Экзамен зачет учебный год 2023 / European Condominium Law
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resolved by a resolution of the community, because not only the common parts but also the individual units are affected.
Metalegal formants
Management of common parts includes all types of activities, such as maintenance, improvements and so on, whether necessary or luxurious. The important issues regard whether the planned activities concern the common property and whether they fall under the category of ordinary or extraordinary management issues. It is obvious that in practice there may be disputes as to how to classify a given issue, but there will always be borderline cases. However, the opportunity exists to refer the matter to the courts.
Portugal
Operative rules
(a)One of the most important functions of the general meeting and the manager is to maintain the common property and to keep it in a state of good repair (CC art. 1436(f)). In general, those fixtures and fittings that have become defective should be replaced by articles of comparable quality. On this basis, the management body could only justly decide to repaint the building with paint of a comparable quality and not with expensive gloss paint. However, the manager cannot act on his own and would need an ordinary resolution at a general meeting approved by a majority of votes representing more than 50 per cent of the value of the building (CC art. 1432(3)). Note that individual owners may only effect works of maintenance or repair with regard to the common property if urgent repairs are delayed or obstructed by the manager (CC art 1427). Repainting of the walls with more expensive gloss paint is an improvement, for which a special resolution of a two-thirds majority at a general meeting is needed as discussed in the next paragraph.
(b)It is generally accepted that the installation of a lift in a building, as opposed to the repair of an existing lift, would be regarded as an improvement of the building rather than maintenance thereof. Owners may, by a two-thirds majority in share value, decide to carry out alterations or improvements to the common property provided that individual units or the use of the common property is not adversely affected by such works (art. 1425(1) and (2)). Owners who dissented do not have to contribute to the cost of the alteration or innovation, if their dissent was justifiable as where the innovation was very luxurious or
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disproportionate to the type of scheme in question (art. 1426(2) and (3)). However, if such an owner later benefits from the improvement he would be charged with the proportionate share of the cost of the erection and later maintenance of the work (art 1426(4)). It would perhaps be easier to designate the painting of the walls with expensive gloss paint as a luxurious improvement than the installation of a lift, which is considered a useful rather than a luxurious improvement depending on the nature of the scheme.
(c)Works that modify the architectural design or aesthetic appearance of the building, such as the installation of the solarium, can be carried out if authorised by prior resolution approved by a majority representing two-thirds of the share values of the total building (CC art. 1421(3)). To allocate the exclusive use of the solarium to the group of owners on the top floor of the building would however require a unanimous resolution of the owners in a general meeting because it would involve the amendment of the title deeds of the condominium (CC art. 1419(1)). Monetary compensation is not foreseen by the law, but can be agreed upon by the owners. Once this has been agreed, the cost of maintaining the solarium would have to be borne by the owners of the top storey because it is for their exclusive use (CC art. 1424(3)).
(d)In the case of destruction of the whole building, or of damage amounting to more than three-quarters of its value, any owner can demand the sale of the land and the materials, which will lead to the dissolution of the condominium community (CC art. 1428). Only if less than three-quarters of the building is destroyed may the general meeting decide, by majority vote, to reconstruct the whole building. Any owner unwilling to participate in the reconstruction of the building may be compelled to sell his or her interest to the other owners, the price being determined by agreement or, in the absence of agreement, by a judge. The owner concerned has the right to choose which owner may acquire his property right.
In view of the above, a scheme can only be terminated on the ground of damage to or destruction of the building and not because the building has become outmoded. The only way in which the scheme could be terminated is by cancellation of the constitutive deed, which would require a unanimous resolution.
Descriptive formants
(a) CC art. 1430(1) stipulates that the general meeting and the manager are responsible for the administration of the common property, which pertains to the maintenance and repair as well as alterations and
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improvements to the common property. To carry out this function, the manager needs a majority of 50 per cent of the total share values (quotas) of the building (art. 1432(3)).
(b)Because improvements to the common property (such as the installation of a lift) denote a more radical intervention, such work requires a larger majority, namely, a majority of two-thirds of the total share values of the condominium (CC art. 1425(1)). Once the lift is installed all owners must pay for its installation and maintenance. In the event that the installation of the lift is classified as a luxurious improvement by the court, the owners who did not vote in favour of the installation of the lift would not have to share in the cost of the installation and maintenance of the lift (CC art. 1426 (1) and (2)).
(c)Improvements on common property that affect the architectural design and aesthetic appearance of the building are deemed to be so radical that they also require a two-third majority (CC art. 1421(3)). If a new amenity is created (solarium) for the exclusive use of a group of owners, a change of the constitutive title by a unanimous resolution is required to reflect this (CC art. 1425(2)).
(d)The termination of a condominium is regulated by CC art. 1428, which only mentions damage and destruction and not obsolescence as grounds for termination of a scheme. Unanimity is required to cancel the constitutive deed. Owners are not entitled to approach the court for an order that termination of the scheme on the ground of obsolescence is just and equitable.
Metalegal formants
(a)Regular maintenance is of the utmost importance. Deterioration of the buildings and facilities would jeopardise the reputation of the scheme and the owners’ financial investment in their units. It falls within the normal competence of the general meeting, and can be authorised by a simple majority.
(b)The upgrading of a scheme by the installation of a lift in the building is a luxurious improvement that requires a special resolution. Owners are given an option to vote against such an improvement if they feel that they cannot afford to pay their share of the costs of such an improvement.
(c)The establishment of exclusive use areas in favour of the owners of more than one unit would seldom happen in practice because of the difficulty of obtaining a unanimous resolution to authorise such areas.
(d)Apartment ownership is supposed to be made as permanent as possible. Termination is thus envisaged only when the scheme
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building is damaged or destroyed. If the building is no longer economically viable because of its obsolescence, the owners may agree unanimously on the termination of the scheme.
Scotland
Operative rules
Again, this area will be dealt with by TMS and DMS in completely different manners.
Under TMS, the only obligation on any owner is to pay for the repair and maintenance of any scheme property if a scheme decision is reached to repair such property. ‘Maintenance’ includes repairs and replacement, cleaning, painting and other routine works, gardening, the day to day running of a tenement and the reinstatement of a part (but not most) of the tenement building, but does not include demolition, alteration or improvement unless reasonably incidental to the maintenance.943
In this scenario, (a) is potentially maintenance if a scheme decision can be secured. The question is whether this would be an improvement if the expensive gloss paint is significantly different from what was used before. Case (b) is clearly improvement and not maintenance. This is only possible with unanimous support from all owners. Case (c) depends on whether the roof is owned by the top storey flats, which would be the default position. The cost of such installation and its future maintenance is of course borne by the top flat owners among themselves (although the installation will form part of the scheme property, it only qualifies under Rule 1.2(a) rather than 1.2(c)944). Case (d) is impossible as long as the building stands as a tenement building. TMS is compulsory for any qualifying building until the demolition of such building.
Under DMS, there is a unified mechanism to levy costs through the service charge, which does not necessarily distinguish between maintenance and improvement. However, there are still differences between the two. The manager only has the duty to carry out proper maintenance. He does not need to suggest improvements or alteration (presumably he can, but is not obliged to). The improvement decision can only be made by the general meeting. And any payment out of the reserve fund, or using any money to pay for alteration or improvement of scheme
943 Tenements (Scotland) Act 2004, Rule 1.5. |
944 Rule 4.2. |
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property, can only be done with a special majority (of all votes allocated, not just votes cast at a meeting, discussed above under Case 9).
Therefore, in this scenario, (a) is possibly maintenance and improvement. It would seem that any reasonable manager would ask the general meeting to make a decision on this first, rather than to go ahead and assume the responsibility on his own. Case (b) is clearly improvement and, bearing in mind the likely cost of this, can only be authorised by special majority at a general meeting. Noticeably, this is still much easier than the unanimous consent required under TMS. Case (c) is a matter for the general meeting too, as the roof would almost certainly be owned by the owners’ association as a legal person. Case (d) is a possibility by means of registering a deed of disapplication, if the general meeting authorises this. However, the scheme, if it is a tenement building or a group of tenement buildings, will automatically revert to TMS because one of TMS/DMS must always be in place for any tenement building. One cannot opt out of both as long as there is in fact a building in separate ownership divided horizontally. Thus, a tenement scheme is terminated only if the building is destroyed or all the units in the building are sold and transferred to one person.
Descriptive formants
TMS is a significantly limited version of an apartment ownership structure, as explained above. It is not surprising it cannot decide on issues such as improvements without unanimous support. The DMS is much more suited to deal with such issues.
Metalegal formants
Such issues have often been the focal points of tenemental disputes.945 Perhaps the inefficiency of TMS, especially with regard to larger developments, would push parties to the adoption of DMS.
Slovenia
Operative rules
The pertinent legislation (the Property Code and the Law on Housing) does not lay down an express duty to maintain and manage the common property of the scheme. Such a duty is instead imposed by the deed of
945 Cusine, Conveyancing Opinions, pp. 507–11 (shared aerial for colour television signals).
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establishment of the apartment ownership scheme. The apartment owners must pay a monthly contribution in order to cover current ‘management costs’. If a scheme consists of more than eight units and two or more apartment owners, a reserve fund must be established to cover future expenses (Property Code art. 119). The criteria governing the calculation of the contributions in question are fixed by the Ministerial Decree of 2004. In smaller schemes, a reserve fund is only optional. The Law on Housing (art. 26) requires that a manager must prepare a maintenance plan for a period of between one and five years, which has to be approved by apartment owners who control a 50 per cent majority of coownership shares at a general meeting. Any apartment owner who regards the maintenance plan as inadequate may approach the court to rule in non-contentious proceedings for the plan is to be assessed by an expert. The cost of such expertise is to be borne by all the apartment owners (or their association, if established).
(a)If the building is in need of being repainted, the decision falls within regular management and requires a 50 per cent majority. However, making use of expensive gloss paint would amount to an improvement rather than mere maintenance. This in turn would need approval by a majority of 75 per cent. The same would apply if the apartment owners wanted to use ordinary quality paint but no renewal of paintwork is, as yet, required. In the event that the old coat of paint is so worn off that repainting is necessary, but the majority required cannot be reached, any apartment owner can request the court to resolve the issue (Law on Housing art. 28).
(b)The installation of a lift in the building would amount to an improvement rather than maintenance. Therefore, in principle a 75 per cent majority is required for such work. It is, however, much more likely that the lift would be considered to be a new common part. The designation of any new common part is only possible following an amendment to the deed of establishment, which requires the unanimous decision of all owners.
(c)The roof of a condominium building is part of the common property and is thus open for use by all the apartment owners. A group of apartment owners may, however, be granted the right to build a solarium. One such possibility is that the owners of top floor apartments are granted the right of superficies (Property Code art. 256), which would enable them to co-own the solarium in question.946 The
946 Such a case occurred in practice in Ljubljana.
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establishment of a right of superficies requires the signatures of all the apartment owners on the contract to establish this right, authenticated by a notary and registered in the Land Register. Such a right is regarded as independent incorporeal immovable property that is not part of the apartment ownership scheme. This makes the construction set out both complicated and impracticable. A preferable solution would be to reorganise the apartment ownership scheme in such a way that the solarium would become a new common or individual part within the existing scheme. If the solarium is treated as a new common part, it can then be declared to be a limited common part to be used and coowned only by owners of the top floor apartments. If they then choose to make the solarium a new individual unit, it would, in addition, be co-owned by the owners of the top floor apartments.947 This solution would increase their co-ownership shares held over the common parts and thus increase their voting rights.948 Reorganisation requires a unanimous decision of all apartment owners as well as the amendment of the deed of establishment. Therefore, it is perhaps unlikely that the top-floor owners would be able to effect the desired change.
In any such case the community by-laws will need to be amended and the co-ownership shares on the roof will have to be recalculated. The deed of establishment must also be amended to provide for this recalculation.
(d) By the analogous application of the rules regulating the establishment of an apartment ownership scheme, the scheme may be dissolved by a termination agreement concluded between all the apartment owners (Property Code art. 125). If one or more units are encumbered with rights of third parties (such as a mortgage), the consent of the third party is needed. The agreement must provide for the conversion of the
regime of apartment ownership to co-ownership or single ownership (if all the units are owned by the same person). In principle,949 the co-
ownership share of each co-owner after termination of the scheme is equal to his co-ownership share in the common property of the scheme. The formal requirements are the same as in the case of establishment. The signatures of all the apartment owners on the termination
947The result would be identical were some apartment owners to jointly purchase an existing apartment in the scheme.
948They would gain additional co-ownership shares pertaining to the newly acquired individual unit.
949The agreement may provide that one or more apartment owners ‘step out’ of the scheme, normally by selling their share to the others owners within the scheme.
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(dissolution) agreement must thus be authenticated by a notary. The termination becomes effective upon registration in the Land Register. In addition, the condominium is terminated by operation of law on destruction of the building. The land and what remains on the land is then held in the same co-ownership shares as had been previously held over the common parts (art. 126).
Descriptive formants
Slovenian law distinguishes between decisions concerning acts of regular management950 and decisions concerning acts that go beyond regular management. The former require a 50 per cent and the latter a 75 per cent majority with the exception of certain decisions that must be taken unanimously. Detailed rules are to be found in the Law on Housing (arts. 25 and 29).
Metalegal formants
Proper maintenance is one of the most important, and often also most problematical, issues in the operation of apartment ownership schemes. Many apartment owners in older buildings, where the state of repair of the building is often poor, have difficulty with paying their monthly contributions and they often cannot afford the cost of the work concerned. For these reasons they often try to block decisions that involve an increase of their financial burden. Consequently, many older apartment buildings in Slovenia are in a very poor state of repair. The legislator introduced the mandatory reserve fund in 2003 to force apartment owners to make provision for future long-term maintenance and repairs. However, the minimum contribution, regulated by ministerial decree, is in many cases too low to achieve the intended result.
South Africa
Operative rules
(a) One of the most important duties of the management body is to maintain the common property and to keep it in a good state of repair (Sectional Titles Act s. 37(1)(j)).951 In general, fixtures and fittings that
950Under Slovenian law, ‘management’ (upravljanje) covers the management, maintenance, repair and operation of the common parts.
951Van der Merwe, Sectional Titles, pp. 14–22(1)-14–24(1).
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have become defective should be replaced by articles of comparable quality. On this analogy the management body would only have to repaint the building with paint of a comparable quality and not with expensive gloss paint. However, with regard to the repair of defective cables and ducts, the Act expressly provides that repair includes renewal where reasonably necessary (s. 37(1)(p)). On this analogy the management body may be entitled to use gloss paint when repainting the building. This is also supported obiter in an important case where the judge states that expensive repair works and replacement of materials could fall within the scope of ‘maintenance’. This opens the door for reasonable upgrades of the material used for repairs to qualify as ‘maintenance’. However, the majority of academics regard the repainting of the walls with more expensive gloss paint as a non-luxurious improvement for which a special resolution is needed.952 It is important to note that the duty to repair is a mandatory function of the body corporate. An owner could therefore approach the court for an order to compel the management body to perform this function.953 In appropriate circumstances the owner would be entitled to a delictual claim for damages if the damage was caused by neglect on the part of the management body to undertake necessary repairs.954
(b) It is accepted generally that the installation of a lift in a building, as opposed to the repair of the lift, would be regarded as an improvement of the building rather than maintenance thereof. In this regard the model rules draw a distinction between luxurious and non-luxurious
952Ibid., p. 14–23, which quotes the following dictum in the English decision ACT Construction Ltd v Customs and Excise Commissioner 1981 1 All ER 324 (CA) 329–320: ‘The expression “maintenance” should be given its ordinary and natural meaning. In regard to the first extreme position, there may well be cases where the work done, although it involves some degree of improvement (for instance, because it involves the use of modern or better materials or methods), is nevertheless maintenance in the ordinary and natural meaning of that word. For example, if metal gutters, which are liable to decay in time, are replaced with plastic gutters, which are not liable to decay however long they remain there, that is an improvement to the building, but I would still regard that work as maintenance. With regard to the second extreme position, there may well be cases where, although the purpose of the work is to remedy existing or prevent future defects in the building, it is nevertheless not within the expression “maintenance” in the ordinary and natural meaning of that word. For example, if a building has a flat roof that leaks continuously and the owner decides to replace the flat roof with a pitched roof so as to eliminate that defect, although that work was designed to eliminate a defect, it would not in my view be maintenance in the ordinary and natural meaning of that word’.
953Van der Merwe, Sectional Titles, p. 14–24.
954Faiga v Body Corporate of Dumbarton Oaks 1997 2 SA 651 (D).
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improvements (Ann. 8 r. 33). Luxurious improvements may be undertaken by the management board if authorised by a unanimous resolution. However, if the board intends to carry out non-luxurious improvements, they must give written notice to all owners concerning the need, desirability and effect of improvements; the cost thereof; the manner in which it is to be financed and the effect it would have on their monthly contributions to the administrative fund. The notice must also contain a statement that the board will begin the improvements thirty days after the notice was posted. On receipt of the notice, any owner may, by written request, ask the board to convene a special general meeting to consider and discuss the proposals contained in the notice. If a meeting is not requested, the board can proceed with the non-luxurious improvement. If a meeting is called, the owners may approve the proposal, with or without amendments, by a special resolution (Ann. 8 r. 33(a), (b) and (c)).
(c) Under the Sectional Titles Act new exclusive use areas on the common property may be established for the exclusive use of one or more unit owners (s. 1 ‘exclusive use area’) by a unanimous resolution of the members of the management body (s. 27(2)). In the present scenario such a resolution would only be possible if the owners in favour of erecting the solarium offer to pay the rest of the owners some form of pecuniary compensation, and approve the size and design of the solarium. If the resolution is approved, the management body must apply to the Surveyor-General for the delineation of the solarium on the registered sectional plan (s. 27(2)). The management body must then transfer the newly established area to the owners of the top storey (S 27(3)), who will then jointly hold the real right with regard to the solarium (s. 27(6)). As an alternative, the management body may amend the management rules (by unanimous resolution) or conduct rules (by special resolution) by adding a special rule that makes provision for the establishment of an exclusive use right of the solarium. This amendment must be notified to the Land Registry. Once the notification is lodged, the rule becomes enforceable. The special rule must include a layout plan (to scale) on which the location of the distinctively numbered exclusive use area, as well as the purpose for which the area will be used, are clearly indicated. It must also contain a schedule showing the units to which the area has been allocated (s. 27A). The exclusive use area created under the rules only confers personal rights on the owners of the top storey (s. 27A(a)).