Экзамен зачет учебный год 2023 / European Condominium Law

board for permission to use a part of the garden. Permission is not sufficient to establish an exclusive use right. Frank will need to enter into a rental agreement with the management body, which would allow him to use a demarcated part of the common property to establish such a right (Law on Real Estate Cooperatives Ch. 1 s. 4)

Frank’s children may play football in a corridor inside the apartment, as long as they do not disturb the neighbours. The same applies if the corridor is part of the common property. As long as the children do not disturb residents, obstruct passers-by and do not adversely affect the property (for example by damaging things) then it is permissible. In any event, it is probably not possible to play football in a quiet way. In the absence of special legislative provisions, this matter is covered by the general provision about good behaviour and the duty to maintain soundness, healthiness and order in an apartment and the surroundings and to keep the apartment in good condition (Ch. 7 s. 9).

It is not permissible for Anusha to put a satellite dish on the roof of a cooperative building that consists of several apartments. A member of a real estate cooperative association is only allowed to make changes in her own apartment (Ch. 7 ss. 4 and 12). Consequently, Anusha will need permission from the association to attach the satellite dish. On the other hand, if the real estate cooperative consists of separate housing units with each member occupying a separate unit, this would be permitted.

Herman: The Law on Real Estate Cooperatives allows a member to let his apartment with the approval of the management body or the Rent Tribunal (Ch. 7 ss. 10 and 11). A sublease will only be approved on very limited grounds, for instance, if the member must go abroad for work or study purposes. If the tenant causes disturbance to the neighbours or causes damage to the apartment, he will have to leave either immediately or at short notice. If Herman does not take any action to remove the tenant, he himself runs the risk of losing his membership of the real estate cooperative and forfeiting his right to the apartment (Ch. 7 s. 18).

Ian is not permitted to excavate a cellar beneath his ground floor apartment and in doing so runs a serious risk of having his membership of the real estate cooperative forfeited. A member does not have the right to occupy parts of the land for his own purposes and obtain an exclusive right to that spot. Furthermore, a member of a real estate cooperative association is only allowed to make changes inside his own

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apartment without affecting the common property (Ch. 7 ss. 4 and 12). Consequently, Ian will need the association’s permission to do this.

Descriptive formants

The interpretation of the rules in question is in practice influenced by legislation and case law concerning tenants. This ensures that the rules on the use and enjoyment of units are more or less the same irrespective of the form of housing concerned.

Metalegal formants

It should be noted that the matters discussed above are not exclusively regulated by the Law on Real Estate Cooperatives. Supplementary rules will, for instance, be found in social legislation, legislation concerning the planning and development of real estate, criminal law and general principles of company law.

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(a) The remedies available to management bodies are, in most jurisdictions, restricted to ordinary court proceedings for the collection of outstanding contributions.500 If the defaulter is in a position to pay, the management body in England is not obliged to attempt to resolve the matter internally before resorting to court proceedings. Conversely, in Ireland the management body is obliged to first look to mediation and must inform the court that it has done so before instituting a personal action for the payment of service charges.

Other jurisdictions have introduced a swifter procedure for the collection of outstanding contributions.501 In addition to authorising the management body to demand payment of contributions in advance, the French amending legislation of 2002 allows the management body to appeal to the President of the High Court to order payment if the defaulter does not respond within thirty days to a formal letter of demand sent by registered post. In Italy, the professional manager has the power to obtain an immediately enforceable, qualified writ of execution for arrears even in the face of a challenge by the unit owner concerned. In Germany, the manager must acquire a title of execution either by ordinary court proceedings or from a notary if Edmund has signed a notarised title of execution regarding any future arrears with the payment of assessments. Some scheme constitutive agreements contain an obligation for every owner to render such a notarised title to the manager of the common property in advance to lower the risk of a subsequent shortfall in payment. In Portugal, the record of a resolution of the general meeting approving monthly payments and their allocation among owners is treated in court as a writ of execution entitling the manager to attach the defaulter’s assets in order to recover the debt. Slovenian law allows a summary execution process against the defaulter if he does not respond to a written warning coupled with an extended term for payment of the debt. To avoid time-consuming and costly court proceedings, recent South African legislation allows the management body to approach the newly created Ombud Service for an order for the payment of outstanding contributions.

In order to encourage prompt payment of contributions, most statutes allow management bodies to charge a high rate of interest on

500Belgian, Danish, Greek, Dutch, Norwegian and Scottish reports.

501Polish and Spanish reports. In Germany, the owner is frequently required to sign a notarised title of execution, which makes a hearing establishing such a title unnecessary.

arrears.502 Furthermore, defaulters are forced to pay collection costs, all legal costs (including attorney and client costs) and in some jurisdictions expenses and loss suffered through the late collection of arrears.503 This should make the solvent defaulter think twice before failing to make payments.

A certain number of jurisdictions resort to fines to discourage owners from defaulting on contributions. The Portuguese legislation allows the general meeting to impose penalties for delays in payment of up to a maximum of 25 per cent of the annual contributions that a defaulter is obliged to pay. Italy is the only jurisdiction that allows the professional manager to cut off services to Edmund’s apartment, provided that such action is permitted in the by-laws of the condominium.

The Catalan, Spanish and South Africa legislation respectively provide for the suspension of a defaulter’s voting rights at general meetings.504 Indeed, the Spanish and Catalan reports go a step further and prohibit the defaulter from challenging any decisions of the management body. The South African position is far more lenient. Not only is the defaulter allowed to attend and speak, or his or her mortgage creditor allowed to act as his or her proxy, but the suspension of voting rights applies solely to ordinary resolutions and not to unanimous or special resolutions.

A number of jurisdictions resort to the somewhat harsher measures of either forcing the long-term defaulter to sell his unit or to deny the defaulter the use and possession of the apartment.505 Estonian law provides that the management body, authorised by a majority vote, may demand owners who have defaulted on their payments for nine consecutive months to sell their units. If this does not happen, the management body may approach the court for a forced sale of the unit. In the case of fundamental non-performance, Norwegian law provides that the other owners may demand that the defaulter sell the unit within six months, following which a forced sale can be sought. The Polish law allows unit owner to deal with a continuous defaulter by way of a forced sale executed by a bailiff of the court, which will also deprive the defaulter of his right to a dwelling guaranteed by the local

502German, English, Estonian, Irish (interest penalties in house rules), Dutch and South African reports.

503Irish, Dutch, Portuguese, South African and Spanish reports.

504In Germany, not even the scheme’s constitutive agreement can validly disenfranchise any owners who are in default.

505German, Croatian and Dutch reports.

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authority concerned. In a similar vein, Slovenian law allows owners with a combined holding of more than 50 per cent of the total co-ownership share in the scheme to commence court proceedings against the defaulter, in order to exclude him by way of a forced sale from his apartment. Swedish law, however, contains the most draconian enforcement measure: after a delay of just one week, the real estate cooperative association may serve the defaulter with a notice to leave. If payment is not received within three weeks, the defaulter’s share would be forfeited and he would be powerless to prevent a forced sale of his apartment by the Enforcement Officer.

(b) If a defaulter is in arrears with his mortgage payments in addition to his contributions to the management body, the issue boils down to the ranking of the respective claims of the bank and the management body. In such a case, the claims of the two creditors can normally only be satisfied by the attachment of the unit of the defaulter and a sale in execution by public auction. In such a sale the mortgage creditor (Bank A), by reason of his real security right, ranks prior to the management body, which will only be paid out after the bank has been satisfied in full from the proceeds of the sale.506 In the event that the proceeds of the sale prove insufficient to fully repay the management body, their personal claim against the defaulter remains507 and can be satisfied by attachment of the defaulter’s salary.508 While in theory either the management body or the bank may initiate proceedings for a forced sale, in practice the bank is more likely to do so because the mortgage deed provides an instant executory title to the mortgage creditor.509

Some jurisdictions, however, afford additional protection for the claim of the management body through improving the ranking of the management body by a statutory preferent claim or ‘superlien’ (gezetsliches Vorzugspfandrecht) in favour of the management body to trump the security right of the mortgage creditor. Interestingly, the Danish Model By-laws allow the management body to register a mortgage over every unit for an amount of €5,500 covering arrear payments, interest and collection costs. This mortgage also covers any payments owed by unit owners to the management body for repairing and cleaning

506Danish, Estonian, French, Greek, Italian, Portuguese, Scottish, Slovenian, Croatian and South African reports. Dutch law ranks the claim of the management body after the claim of the mortgage creditor but prior to the claim of concurrent creditors on account of the management body’s statutory privilege for unpaid assessments.

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but does still need to be registered. The second legal charge, which is utilised more frequently in practice, is a legal privilege ranking above all other creditors (including prior mortgages) securing certain claims of the condominium against the defaulting owner. The privilege arises automatically by operation of law and needs not be registered. It automatically gives priority to claims against a defaulter for the current and two previous years. The claims of the condominium that arose three or four years previously are treated on the same footing as the claims of the mortgage creditor, while older claims rank behind the claim of the mortgage creditor and are simply treated as concurrent claims.

Through interpretation of domestic insolvency legislation, South African case law protects the timely payment of contribution to the management body if the court proceedings are initiated against an insolvent defaulter. The Sectional Titles Act places an embargo on the transfer of a unit to purchasers (including purchasers in sales in execution) unless a conveyancer certifies that all amounts due to the management body have been paid. The South African Supreme Court has held that this embargo creates an effective privilege in favour of the condominium since the payment of the outstanding debt before the unit can be transferred must be treated as part of the ‘cost of realisation’ of the assets of the insolvent owner, which must be distributed among his creditors. The court however emphasised that the same argument would not apply in the case of a solvent defaulter, and that the claim of a prior registered mortgage would rank higher than the claim of the management body in such a case. Thus the South African protection in relation to contributions is not as robust as those in some of the European jurisdictions discussed above.

With regard to the legal position on sale and transfer of a unit to a purchaser (Kenneth), the ordinary rule is that the debts of the seller (or the burdens of the lease covenants in Ireland) only pass to the purchaser on the transfer of the unit.511 Some jurisdictions, however, construe the outstanding debt of the seller as a real burden on the unit, which burdens the unit notwithstanding the transfer to Kenneth. This is the position in Austria, Germany, Italy,512 Norway and

511Greek, Swedish and South African reports. If Kenneth pays Edmund’s debt to prevent the share being sold by the Enforcement Officer, he would have a claim against Edmund’s estate for reimbursement. The Belgian report notes the expenses for which the purchaser would be liable on transfer of the unit.

512In Italy, Kenneth will however have a right of recourse against Edmund for payments made on his behalf, as his liability is joint and several with Edmund’s.

Portugal513 and, according to some Polish academics, also in Poland.514 In Spain, the automatic privilege that burdens the unit is taken to be transferred to Kenneth on transfer making him liable as guarantor of Edmund’s debts, while Edmund will remain personally liable for his debts.

Certain jurisdictions adopt a system of advance notice of debts due to the management body. In England, Kenneth can request Edmund to furnish him with a community statement detailing the arrears owed by him. On registration of the unit in his name, Kenneth will be held personally liable for the amount recorded in the statement. Similarly, Danish law requires the seller to disclose to the purchaser whether assessments have been paid and to provide information about the financial state of the condominium. Kenneth is then liable for arrear assessments once the unit is registered in his name. Under a Development Management Scheme in Scotland, the manager, if requested, must certify the maximum amount of the unpaid service charge and after the transfer the purchaser will not be liable for more than that amount. A prudent purchaser in these jurisdictions is therefore advised to enquire about the debt owed to the management body, and reduce his bid accordingly.

In Slovenia and Estonia (if an apartment association has been opted for) the purchaser steps into the shoes of the seller and is liable for the arrears accumulated by Edmund. However, in Slovenia this is construed as a joint and several liability (in solidum) on the part of Edmund and Kenneth, which means that Kenneth could have recourse against Edmund after payment of the debt, unless of course the contract of sale provided otherwise. In the Netherlands, the seller and purchaser are held jointly and severally liable for the arrears of the seller once the unit is transferred to the purchaser. However, the purchaser is protected by a provision in the by-laws to the effect that the seller will not be held accountable for a larger amount of the debt than that recorded by the notary who handles the sale. Once the purchaser has paid the debt, he would have recourse against the seller for the amount paid in the absence of contrary provision in the contract of sale.

513Some Portuguese authors argue that payment of expenses is a personal obligation that goes with the use and enjoyment of the unit, and arrears accumulated while Edmund had the use and enjoyment of the unit should be borne by him.

514The prevailing view in Poland is, however, that these obligations are purely personal in character. In Croatia, a lien registered against Edmund’s unit for outstanding contributions would also bind Kenneth after transfer of the unit to him.