Экзамен зачет учебный год 2023 / European Condominium Law
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interested and the proceeds of the sale used to fill the coffers of the management body.
(d) The termination of the condominium regime requires either complete destruction of or substantial damage to the building, or a unanimous resolution not to reconstruct a damaged condominium building. The justification for such strict requirements is that residential condominiums serve the housing needs of the population and should therefore be as permanent as possible. The same justification is not so evident in the case of a shopping centre structured as a commercial condominium. In such a case economic obsolescence of the building should also be considered a factor that could lead to termination of the particular kind of condominium concerned.
Ireland
Operative rules
The OMC is required to place before the owners’ annual meeting an annual report setting out a statement of the annual service charge and the basis of such charge as well as a statement of the projected or agreed service charge for the budget period (Multi-Unit Developments Act s. 17 (2)(d) and (e)). There must also be a statement regarding any planned expenditure on the refurbishment, improvement or maintenance of a non-recurring nature that is planned for the current year (s. 17(2)(f)).
(a) The leases of each unit would normally render the OMC liable to keep the structure and exterior of the scheme building in a good state of repair and condition and to maintain it and the common parts of the scheme as assumed by the Multi-Unit Developments Act (ss. 1, 17 and 18). An obligation to paint may be treated as separate from an obligation to repair and maintain.931 If the management company is liable to repaint the building, their covenant to repair and maintain must, in terms, impose an express obligation to repaint the building. Only if repainting is required to make good any physical damage to the building can such work fall within general repair and maintenance.932 The use of expensive gloss paint might represent an improvement, and would have to be budgeted for separately in the annual report (s. 17(2)(f)). Then owners who disagreed with this proposal could vote it down by a majority of not less than 75 per cent of those present and voting (s. 18(4)(b)). This would veto the proposed service charge, leaving the previous service charge to
931 Wylie, Landlord and Tenant, p 326. |
932 Proudfoot v Hart (1890) 25 QBD 42. |
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run for four months from the date of the meeting, if the OMC directors so decide, until a new one is adopted (s. 18(4)(b)).
(b)Installing a new lift adds something new to the building and amounts to an improvement. To enable the OMC to install a new lift, one would have to point to an express term in the scheme long leases empowering it to carry out such major improvements to the common parts, and in principle this would have to be budgeted for in the annual report as non-recurring expenditure for that year (s. 17(2)(f)). As with the previous item, the proposed installation could be rejected, at the price of rejecting the whole budget and of needing to vote on a fresh budget at a later meeting.
(c)The long leases in some multi-unit development schemes may exclude the roof from the leases of any individual units, in which case the roof is within the common parts. There is nothing to prevent a developer from empowering the OMC in such cases to create a special use area in favour of top-floor unit holders over a new solarium. The creation of such a feature would require a special resolution of a general or special meeting. The leases might have to make provision for a re-allocation of the proportion of service charges to be paid by the owners who benefited from the new exclusive use area.
(d)The unit holders concerned may try to procure a winding up of the scheme.933 Winding up can be undertaken on any ground, including
the obsolescence of the scheme building. If the management company is solvent, there will be a voluntary winding up and a liquidator will be appointed. A special resolution would ordinarily be required at an OMC general or special meeting (Companies Act 1963 s. 213(a)). A petition is then presented to the High Court by the company (s. 212). The court may direct that the company is wound up, which takes effect as from the date the petition was presented (s. 220(2)). As from its dissolution the company will cease to exist (s. 249).
Descriptive formants
The common law of leases, Companies Act 1963 and Multi-Unit Developments Act 2011 are descriptive formants.
Metalegal formants
(a) If the scheme building is not regularly maintained, its condition could deteriorate to the point where the marketability of units is
933 See Keane, Company Law, Ch. 36.
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jeopardised. Experience suggests that the best way to safeguard the value of the scheme building is to place the liability for repairs and maintenance of its exterior and structure and its common parts in the hands of a management company, the cost being apportioned among unit holders in service charges. A high proportion of multiunit developments, especially older ones, apparently do not have a sinking fund to cover repairs, maintenance, replacements and improvements.934
The Multi-Unit Developments Act 2011 makes useful changes with regard to long-term work. OMCs must set up a sinking fund to discharge expenditure reasonably incurred by them on refurbishment, improvement and non-recurring expenditure (s. 19(1)), although it has, notably, eighteen months from the coming into force of section 19 in which to do so (s. 19(6)). Each unit holder is subject to a duty to contribute to this fund (s. 19(3)). OMCs must also establish and maintain a scheme providing for proposed annual service charges to cover on-going expenditure on insurance, repair and maintenance, the latter to include cleaning and waste management services (s. 18(1)). An annual service charge budget, which can be amended with the approval of 60 per cent of those present and voting at the meeting, will have to be drawn up and proposed (s. 18 (2)) (s. 18(4)(a)).
(b)Although, in common law, the installation of a lift lies outside a covenant to repair and maintain, the 2011 Act allows OMCs to budget for such items as part of the expenditure to be incurred out of its sinking fund (s. 19 (1)(b) and (2)). So as to prevent overcharging any one person, an annual cap on the payment into the sinking fund from any one unit holder of €200 is imposed unless the annual meeting agrees on a higher figure for the year in question (s. 19(5)), after which the €200 limit would, in default, apply again This aspect should go some way to deterring OMCs from proposing luxurious or unnecessary improvements.
(c)No changes have been made in the law with regard to special use areas. There is thus no special set of rules for multi-unit developments.
(d)The general company law concerning voluntary winding up applies, and there is no special regime for multi-unit developments, which is beneficial in the interests of simplicity and familiarity with the law.
934 Law Reform Commission, Final Report, p 136.
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Italy
Operative rules
The proposals submitted to the general meeting for approval, with the exception of (d), fall within the spheres of maintenance or modernisation. In particular, if proposal (a) envisages modernisation of the building rather than simple maintenance it qualifies as an alteration aimed at modernising and improving the use and enjoyment of the common property (CC art. 1120). Such an improvement must be approved by a majority of the unit owners in number and two-thirds in share value of the building (CC art. 1136 par. 5).This represents a ‘qualified’ majority compared to the simple or ordinary majority usually required in the general meeting. However, alteration or modernisation that endangers the stability or safety of the building; alters its architectural appearance or value; or makes certain common areas of the building inaccessible or unserviceable to even a single unit owner is prohibited (CC art. 1120 par. 2). Furthermore, if the improvements can only be made at considerable expense; are considered unnecessary in view of the particular conditions and importance of the building; and consist of works, plants or facilities that are to be used separately, unit owners who do not intend to benefit from the improvement need not contribute to the cost of the improvement (CC art. 1121). In the event that such a separate use is impossible, the modernisation will not be possible unless the majority of unit owners who have approved it bear the entire cost of the modernisation.
Theoretically, the modernisation envisaged by the installation of a lift935 is subject to the same provisions. However, 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 (Law on provisions to overcome and eliminate archi-
tectural barriers in private buildings of 1989 art. 2 read with CC art. 1136 pars. 2 and 3).936
As discussed above, improvements that render common areas inaccessible or unserviceable are prohibited, even if only a single unit owner is affected. Similarly, not all unit owners will necessarily be obliged to contribute towards costly alterations, even if these
935Cass 04.07.2001 no. 9033.
936According to whether a first or postponed meeting is called.
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alterations are approved at a general meeting (CC art. 1120 par. 2). However, it is important to note that Italian jurisprudence draws a distinction between ‘unserviceability’ and a mere change of use of the common areas, the latter being regarded as perfectly lawful.937 It is in fact debatable whether the prohibition against ‘unserviceability’ is absolute and it may be the case that modernisation of the common areas is possible with the unanimous consent of unit owners. The courts have held that the prohibition can be circumvented,938 stating that ‘unnecessary’ and ‘expensive’ are to be interpreted objectively and not with reference to the financial situation or sensitivity of one or more unit owners.939 The scenarios envisaged by cases (a) and (c) must be considered in light of this.
Scenario (d) is entirely different from the previous examples. It deals with the termination of the scheme and possible reconstruction of the scheme because it has become outmoded. The difficulty is that the Italian CC only has provisions on total or partial physical destruction of the building (CC art. 1128 par. 1). Even reconstruction of parts of the common property is dependent on partial destruction of the building that amounts to less than three-quarters of the value of the building (CC art. 1128 par. 2). There is no express provision that the scheme can be terminated if a qualified majority decide that the scheme has become outmoded. Ultimately, the consent of all the apartment owners will be required for the termination of the scheme.
Descriptive formants
The solution of this Case is provided in CC art. 1120 ff.
The Netherlands
Operative rules
The association of owners is responsible for maintaining and managing the common property, except for the parts designated as separate units for individual use (CC art. 5:126 no. 1). The manager(s) appointed by the association must manage the apartment rights scheme, administer the funds of the association and ensure that the resolutions of the meeting of owners are implemented (CC art. 5:131 no. 3). The association is, by
937 |
Cass 05.11.1990 no. 10602. |
938 Cass 14.12.1988 no. 6814. |
939 |
Cass 18.1.1984 no. 428. |
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law, obliged to maintain a reserve fund intended to be used for expenses other than expenses budgeted for the ensuing year. The Model By-laws of 2006 provide that the management must prepare a long-term maintenance and administration plan (for a period of at least five years), which must specify the cost and time needed for the completion of any future repairs and renovations envisaged (art. 54 par. 4). The manager must decide on maintenance of the common property, as long as such maintenance falls within the budget that is approved by the meeting of owners (art. 52 par. 2). If the expenses fall outside the normal approved budget, the general meeting will be called upon to decide what course of action to follow. Decisions on expenses falling outside the scope of normal maintenance can be taken in a general meeting constituted by having a quorum of two-thirds of the total votes, and can be approved by a special majority of two-thirds of the votes. Dutch law therefore provides reasonable measures to ensure that condominiums are kept in the state of a good repair and to guard against dilapidation. However, in cases where the owners withhold consent to renovations or repairs on unreasonable grounds, or fail to take a decision, any single owner may request the cantonal judge to replace the necessary consent of the association with a court order to perform the work necessary at the cost of the association. Such an order can, if necessary, even be granted after the work has already been carried out.940
(a)Therefore, the manager is authorised to decide on the repainting of the building and the costs involved 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. Expenses outside the scope of normal maintenance (for example, for luxury improvements), such as using expensive gloss paint, will have to be adopted in the meeting of owners constituted by a quorum of two-thirds of the total votes and must be decided with a special majority of two-thirds of the votes.
(b)Installation of a lift in the building in order to modernise the condominium will normally require an alteration of the layout plan of the building, and therefore an amendment of the deed of subdivision. Generally speaking, such an alteration needs the unanimous consent of all the owners.
940Court of Appeal (Gerechtshof) Den Bosch 3 October 1990 (Bouwrecht 1991, 558 ff.); District Court (Rechtbank) Rotterdam 12 June 2008 (NJF 2008, 399).
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(c)Under Dutch law, the roof of the condominium building is usually part of the common property intended for common use. The owners are jointly responsible for paying the costs of repairs and maintenance of the roof and are entitled to use the roof if it is suitable for use. It is therefore not possible even for the general meeting to grant one group of owners the exclusive use of the roof. Nevertheless, Dutch courts have upheld the right of the association of owners
to grant a right of exclusive use of a common roof to one of the owners.941
(d)Apartment owners have a reciprocal obligation to undertake and maintain the construction and lay-out of the building (CC art. 5:108). Nevertheless, in the event that the building has been seriously damaged or wholly or partially destroyed, an apartment owner or any person whose consent is required for amendment of the deed of subdivision may ask the cantonal judge to 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 (CC art. 5:144). Alternatively, the owners may unanimously decide to cancel the deed of subdivision by an appropriate notarial deed, which must be registered subsequently in the public land registers (CC art 5:143).
Termination of the apartment right scheme, other than in the case of serious damage to or destruction of the building, can therefore only be effected by a notarial instrument to which the following parties consent: all apartment owners, holders of limited real rights over an apartment right, creditors who have attached such apartment rights and, if the scheme has been developed by the holder of a hereditary land lease or a hereditary building right, the landowners (CC art. 5:139 nos.1 and 3 read with CC art. 5:143 no. 2).
Descriptive formants
Dutch law distinguishes between management and maintenance of the building on the one hand, which is the responsibility of the association of owners, and acts of disposal on the other. Management and maintenance can be decided according to the normal rules that apply by
941Cantonal judge (Kantonrechter) Amsterdam 2 August 1996 (Praktijkgids 1996, 4646); Court of Appeal (Gerechtshof) Amsterdam 18 June 1998 (NJ 1999, 437); District Court (Rechtbank) ’s-Gravenhage 28 August 2002 (NJ kort 2002, 65); District Court (Rechtbank) Amsterdam 18 October 2006 (RN 2007, 53); Court of Appeal (Gerechtshof) Amsterdam 24 July 2008, no. 106.006.149/01 (Notamail 2008, 267).
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virtue of the by-laws and the deed of subdivision. Acts of disposal, which in this case constitutes a change in the contents of the coownership rights of each apartment owner, fall under the authority of the owners themselves and must in principle be undertaken unanimously. The main principle on which this difference is based is Dutch law, which holds that a co-owner may not be forced by the other coowners to relinquish any part of his rights against his will. His property rights are thus protected.
Metalegal formants
Maintenance is one of the most important aspects to be taken care of in an apartment rights scheme. Owners and owners’ associations in some cases adopt a somewhat laissez faire attitude towards maintenance. This is especially true in very small apartment buildings consisting of two or three apartments, where maintenance is often neglected and frequently not carried out in accordance with the by-laws. In larger apartment schemes, it frequently happens that contributions to reserve funds for long-term maintenance and renovations are set far too low in order to keep the monthly levies down. This frequently results in disputes when, after a certain number of years, maintenance becomes imperative (for example the roof leaks and extensive repairs are necessary).
Dutch law does not distinguish between luxury improvements and normal maintenance. On the other hand, the Model By-laws of 2006 require that a decision to undertake certain expensive maintenance or renovations requires a resolution adopted by a special majority at the general meeting.
Norway
Operative rules
(a) Each co-owner may claim that the common parts of the scheme should be properly maintained (Law on Owned Units of 1997 s. 20(2)). The managing board must see to it that such maintenance is duly carried out (there is no management association under Norwegian law). The general meeting may give instructions, by simple majority, regarding maintenance issues, for example, the colour in which the building should be painted. If fresh painting is not required for maintenance purposes, a decision to repaint the building must be taken by a
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two-thirds majority at a general meeting. Maintenance may to some extent properly include modernisation where this is expedient, so changing to gloss paint may well be within the limits of maintenance measures.942
(b)The installation of a lift will be a modernisation measure, so exceeding the limits of maintenance, and a decision to this effect would require a two-thirds majority at a general meeting (Law on Owned Units of 1997 s. 30(2)).
(c)As for the solarium, two limitations are relevant. First, it would normally be contrary to the rules as to minority protection if all owners were to pay for an installation that would only benefit a limited group of owners exclusively (even if the latter group managed to mobilise a two-thirds majority at a general meeting). Second, even if the owners on the top floor are willing to pay for the solarium themselves, they still need the consent of a two-thirds majority at the general meeting to make changes to any common parts of the property.
(d)It is commonly accepted that a decision to dissolve the condominium (terminate the condominium scheme) requires the consent of each owner, even if this is not explicitly provided for in the Act. The decision would in practice involve the alienation of the property, which is possible only with the consent of each owner.
Descriptive formants
The issues raised are in the main dealt with explicitly (except for the termination issue) in the Law on Owned Units, even if they may involve difficult issues of fact and degree.
Metalegal formants
The purpose of a condominium scheme could be regarded as involving the ‘passive’ management of the existing scheme only; not involving any new activities, additional investments or the taking of risks. On the other hand, the opportunity to upgrade the status of the scheme in line with current general economic, technological and societal developments should be catered for. The legislator has tried to strike a balance by requiring a qualified majority for measures exceeding ordinary maintenance and management and by general rules with regard to minority protection.
942 Hagen et al., Eierseksjonsloven, p. 294.
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Poland
Operative rules
(a) and (b) These matters relate to the question of ‘management’ of common parts, which not only denotes current repairs and maintenance, but may also involve improvement, investment, modernisation and other more substantial changes to the common property. Under the statutory default regime, issues under (a) and (b) would be matters of so-called extraordinary management. In small communities such courses of action would require a unanimous vote, but in large communities a majority vote would suffice. In both cases, it is possible to apply to court for a solution if the owners cannot reach consensus. In small communities, owners who have at least half of the share values in the scheme may apply to court. The court will resolve the issue based on the purpose of the proposed changes and considering the interests of all owners (CC art. 199). In large communities, the application for a court decision may be made by the management board or the professional manager. Again, the court will resolve the issue based on the purpose of the proposed changes considering the interests of all unit owners (Law on Unit Ownership art. 24).
(c)The Polish Law on Unit Ownership does not provide for exclusive use areas. However, the community may agree to effect a quoad usum demarcation of a part of the common property and so allow the top floor unit owners to have exclusive use of the roof. The installation of a solarium would then be treated as a private cost to be borne by the interested unit owners and it would be advisable for the community to specify what exactly may be installed and to insert an obligation on the owners concerned to remove the solarium once the quoad usum division comes to an end. If the solarium would require actual construction work on the roof, this would be a matter of extraordinary management and a resolution according to the rules mentioned above would have to be passed. It is important to remember that in large communities, even if the majority agrees, each unit owner may appeal to court against the resolution, claiming that his financial interest in the scheme has been prejudiced and the resolution had been passed purely for the purpose of satisfying the private needs of a group of influential owners.
(d)The Law on Unit Ownership does not contain any provisions regarding the termination of a scheme. As a change in the ownership of immovable property would take place, termination may only be achieved by a legal act in the form of a notarial deed concluded with the consent of all unit owners. The issue is not capable of being