Экзамен зачет учебный год 2023 / European Condominium Law

meetings unless they have been appointed as proxies by their landlords. The resolution would therefore be valid if adopted by the required majority for inclusion as a new conduct rule.853

Descriptive formants

The entitlement to vote at general meetings must be deduced from the provisions of the Act and the model rules.

Metalegal formants

The exclusion of tenants from attendance and the right to vote at the general meetings, in particular in relation to matters that concern them intimately, has been criticised.854

Spain

Operative rules

Only owners can vote at the general meeting, as is reflected in the designation of the general meeting as the junta de propietarios. Tenants are therefore not entitled to vote at general meetings unless they have been appointed as proxies by their landlords (Law on Horizontal Property art. 15). If a usufructuary has the right to reside in or occupy the apartment or office unit, the bare owner (nudo propietario) has the right to attend and to vote at the general meeting (art. 15.1 par 3). However, if the bare owner does not express any contrary wishes, the usufructuary will act as his representative at the general meeting. The usufructuary will, however, still require an express authorisation to vote on the matters listed in art. 17-1 and for extraordinary works.

Descriptive formants

The Spanish Law on Horizontal Property restricts the entitlement to vote at general meetings to owners and does not allow tenants or even usufructuaries to vote unless tenants are appointed as proxies and usufructuaries receive the tacit consent or express authorisation from their bare owners.

853Challengeable perhaps as not reasonable under s. 35(3) of the Act.

854Van der Merwe and Mertens, ‘Behoort die Besluitnemingsproses op die Algemene Vergadering van ‘n Deeltitelskema meer Demokraties te wees?’ (1994), p. 1 ff.

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implemented by the manager or the general meeting. If the expenses fall outside the approved plan then the works may still be carried out if supported by a special majority vote, and owners may appeal to a cantonal judge857 if consent for repairs and renovations are withheld unreasonably.

(a) Two issues must be resolved with regard to the painting of the building. The first issue is whether repainting the building falls within the category of proper maintenance and, if so, whether repainting the building with expensive gloss paint goes beyond what can be classified as proper maintenance. The second issue is whether a resolution is needed for the work to begin or whether the group of owners can approach the court directly to force the management body to do the necessary repainting.

Most jurisdictions consider a proposal to repaint the outside walls of the building with paint of comparable quality as a matter of normal and regular maintenance, which requires a simple majority vote at the general meeting.858 The Spanish report classifies this as necessary maintenance and repair works specifically because the repainting is considered necessary to maintain the building in a safe and habitable condition and contribute to the proper conservation, use, security and accessibility of the building according to its nature and characteristics. In the Netherlands, the manager is authorised to decide on the repainting of the building and the lavishness of the paint used if these costs are within the normal approved budget. If they are not, but are considered to be normal maintenance, the general meeting can decide to undertake the maintenance by way of a simple majority.859

The Greek, Polish and Slovenian reports show that if the required majority cannot be attained but the work in question is essential for the maintenance of the property, any one apartment owner may request the court to grant an order for proper maintenance. Slovenia is unique in this regard in that the court may be approached in less expensive non-contentious proceedings. In Greece, any owner can initiate the repainting works as necessary for the maintenance and renewal of the common property, because repainting neither harms the rights of other owners nor alters the intended purpose of the common

857In Slovenia, the matter is settled in court by non-contentious proceedings

858Austrian, Catalan, Estonian, German, Dutch, Norwegian, Portuguese, Slovenian, Croatian and Swedish reports.

859German and Spanish reports.

property. The owner initiating the repairs is subsequently entitled to claim a contribution from the other owners in proportion to their quotas.

Some jurisdictions advance reasons as to why repainting with expensive gloss paint could fall within the limits of ordinary maintenance. The Norwegian report suggests that maintenance may to some extent properly include modernisation,860 while the South African report indicates that recent case law has opened the door for reasonable upgrades of the material used for repairs to qualify as ‘maintenance’. Similarly, the German report suggests that repainting with gloss paint could fall under the concept of ‘modernising maintenance’ (modernisierende Instandsetzung), for which a simple majority is sufficient, since the reforms of 2007. The Croatian reporters suggest that if there are special justifications for using a particular type of paint, such as paint matching the original paint used (this may be required by certain regulations on building preservation), the decision might still fall within regular maintenance, and a majority resolution might suffice.

The English report suggests that the work needs to be completed to a standard embodied by the latest modern equivalent, but not to enhanced standards. The probable result is that if the paintwork can be properly renewed with the latest ordinary paint rather than with more expensive and luxurious gloss paint, the former type of paint should suffice to comply with the statutory obligation of the association. In Sweden, there is no limit on the amount that may be expended on repairs as long as the expense is financially justified in view of the statutes of the association.861 It is interesting to note that the Spanish condominium legislation provides that in the event of a dispute over the nature of the works that have to be carried out, the owners’ meeting (and not the manager) will decide on the matter.862 The provision also allows the interested parties to request arbitration or obtain a technical report to settle the dispute.

Most jurisdictions, however, classify repainting with expensive gloss paint as beyond the scope of ordinary maintenance. Instead, it is regarded as an improvement that requires a special majority.863

860The Polish report includes not only current maintenance and repairs under the term ‘management’ but also modernisation and other more substantial changes to the building.

863Catalan, Estonian, Dutch, Irish, Portuguese, Scottish (under the DMS), Slovenian, South African and Spanish reports.

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Moreover, the Greek report indicates this would need the unanimous consent of all the owners, unless it is stipulated in the by-laws that a majority resolution is sufficient for all acts of management and administration.

The second issue regards whether a resolution is needed for the work to begin or whether the group of owners can approach the court directly to force the management body to arrange the necessary repainting. The Greek, Polish and Slovenian reports show that if the required majority cannot be attained but the work in question is essential for the maintenance of the property, any one apartment owner may request the court to grant an order for proper maintenance. Slovenia is unique in this regard in that the court may be approached in less expensive non-contentious proceedings. The South African report notes that because the duty to repair is a mandatory function of the management body, any owner could approach the court for a mandamus to compel the management body to perform this function, failing which he would, in appropriate circumstances, be entitled to damages based on the neglect on the part of the management body to undertake necessary repairs. In Greece, any owner can initiate the repainting works as necessary for the maintenance and renewal of the common property, because repainting neither harms the rights of other owners nor alters the intended purpose of the common property. The owner initiating the repairs is subsequently entitled to claim a contribution from the other owners in proportion to their quotas.

(b) Most jurisdictions would consider the installation of a lift in the building as an improvement rather than mere maintenance and that a certain degree of approval on the part of the owners must be attained in order to give effect to such a measure. Certainly, a unanimous vote at the general meeting would entitle the group to effect the installation,864 as would obtaining the consent of all the apartment owners by other means.865 It is also possible that a qualified resolution866 would be sufficient. The Portuguese report qualifies this with a proviso that individual units or the common property must not be adversely affected by such installation.

864Greece, South Africa (if the installation is regarded as luxurious) and Scotland (under a TMS).

865Estonian report.

866Austrian, Danish, English, French, German, Norwegian, Portuguese, Scottish (under DMS), Slovenian, South African (if the installation is regarded as non-luxurious), Spanish and Swedish reports.

The English and Irish reports take a somewhat blunt approach in that they regard an ‘improvement’ as the addition of a new item not present originally. The Estonian report concludes that the installation of a lift exceeds regular construction and maintenance work, while the Norwegian report describes it as a modernisation measure exceeding the limits of maintenance. The Swedish report takes a fairly extreme view, suggesting that the installation of a lift constitutes a reconstruction of the building. This view is based on the fact that the addition of a lift represents an acquisition by the real estate cooperative association, which can in turn affect a member’s right to his or her apartment. The French and Swedish reports further require the consent of the owner concerned if the installation of the lift encroaches on any part of an apartment. Additionally, the Swedish report states that the approval of the Rent Tribunal is also necessary. The Dutch and Slovenian reports contend that the installation of a lift in the building will normally require an alteration of the layout plan of the building, and therefore an amendment of the deed of subdivision, which requires the unanimous consent of all the owners. In Ireland, the installation of a new lift can only, it would seem, be authorised by an express term in the long leases of the scheme empowering the OMC to carry out major improvements to the common parts. In principle, this would need to be budgeted for in the annual report as non-recurring expenditure for that year, and subsequently approved at the general meeting.

The cost of the installation of the lift will normally be borne by the owners in proportion to their share values. The English report suggests that if the scheme does not have a reserve fund, the association may be obliged to establish such a fund and the directors to set a reserve fund levy on all unit holders. The Italian, Portuguese and Spanish reports indicate that dissenting owners are not obliged to contribute towards the costs of the installation and maintenance of the lift as long as they do not make regular use of the lift. The position is similar in Portugal, although dissenting owners may be forced to contribute if their dissent was unjustified. If the installation of a lift is unnecessary or disproportionately luxurious for the scheme in question, it is likely that such dissent will be considered reasonable.

As an exception to the general rule, the Catalan legislation provides that an ordinary majority resolution suffices to initiate the installation of the lift. This strikes a chord with the Catalan legislator’s policy of facilitating the modernisation of condominium buildings and of removing outdated features. It is noteworthy that residents with

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physical disabilities may request the court to force the community of owners to remove physical barriers or install lifts if the required majority is not attained. Similarly, special Italian legislation specifies that resolutions of the general meeting intending to eliminate architectural features of the building that impede access to handicapped persons may be approved by a majority vote that is lower than the majority required for modernisation in general. German law seems to support this idea, but only if there are disabled owners who dearly need a lift. The Greek report takes the view that if the installation of the lift can be classified as a necessary repair (for instance, if there was no staircase in a certain wing of the building) and does not change the form and substance of the building, any of the owners are entitled to install the lift and claim contributions from the other owners to cover their expenses. Croatian law accepts that because an elevator is directed at facilitating the access and movements of individuals with limited mobility, unanimity is not required and such a change can be financed out of the common fund if such costs do not jeopardise regular maintenance and do not cause undue harm to the minority.

(c) As to whether the owners of units on the top storey may install a solarium on the roof for their exclusive use, the default position in Scotland is that the roof belongs to the owners of the top floor who are accordingly entitled to erect a solarium on the roof. The cost of such installation and its future maintenance is of course borne by the owners of the top floor themselves.

In the remaining jurisdictions the roof forms part of the common property. The installation of a solarium on part of the common property involves the construction of a new facility,867 which does not fall within the scope of regular administration.868 Most jurisdictions therefore require a special majority869 or unanimity870 for such installation. In Spain, such a construction was regarded as an alteration that required an amendment of the constitutive title by a unanimous resolution until June 2013; since then, the alteration itself could be passed by a three-fifths majority (art. 10.3.b), but allowing the exclusive use of the solarium for the top storey owners would still require a unanimous resolution. In Sweden, a solarium would involve an amendment of the by-laws, which would require unanimity or a special resolution.

869Austrian, Catalan, Danish, English, Irish, Norwegian and Polish reports.

870German report.

It is worth mentioning that Poland recognises the need for minority protection in that any owner may approach the court to argue that the aim of the resolution was purely to satisfy the needs of certain influential owners’ private needs. Such an owner may legitimately claim that his financial interests have been prejudiced as a result.

The Greek report homes in on the issue of exclusive use, and points

out that this amounts to an abuse of law in that it inhibits the free use of the common property by all of the owners.871 Similar views are

found in the Swedish report, which expresses doubts whether this would be in line with generally accepted principles of company law or the purpose of a residential real estate cooperative. The association must treat all members equally and a decision that results in an inappropriate advantage to certain members or is prohibited can be set aside judicially.

Notwithstanding the arguments above, the jurisdictions of Austria, Catalonia and Estonia allow such exclusive use if duly approved by the unanimous consent of all the owners, while in France a special majority is sufficient. The Danish and Polish reports would also permit exclusive use, suggesting that the owners’ association may grant a lease of the solarium to owners of the top storey, or alternatively demarcate the solarium for the use of the owners of the top storey.

In actual fact, an exclusive use of certain common elements is accepted in numerous jurisdictions. However, it is generally conditional on certain events. In Denmark, a unanimous resolution accompanied by an amendment of the by-laws is required, and the same is true in Spain. In England, an amendment to the local rules of the CCS is needed, while the prerequisites in Spain and South Africa are an amendment of the constitutive title and the sectional plan respectively.872 In Ireland, there is nothing to prevent a developer from empowering the owners’ management company to create a special use area in the set of house rules in favour of top-floor unit holders.

Assuming the solarium is agreed upon it is worth giving some thought to the owners’ respective liability for its construction and upkeep. In principle, the new solarium remains the property of the association in England and part of the common property in other jurisdictions. The association or the owners collectively are therefore responsible in proportion to their share values for the installation and

871Cf. Dutch report, which quotes one case to the contrary.

872See further the complicated procedures mentioned in the Slovenian report.

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maintenance of the solarium. However, it stands to reason that the remaining owners would only vote in favour of the resolutions required if they are rewarded financially, and certainly only if the benefiting owners undertake to pay the cost of the installation and future maintenance of the solarium.873 In Croatia, it is accepted that if the top storey unit owners are prepared to finance the improvement themselves, and represent the majority in terms of share values, they can proceed with the solarium improvement, as such a modification clearly does not harm other unit owners.

In Ireland, provisions may be necessary in owners’ leases for a re-allocation of the proportion of service charges to be paid by the owners who benefit from a new exclusive use area. In England, the potential unfairness of the situation can be mitigated by the association passing a resolution adjusting the percentage allocation of assessments of the unit holders on the top floor to reflect their exclusive benefit from the area.

(d) The dilemma in the scenario where the building has become so outmoded the some owners want the scheme terminated is that most condominium legislation caters for the reconstruction or termination of a condominium only in the case of destruction of or damage to the building by natural disaster,874 but not for the case where the building has become obsolete or old-fashioned.875 In Greece, the building must be damaged to the extent that more than three-quarters of its value is diminished,876 but the reporter is quick to emphasise that the legislation refers to physical destruction or damage rather than notional devaluation on account of obsolescence.877

873The Danish, Portuguese and Polish reports also hint at this. The Norwegian report suggests that it would normally be contrary to the rules regarding minority protection if all owners were to pay for an installation that would exclusively benefit a limited group of owners.

874Catalan, French, Italian, Greek, Dutch (where the cantonal judge on application may order that the deed of subdivision shall be amended or cancelled unless the scheme is expected to be repaired within a reasonable period of time), Scottish, Slovenian (where the condominium is terminated automatically and the land and ruins held in co-ownership shares thereafter), Spanish (where termination apparently takes place automatically on destruction unless a resolution to reconstruct is approved unanimously; destruction is interpreted to occur when the re-construction of the building would cost more than 50 per cent of the value of the building).

875The German report seems to suggest that the reconstruction of even an outmoded building falls within the obligations of owners.

876Portuguese report.

877The alternative Greek option for termination, namely, a unanimous resolution not to reconstruct the building if the damages relate to less than three-quarters in value of