Экзамен зачет учебный год 2023 / European Condominium Law

authorise them to convene a general meeting for a particular condominium and make proposals for maintenance of the building, the creation of a reserve fund, amalgamation with another association and appointment of a management body (CC art. 5:127a). The Municipality can also propose changes in the deed of subdivision (CC art. 5:140a).

The succinct art. 2335 of the Portuguese CC of 1867 was given more flesh by Decree 40333 of 14 October 1955. The main purpose of this Decree was to alleviate the scarcity of affordable housing in city centres caused by a flow of people moving to the cities, rising land and construction costs, and the reluctance of developers to construct rental buildings because of stringent rent control legislation. Condominium was seen as the ideal solution to provide urgently needed residential accommodation for people of all income levels within commuting distances of employment hotspots.

In 1967, the current Portuguese Civil Code replaced both the Civil Code of 1867 and the Decree of 1955. Articles 1414 to 1438 constitute the current legal regime with regard to condominiums (and this part of the CC is thus a second-generation condominium statute). The legal regime on condominiums, strongly influenced by the Italian Civil Code, is based on the following principles: (a) individual ownership of the unit is at the core of the condominium regime; (b) common parts and facilities are strictly subordinated to the enjoyment of the units; and (c) the general meeting is not allowed to impose restrictions on the powers an owner has over his or her unit.

Decree-Law 267 of 25 October 1994 contains provisions that amend the Portuguese Civil Code on matters such as the consolidation of units,34 improvements to the common parts, the insurance of the building, and restrictions on the powers of the owners over their individual units. Most significantly, art 1438-A, extended the application of the apartment ownership regime to a group of low-rise buildings and to mega condominiums consisting of several multi-unit high-rise apartment buildings. The Law of 2001 provides that condominiums can now, in addition to a private constitutive act on the part of the developer,35 be constituted by adverse possession, court orders and administrative acts. More recently, Decree Law of 2008 introduced

34Decree-Law 267 of 25 October 1994 supplemented further by Decree-Laws 268/94 and 269/94, both dated 25 October 1994.

35Law 6 of 27 February 2001 modifying CC art. 1417(1).

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some minor modifications to arts 1419(1) and (2) and 1422-A (4) and (5) regarding the formalities required for the constitutive title and its amendments.36

The Catalan condominium provisions are the most recent instances of Western European legislation. Law 5 of 10 May 2006 incorporated Catalonia’s own rules on property and real rights,37 including condominium (propietat horitzontal) and other forms of co-ownership into the Catalan Civil Code.38 Moreover, by virtue of the 6th Transition Disposition, the condominium provisions of the CC also apply to condominiums that were already in existence on 1 July 2006, although they were established and governed until then by the Spanish Law on Horizontal Property of 1960 and article 396 of the Spanish Civil Code (see the Spanish report).

The separate Catalan legislation on condominiums contained in articles 553-1–553-59 of the Catalan CC, has naturally been influenced greatly by the Spanish legislation, which itself has been amended several times since 1960. However, Catalan law has introduced several innovations aimed at making condominium rules more flexible. These innovations will be highlighted in Part III. The Catalan provisions naturally represent a first-generation statute, which has not yet been amended. See further in Part III.

3. Eastern Europe

Before the advent of socialist regimes in Eastern Europe, four countries, namely, Hungary (1924), Rumania (1927), Poland (1934) and Bulgaria (1935), had already adopted special statutes on apartment ownership. Once socialist governments were installed, private ownership of land and buildings was regarded as ideologically unjustifiable. Nevertheless, some form of leasehold rights to land and buildings was always recognised, and within this limited sphere apartment ownership also played a role. The more recent statutes of Yugoslavia (1959), Czechoslovakia (1966) and the Soviet Union (1961, 1968) contain significant socialistic characteristics. Most of these statutes have since been supplemented or replaced by more recent legislation.39 Under socialist regimes, except in Poland, the land on which an apartment building is erected remains the property of the state, thus precluding

the ‘owner’ of an apartment from acquiring an individual share in the land; ownership of a unit was classified as personal ownership as opposed to private ownership, thus allowing disposal of an individual unit only in accordance with socialist policy; and although each owner was in principle allowed the right to a dwelling, this right was usually subjected to severe restrictions with regard to the size of an apartment, depending on the number of persons in a family, and the number of apartments each owner was allowed.40

In Poland, a desperate shortage of housing between World War I and World War II led to the comprehensive regulation of condominiums in the Ordinance on Unit Ownership of 24 October 1934.41 This Ordinance, which applied also to non-residential condominiums,42 gained great popularity in central Poland, particularly in Warsaw. With the advent of communism and socialist ideas, the Introductory provisions to the Polish Civil Code of 1964 repealed the Ordinance and replaced it with articles 135–138 (no longer in force) of the new Polish CC. Although ownership of residential property was not formally abolished, socialist policies relating to land and the management of residential property effectively put paid to home ownership in practice. A plethora of constantly changing statutes caused confusion and made the institution less accessible. Apartment ownership was restricted to residential units in small ‘residential houses’, containing two to four units. Moreover, the size of units was restricted to a certain usable area specified in subordinate legislation (usually no more than 110 square metres) and units could only be used to satisfy the residential needs of the owner or his family.43

With the demise of communism in 1989 and 1990, Poland shifted from a centrally planned economy to one controlled by market forces. Numerous changes to the legal network of regulations and two major amendments of the Polish CC eliminated most of the limitations on the creation of apartment ownership. However, the provisions remained fragmented and affected by insoluble legal ambiguities. In particular, the management of condominiums was left to the owners, without a regime being in place to ensure effective management in larger condominiums. In addition, there were no special mechanisms to sanction

42Van der Merwe and Habdas, ‘Polish apartment ownership compared with South African sectional titles’ (2006), pp. 166–7.

43Van der Merwe and Habdas, ‘Polish apartment ownership’, p. 167.

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owners guilty of serious misbehaviour.44 Moreover, the method of calculating shares in common parts was also left entirely up to the unit owners, resulting in unfair allocation of shares and consequent unequal access to decision-making at general meetings.45

This haphazard situation led to the enactment of the Law on Unit Ownership of 1994, which repealed the previous regulations. The new Law retained provisions that worked in practice, but also benefited from comparative inputs of the German Law on Apartment Ownership and North American condominium legislation. The present regulation is, chronologically speaking, a third-generation Polish condominium statute and contains new provisions regarding the community of owners; the types of management, which differentiates between small and large condominium schemes; limitations on abusive use of units; and prescribed methods of calculating share values.

The concept of apartment ownership, or condominium (etazˇna lastnina), was introduced into Yugoslavia in 1959 by the Federal Law on the Rights on Parts of a Building.46 Under the 1974 Constitution, the right to regulate apartment ownership was transferred to the legislators of each of the Federal Republics, resulting in the Law on Rights on Parts of a Building coming into force in Slovenia in 1976.47 The first apartment ownership provisions were related to the nationalisation of residential properties in the Slovenian cities, as a result of which the State became the owner of all land. A portion of houses and apartments were left in private ownership, while other houses and portions of buildings were expropriated and became the property of the State. In the 1960s and 1970s a large number of multi-unit buildings (blocks of apartments) were built to accommodate the influx of an increased labour force, which migrated to the cities from the countryside. Those buildings were owned and managed by social cooperatives (druzˇbena lastnina), which employed the tenants living in these apartments.48

These tenants were in due course allowed to buy the apartments, and a growing number of apartments in newly built apartment buildings were gradually sold to private persons. This caused a mixture of public and private ownership; within the same building, some apartments

44Ignatowicz and Stefaniuk, Prawo rzeczowe (2009), p. 145.

45Ignatowicz, Prawo rzeczowe (1994), pp. 152–3.

46Official Gazette of Yugoslavia 16/59, 43/65, 57/65.

47Official Gazette of Slovenia 19/76.

48Society ownership was a specific Yugoslav form of public ownership.

were publicly owned and others privately owned. However, the clear statutory rules governing apartment ownership were often not applied in practice, and in most cases the ownership of units was not registered in the Land Register, resulting in ill-defined relationships between the apartment owners.49 Moreover, in the former Yugoslavia the situation was further complicated by the fact that the maxim ‘superficies solo cedit’ was not accepted as binding. Consequently, the ownership of apartments was not in any sense formally linked to the ownership of the land on which the building was built. Some entitlements to the land itself (which was always treated as being public property) were attached to the buildings as so-called ‘functional land’ (funkcionalno zemljisˇče). Every building was allowed as much land as might be required for its normal functioning including the land beneath the building, as well as land required for such facilities as parking places, playgrounds for children, lawns and so on. This attribution was, however, neither formally defined nor registered.

After the dissolution of Yugoslavia in 1991, Slovenia regulated its version of apartment ownership under the Law on Housing of 1991. In order to avoid uncertainty the new provisions formally linked the ownership of apartments with the ownership of the land, thus providing a sound legal basis for the privatisation of publicly owned apartments. Tenants in these apartments were allowed to buy their apartments for approximately 10 per cent of their market value with the result that at present about 80 per cent of these apartments are owned by private individuals.

The Property Code of 2003 reinstated the maxim superficies solo cedit and regulates apartment ownership on ‘traditional’ principles,50 which now means that every apartment ownership scheme must relate to at least one or more immovable units (nepremičnina), which in turn are defined by article 19 of the Property Code as, in essence, a ‘parcel of land’. The new Law on Housing of 2003 followed the Property Code but regulates all kinds of residential property, including apartment ownership schemes, in more detail and is by analogy also applicable to commercial condominiums.

An enormous practical problem in Slovenia is that apartment ownership in buildings built before 2003 is, in many cases, not yet formally regulated by legislation because the original seller no longer exists; the

49Juhart et al., Stvarno pravo (2007), pp. 332–3.

50Vrenčur, Stvarno pravo za posrednike pri prometu z nepremičninami (2005), p. 17.

It should be stressed that current practice is complicated by the fact that in the early 1990s the Croatian legislator introduced a special register for socially owned condominiums. These were privatised via subsidised sales to former holders of socialist tenancy rights (stanarsko pravo). The land register was antiquated and not well suited to deal with the registration of a large number of condominiums. The privatisation process required speed, and the special register was formed to operate parallel to the land register. This was implemented by the Law on the Sale of Apartments with Tenancy Rights of 1992.

After the introduction of the new Law on Land Registration in 1996, this special register was initially meant to be merged with the existing land register. This process was, however, severely delayed due to significant discrepancies between the land register and condominium plans drawn up by land surveyors. In an attempt to move the process forward, a new set of rules were initiated in 2010 by the Ministry of Justice. These rules mandated the merging of the registers to a substantially revised procedure that involved a more active role for the court and, importantly, imposed a duty on registration administrators to file applications for merger proceedings within the following two years. This was complemented by an amendment to the Law on Ownership and Other Real Rights.

An important and complex relationship exists between condominium regulation and public regulation of building permits. In 2006 the legislator introduced a set of new conditions in the Law on Ownership and Other Real Rights for the initial formation and registration of a condominium. The amendments require that an administrative body certifying that a unit is for independent use must also certify that the unit was built in accordance with the relevant building regulations. This change, together with a prohibition against the registration of buildings constructed without building permits, was introduced so as to combat illegal construction. Another of the 2006 amendments brought in the requirement for decreased majorities for resolutions regarding improvements to common parts of the building that are aimed at facilitating the access, movement and work of people with limited mobility.

Generally speaking, the introduction of condominium in Croatian law was not considered a particular novelty, primarily because ownership and special tenancy rights of apartments were firmly established under the previous system. The legal conversion of such rights into condominiums and, in some cases, controlled rental agreements, was a

natural consequence of the transition into a new socio-economic system, and the contemporaneous housing policy and market structure.

4. Common law and mixed legal systems

Although flat and tenement ownership had for a long time been recognised in England54 and Scotland, no special condominium legislation was introduced to cope with the shortage of housing after the two world wars. Prospective flat owners had to rely heavily on the technical skills of conveyancers to devise appropriate flat ownership title conditions to safeguard their rights.55 Legal difficulties were, however, encountered, especially in restricting partition of a multi-apartment building and in guaranteeing a flat owner’s rights with regard to the common parts of the building. Coupled with reluctance on the part of financial institutions to finance flat ownership schemes,56 this led to calls for the introduction of special legislation to regulate apartment ownership.57 The British Law Commission investigated this possibility on three occasions.58 Special condominium legislation was, however, eventually only introduced in 2002 in England and in 2004 in Scotland.

After a fifteen-year period of evolution starting with the Law Commission, and delayed by legislation allowing for collective buy-outs of the freehold as well as for lease extensions, commonhold was introduced in England by the Commonhold and Leasehold Reform Act 2002. The 2002 Act is a first-generation statute, influenced by the New South Wales Conveyancing (Strata Titles) Act 1961 and later legislation.

One of the main reasons for the introduction of commonhold was that the long leasehold system had become discredited. Long leases, at

54Law of Property Act, 1925 s. 205 (I) (ix).

55George and George, The Sale of Flats (1984); Tolson, ‘Land Without Earth – Freehold Flats in English Law’ (1950), pp. 350–7.

56On account of the dubious legal position regarding the enforcement of positive covenants in the case of freehold flats, mortgages are more readily obtainable in England on leasehold than on freehold flats. See Bell, ‘Positive Covenants Relating to Flat Blocks – Law Reform’ (1984), p. 324.

57See esp. Brown, ‘French Co-property of Apartments – a Model for English Law?’ (1966), pp. 591–2, 615–16, 630–1; Bell, ‘Road to Commonhold’ (1988), pp. 285–7 and ‘Positive Covenants’ pp. 323–5.

58Report of the Wilberforce Committee of 1965, the Report on Positive and Restrictive Covenants of 1984 and the Paper on Commonhold – Freehold Flats and Freehold Ownership of other Independent Buildings of 1987.

least of the short length habitually granted by developers, are wasting assets. The management of schemes by some landlord companies and their managers came under scrutiny following complaints about overcharging, inadequate funding of scheme costs, and a lack of provision of reserve funds for major items of work. There was a popular feeling that a lease of a unit is not equivalent to a freehold, and an unsuitable medium for meeting the aspirations towards home ownership. Commonhold was not primarily introduced, as in South Africa, to meet increased demand for urban housing for modest-level income groups. At present, the new tenure could mainly be used for up-market residential and mixed schemes.

To meet some of the complaints against long leases, commonhold confers a freehold on each unit proprietor, overcoming the resentment felt by some long lessees that they were only granted a wasting asset. A private non-trading company with liability of its (unit-holder) shareholders limited by guarantee to not more than £1 sterling, known as the commonhold association, owns the freehold of the common parts. The legislation addresses the problem of poor management by requiring the association directors to draw up an annual budget and set an annually reviewed assessment on all unit-holders.59 To combat nonexistent or inadequate reserve provision, the association must regularly review the state and condition of the scheme building and common parts and regularly consider whether to set up a reserve fund.60 However, it is not compelled to do so unless required by a resolution of an association meeting.

In Ireland, multi-unit developments are based on long leases of units in the scheme building being granted by a developer to initial unit purchasers. The law of long leases is based on the common law, as developed during Ireland’s forced political union with England from 1800 to 1922, as well as after that date when the Irish Free State and, subsequently, the Republic of Ireland (Eire) were established. The policy reflected in the Multi-Unit Developments Bill 2009 is that the long lease system will be streamlined after a detailed review.61 The Bill became the Multi-Unit Developments Act 2 of 2011 on 1 April 2011.

The retention of long leases as the primary base for apartment ownership in Ireland can be defended as follows:

61 Law Reform Commission Report on Multi-Unit Developments (LRC 90 [2008]).

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(a)The length of long leases is substantial. In contrast to the position in England, where long leases usually run for a mere 99–125 years, the Irish equivalents are normally granted for terms of between 300 and 999 years, the latter period being to all intents and purposes equivalent to the grant of a freehold in the units concerned.

(b)The freehold in the scheme land and buildings is generally disposed of by the developer to the Owners’ Management Company on completion of the scheme. By contrast, an English developer can retain a freehold estate in the scheme even after completion, which he can then use for speculative purposes.

(c)Developers, long lessees and mortgagees have become familiar with the current system.

We have seen that tenement buildings have existed in Scotland (especially Edinburgh) since medieval times. As in the case of English flat ownership, relationships in tenement buildings were mainly regulated by title conditions. As a result of a major change of conveyancing practice in the early to mid-nineteenth century, the concept known as real burdens was introduced, which allowed developers to bind owners of land perpetually by real obligations to perform certain actions resulting from their ownership.62 In tenement law, conveyancing practices that were developed on this basis virtually supplanted the common law. Real burdens in essence allow conveyancers to make law for any individual development in any way they see fit. The end result is that the underlying common law is rarely important, or even relevant, in most disputes. It is the real burdens in the actual title that determine all kinds of matters, such as the power and responsibility of maintenance, the decision-making procedure, and the appointment of property managers (known as factors). In fact, these rather complicated matters have often been the standard issues expected to be covered by a deed of conditions from as early as the late nineteenth century in some parts of Scotland, before many European jurisdictions came around to the idea of condominium statutes.63 Essentially, an experienced Scottish conveyancer was entrusted with the power and responsibility of drafting a complete condominium scheme in every development. The task may not be as daunting as it first appears, given that the standard form for a deed of

62Scottish Law Commission, Report on Real Burdens (2000) Scot Law Com no. 181, par. [1.5].

63Conveyancing (Scotland) Act 1874, s.32.