Экзамен зачет учебный год 2023 / European Condominium Law

(c)that the resolutions were approved by the majority of owners present at the meeting and not by a majority of all the unit owners

Most jurisdictions provide that majority resolutions or resolutions that by law require a larger or special majority refer to resolutions

taken at a general meeting passed by the required majority of owners present or represented at the meeting.699 The English report makes

clear that this is the position even in the case of unanimous resolutions.700 A number of jurisdictions provide that any resolution (Austria) or certain specified resolutions701 are only valid if passed by

an absolute majority in number and share value of all the owners in

the condominium and not simply by a majority of owners present or represented at the general meeting.702 The Norwegian report mentions

that it is, in practical terms, well-nigh impossible to obtain the unanimous approval of decisions that need the consent of all of the owners or all affected owners. The Dutch and Slovenian reports both maintain that all that is required is approval from a valid majority of those present or represented at the meeting.

(d)that the resolutions were approved by the required majority

of owners signing a written document containing the resolution

In most jurisdictions, resolutions must be passed at a general meeting. It is therefore not possible to adopt a resolution by signing a document containing the resolution without a general meeting being convened. This is the position in Catalonia, Denmark, France, Portugal, Scotland, Spain and Croatia. In Catalonia, this aspect is further substantiated by the fact that, as a general rule, resolutions on motions that were not mentioned in the agenda accompanying the notification of the meeting may be challenged by any owner in the scheme.

Certain jurisdictions do, however, adopt a different approach. The Danish report observes that the general meeting can, subject to certain conditions, decide that resolutions may be passed in a way that deviates from the provisions in the Model By-Laws. In England, it is open to a commonhold association, as a private company, to opt for its decisions not to be taken at an annual meeting, but by written resolution. If the articles of association of an Irish Owners’ Management Company authorise the written resolution procedure, the company may have

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power to pass a resolution in writing signed by all the members for the time being entitled to attend and vote on the resolution at a general meeting. The written resolution procedure is also accepted in Belgium, Germany, Poland and Estonia.

The Slovenian report contains an interesting discussion of the details of the written resolution process. The document to be signed must contain the text of the proposed resolution along with an explanation, the name of each owner, the date of his signature and information as to the majority required to adopt the resolution in question. The resolution is adopted if signed by the required majority within three months after the first signature has been appended. The same document must be presented to all the owners to be signed consecutively or, alternatively, each owner is sent a separate copy of the document for subsequent collection.

The Austrian Law on Apartment Ownership and the Dutch Model By-Laws confirm that a resolution to which all owners have consented in writing (in the Netherlands, this includes consent by fax or e-mail), is valid without the need for a general meeting to be held, irrespective of whether the resolution concerned requires a unanimous or other kind of majority. In Greece, Portugal and South Africa a resolution requiring unanimity or a special majority (in Portugal, only a resolution requiring a unanimous resolution) may be adopted without a meeting being held if the required number of owners sign a written document containing the resolution.

(e) that the resolutions were approved by voting on a show of hands and not by voting proportionate to the quotas of the unit owners present

The issue here concerns whether resolutions at a general meeting can be approved by a majority in number (in other words a show of hands) or whether the share values of units must also be taken into account for the valid adoption of a resolution. The German and Estonian legislation adopts the most democratic approach, allowing decisions to be made by virtue of a majority on a show of hands with each apartment owner having one vote regardless of the number of apartments that he owns. Although the share values allocated to each apartment play a role in establishing a quorum, this is of no importance in the voting process. The English, Irish and Scottish legislation also favour a democratic voting process, envisaging two types of vote. The first is a show of hands, where each unit holder has one vote, and the second adheres

to the principle of ‘one unit, one vote’ meaning the holder of more than one unit would have more votes.703 Norway favours the ‘one unit, one vote’ approach, while Belgium and Sweden adopted the system of voting by share value as their default voting procedure for general meetings in residential schemes. The South African legislation apparently adopts voting by a show of hands as the default procedure based on the system of ‘one unit, one vote’. However, this democratic approach is checked to a large degree by the ability of the chairperson or any person entitled to vote to demand a voting by poll, which means that the weight of an owner’s vote is then determined by his quota (share value). Thus, in the event that a democratic vote does not find favour with the more dominant owners or chairperson of the condominium, they may well be able to reverse the decision.

Whereas most other jurisdictions favour the system of ‘one unit, one vote’ over the ‘one owner, one vote’ system, normally a majority in share value is required to pass a resolution.704 Some jurisdictions even require a majority in both share value and in number.705 A degree of flexibility is allowed in Denmark where the general meeting can decide to replace the requirement of a majority in share value with a numerical majority if inserted in the by-laws, while in Estonia the articles of association of an apartment association (if established) can legitimately change the voting procedure. Furthermore, in Poland owners with a share value of at least one-fifth of the total share value in the scheme may demand voting on the basis of ‘one owner, one vote’. In Ireland the articles of association of the Owners’ Management Company may choose another voting procedure for the scheme, and in Scotland the voting procedure can be changed in the founding documents of the scheme, or by a subsequent deed of variation registered in the land register with the approval of the general meeting.

(f) that 80 per cent of the owners appointed the chairperson as their proxy, which allowed him to pass all the resolutions according to his wishes

The main issue here is whether the number of proxies one person may accept should be limited in order to prevent a single individual

703The default voting procedure in Ireland and Scotland is ‘one unit, one vote’.

704Danish, German, Polish, Croatian and Portuguese report. The Norwegian legislation adopts this default procedure for commercial and mixed-use schemes.

705Catalan, French, Greek, Dutch, Slovenian and Spanish reports.

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effectively dictating the outcome of the voting process. Several jurisdictions do not limit the number of owners that one proxy can represent, and allow one person (usually the chairperson or a member of the management board) to agree to act as proxy for all the members who approach him with such a request.706 Formal requirements are set however: the letter of proxy must be in writing, in the required form, signed by the owner making the appointment and delivered to the chairperson in adequate time before the meeting.707 Some jurisdictions also contain restrictions on the persons who may act as proxies.708

The number of owners represented by one proxy may be limited in the by-laws (as is the case in Catalonia) or the constitutive agreement of a particular scheme (as is the case in Germany), or in domestic condominium legislation. Belgian and French law provides that any one person (including the chairperson and owners) may not hold more than three proxies, thus entitling him to vote on behalf of himself and a maximum of three other members.709 From 2011, the South African Act has disallowed a person from acting as proxy for more than two members. Finally, the Swedish report states that an authorised representative is only allowed to represent one member unless the matter is regulated otherwise in the by-laws.

The Danish reporter observes that although there is no ban on appointing the chairperson as proxy, it should be a directed (restricted) proxy mandating the proxy to vote in a specific manner. If the proxy is undirected, the resolutions of the association may be challenged on the ground that the chairperson did not exercise his vote impartially on a certain motion. This is an effective way of maintaining democracy while allowing for a wider ballot. Similarly, the Norwegian and Spanish reports indicate that the rules on disqualification resulting from a conflict of interests apply to proxies as well as to owners.

706Austrian, Catalan, Danish, Estonian, German, Greek, Irish, Dutch, Norwegian, Polish, Portuguese, Scottish, Slovenian and Spanish reports.

707Austrian and English reports.

708The French report, for example, mentions that an owner may not be represented by the manager, his or her husband or wife or civil partner, or any of his or her employees. See also the South African report. Note that Greek law allows a manager to act as proxy.

709Belgian law allows an individual to accept more than three proxies so long as the total number of votes he is exercising at the meeting does not exceed 10 per cent of the entire share value.

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notification period does not necessarily improve attendance at general meetings,712 shorter periods of notice are often acceptable, especially for urgent matters, on condition that members agree on the shorter period of notice.

Although notification by a simple telephone call or e-mail would not have the same evidentiary value or official quality as notification by registered mail,713 it is certainly less expensive and more in line with modern trends.714 Perhaps even notification by more informal means supplemented by posting the information on the central notice board should be considered sufficient.715 E-mails sent with read receipts would provide the necessary evidence of receipt. Logically, noncompliance with notification requirements should not render a decision voidable unless the mistake has a material influence on the outcome,716 and any member who attended the meeting should not be allowed to challenge any resolution on the ground of insufficient notification.

(b) Quorum

The quorum requirement is based on the idea that valid resolutions should only be capable of adoption once the majority of the owners (in number or value) is present or represented at the general meeting and has been given the opportunity to vote on the particular issue.717 The general apathy among owners towards attending general meetings prompted a reduction from the traditional quorum requirement of 50 per cent in some jurisdictions. Such a measure was seen as necessary to avoid delays in decisions being made, which is vital for the efficient management of the scheme (for example, it is thought to be in the general interests of the scheme that the adoption of the annual budget should be done swiftly).718

The acceptance of the company law mechanism allowing resolutions to be passed by whoever is present at a second meeting seems very undemocratic. In many cases this will allow the chairperson to pass such resolutions as he sees fit. It would be preferable for owners to be reminded that they are part of the management structure of a condominium and that it is their duty to attend the annual general meeting to let their voice be heard.

An alternative is to drop the quorum requirement, as has occurred in almost 50 per cent of the jurisdictions represented. The reason advanced in the French report is that the absence of a quorum facilitates the adoption of a number of practical majority resolutions such as the approval of the budget for the next year. The more important resolutions, such as resolutions requiring unanimity or an absolute majority, can only be adopted if the more stringent majority requirements are fulfilled.

(c)Is an absolute majority of all members needed for the adoption of resolutions?

Most jurisdictions allow for the adoption of resolutions relating to routine matters by a majority of the members present or represented at a general meeting. Given the purpose of a general meeting is to engage in a discussion prior to the proposed resolution being put to the vote, it is only just that the attendees should effectively represent the electorate. All members will have received prior notice of the meeting and they will have had the choice of participating in the meeting. If they have opted not to attend, they have implicitly accepted the possibility that binding resolutions may be adopted at the meeting without them and will thus be unable to challenge such resolutions.719

It is important to stress, however, that a weighted majority is required for resolutions720 on matters going beyond the routine man-

agement of the scheme, such as extensive scheme maintenance and alterations to or improvement of common elements. A special resolution is required for such decisions. The more stringent requirements

are designed to safeguard against dominance by a small band of overzealous owners attending meetings.721

(d)Acceptance of a resolution by signing a document containing

the resolution

Jurisdictions that put a premium on the arguments raised and the discussions that take place at general meetings only regard resolutions adopted at a general meeting as valid.722 Other jurisdictions contend that it is in the interest of the smooth functioning of a condominium

719Estonian, French and Greek reports.

720This includes unanimous and special resolutions requiring an absolute majority of all

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that resolutions may also be approved by the signing of a document containing such a resolution, as is permitted under company law.723 The Irish report suggests that such a mechanism would assist the efficient management of smaller Owners’ Management Companies, because calling a formal meeting for all decisions can seem expensive and unnecessarily bureaucratic.

In Portugal and South Africa, this notion was introduced to facilitate the passing of unanimous and special resolutions. In Spain, a similar outcome was achieved by making it possible to obtain a unanimous or special resolution by including abstinence (lack of an objection) as a tacit vote in favour of the resolution. In this regard, the Polish mechanism of allowing votes to be collected from nonattendees to achieve the desired majority constitutes a somewhat less painless alternative.

(e) Voting by a show of hands

By allowing votes to be cast by a show of hands, lip service is paid to the democratic principle of ‘one owner, one vote’. This principle is, however, neutralised by any provision that the formal statements showing the results of a show of hands must also indicate the proportion of the total share value of the scheme represented by votes of owners who voted in favour of the resolution.724 In other jurisdictions, the numerical majority resulting from a show of hands can be challenged by a demand by any owner that the majority should be recalculated according to share value.725 This again undermines the democratic fac¸ade created by allowing a show of hands in the first place.

Certain other jurisdictions require a majority in both number and share value for the adoption of most resolutions, which make voting by a show of hands ineffective by itself. All of this serves to highlight the fact that the law has chosen to favour persons with the greater share value, namely, persons with a greater financial investment in the scheme, at the expense of the democratic principle of ‘one owner one vote’.726 The Irish report adds that in a development where unit sizes are unequal it may be fairer to allow owners of larger units to have a greater say in resolutions concerning financial issues, and observes that the only advantage of voting by show of hands is that a

726 Greek and Portuguese reports.

swift resolution can be attained if owners are overwhelmingly in favour of a motion.

Notwithstanding the above, there is certainly an argument for regulating social life in a condominium by the democratic principle of ‘one owner, one vote’ rather than the weight of a vote being based on financial investment in the scheme. In condominiums, community interests should sometimes take precedence over individual financial interests and unit majorities. Voting by a show of hands should at least be prescribed for the election of the members of the management board and for the adoption of new by-laws concerning the use and enjoyment of units and the common property.727

(f) Voting by proxy

The appointment of proxies is a mechanism imported from company law to bolster poor attendance at general meetings, and primarily to ensure that the meeting is quorate.728 Although the right to vote is not regarded as so fundamental that it cannot be transferred, one would assume that the ordinary owner would at least want to pass on instructions as to how he would like his vote to be exercised. Unfortunately, however, most official proxy forms contain only a general or undirected proxy and do not provide for such an option. The result is that most proxies are appointed as general proxies giving them a

carte blanche on how they want to exercise the vote transferred to them.729

In order to avoid one person being entitled to a sufficiently large number of votes to control the outcome of the vote on every resolution,730 the number of proxies one person may hold has been restricted in France and most recently in South Africa. The only alternative is to allow only directed proxies, compelling every member who appoints a proxy to give clear instructions on how the proxy should vote on every proposed motion. This would of course still impair

democratic discussions of motions at general meetings before the vote is taken.731

729English report or the pouvoir en blanc mentioned in the French report.

730The Norwegian report warns against the risk of abuse of power by officers of the scheme.

731Greek, Portuguese and Spanish reports.