is not regarded as an authority or official who could affect the validity of sales contract under question. In contrast, Law on General Principles of Civil Law 1994 provides further that if the right to dispose is precluded or restricted by an agreement, the contravention of such agreement does not render the disposition void and that the

112Clarke, Commonhold, pp. 15–30.

113Pa¨rna, Korteriomanike u¨hisus: piiritlemine, ˜igusvo˜ime, vastutus (2010), p 163.