The operation of a main immovable subject to condominium ownership rests to a large extent on the document known as the management plan. That text sets out how the immovable is to be administered, on what principles the common areas are to be used, and the reciprocal obligations of the owners. Not every arrangement contained in the management plan must, however, stand in law; provisions contrary to statute, or narrowing an owner’s right disproportionately, may be removed by way of an action.
Looking at practice, these actions are seen to be concentrated around particular subject headings: rigid prohibitions imposed on the use of an independent unit, arrangements conferring privileges on certain owners in the enjoyment of the common areas, and methods of calculation that upset the balance in the apportionment of expenses. Provisions of this kind constitute the most fertile source of disputes among unit owners.
In this briefing note we address the substantive and procedural conditions upon which a claim for annulment of the management plan depends, against whom the action is to be brought, what regime applies in terms of time limits, and what kind of consequences the decision to be given will produce in respect of the immovable.
What Is an Action for Annulment of the Management Plan?
The management plan produces effects in the manner of a contract concluded among the unit owners; but that contractual character does not mean that the plan falls outside review. The fact that it was drafted by the will of the parties does not legitimise a provision contrary to statute. To the extent that an incompatibility exists, the arrangement in question may be removed by a decision of the court.
As regards the fundamental concepts of the subject, our study entitled What Is a Management Plan? offers reading of a complementary character.
The Legal Nature of the Management Plan
Article 28 of the Condominium Ownership Act No. 634 positions the management plan as a contract determining the mode of administration of the main immovable, the principles governing its use, and the rights and obligations of the owners of independent units subject to condominium ownership. The plan is one of the constitutive documents of condominium ownership and carries binding force in respect of all the owners.
That said, this contract cannot be placed on the same footing as an ordinary contract of private law. The distinguishing features of the management plan may be listed as follows:
- It produces effects upon the whole of the unit owners without exception
- Persons who subsequently acquire an independent unit likewise become subject to the plan
- It draws the framework of the scheme of administration of the main immovable
- It cannot step outside the mandatory provisions of the statute
By reason of these features the management plan is characterised as a hybrid document combining both a contractual and a regulatory character.
The Difference Between Annulment and Amendment of the Management Plan
In practice these two concepts are frequently found used interchangeably; yet there is a distinct difference between them both in purpose and in procedure.
Amendment of the management plan is a transaction effected by the unit owners of their own will and, pursuant to the Condominium Ownership Act No. 634, requires a resolution of a four-fifths (4/5) majority of the owners. Annulment, by contrast, rests not on will but on an allegation of unlawfulness and produces effects only by a judicial decision.
The distinction may be gathered under the following four headings:
- Amendment → rests on a resolution of the unit owners
- Annulment → rests on a decision of the court
- Amendment → is subject to a qualified majority requirement
- Annulment → is subject to the requirement of unlawfulness
Substantive Grounds Requiring Annulment of the Management Plan
Although it is a contract binding upon the unit owners, the management plan cannot exceed the limit drawn by mandatory rules of law. Where an arrangement contained in the plan is contrary to law, a claim for annulment comes into consideration. Not every dissatisfaction produces the result of annulment, however; for the court to intervene, the incompatibility must be demonstrated in clear and concrete terms.
Provisions Contrary to Statute
The management plan must be compatible with the relevant legislation, foremost the Condominium Ownership Act No. 634. Provisions of the plan conflicting with an express arrangement of the statute are not deemed valid and may be made the subject of annulment.
Examples that may be assessed within this scope:
- Provisions wholly removing the owners’ obligation to contribute to the common expenses
- Arrangements narrowing the right to attend a meeting or to vote
- Articles altering the decision-making quorums laid down in the statute
Incompatibility with Mandatory Rules of Law
Mandatory rules are provisions concerning public order in respect of which the parties have no power to agree otherwise. It is not possible to step outside these rules by way of the management plan.
The following arrangements constitute an incompatibility of this kind:
- Provisions touching the essence of the right of property and rendering the right inoperative
- Arrangements leaving the enjoyment of the common areas to the monopoly of particular owners
- Articles permitting a use expressly prohibited by the statute
Provisions of this character do not acquire validity even where the whole of the unit owners have given their approval, and they may be annulled.
Provisions Disproportionately Narrowing the Right of Property
The management plan cannot contain arrangements that would remove a unit owner’s right of property altogether or restrict it disproportionately. It is of course possible for certain limitations to be introduced in the interests of the orderly conduct of communal life; but those limitations must be reasonable, proportionate and serve a lawful purpose.
Disproportionality shows itself in the following examples:
- Provisions prohibiting the use of the independent unit in its entirety
- Arrangements absolutely preventing an owner from letting his independent unit
- Restrictions rendering enjoyment of the immovable impossible in fact
Provisions Impairing the Principle of Equality
In the scheme of condominium ownership, equality as regards the rights and obligations of the owners is fundamental. Provisions of the plan conferring privileges on certain owners, or imposing heavier burdens on particular owners by comparison with the others, may be regarded as contrary to law.
Situations that may be assessed under this heading:
- Exempting the owners of particular independent units from the obligation to bear the common expenses
- Reserving the enjoyment of the common areas to one group of owners alone
- Providing for a different regime of dues for independent units similar in character and size
The Application of the Management Plan Becoming Factually Impossible
An arrangement contained in the plan losing its applicability over time may likewise constitute a ground of annulment. Changes occurring in the physical structure of the main immovable in particular, or an alteration in the conditions of use, may render certain provisions inoperative.
The following may be counted within this scope:
- Arrangements that have become inapplicable owing to a change in the physical structure of the building
- Provisions that have lost their meaning as a result of a change in the character of the common areas
- Rules of use founded on an element that does not exist in fact
Procedural Requirements for Bringing the Action
Raising an allegation of unlawfulness on its own is not sufficient for the action to be examined on the merits. The claimant must have a legal interest, must possess the capacity to bring the action, and the subject matter of the action must be a provision of the plan of a character capable of annulment. These conditions constitute the preconditions for the proceedings passing to the merits.
The Claimant’s Legal Interest
For the claim for annulment to be entertained, the claimant must have been directly affected by the arrangement forming the subject matter of the action, or a right of his must have been infringed by reason of that arrangement.
An allegation of unlawfulness remaining at an abstract level is not deemed sufficient to bring an action. The claimant is expected to establish that the provision he seeks to have annulled causes a loss, or a concrete risk, in his own legal position.
By way of example of persons accepted as having a legal interest:
- A unit owner the use of whose independent unit is limited by a provision of the plan
- An owner whose rights concerning the use of the common areas are narrowed
- An owner whose obligation to pay dues is directly affected
may be cited.
Persons Entitled to Bring the Action
The action for annulment is as a rule brought by one of the unit owners. Since the management plan is a contract binding upon the unit owners, they are also the group most directly affected by any unlawfulness of the plan.
Those possessing the capacity to bring the action are generally as follows:
- Unit owners
- Where co-ownership in shares is in question, the co-owners
- Owners of independent units subject to condominium ownership
By contrast, the following persons may as a rule not claim annulment of the management plan:
- Tenants
- Persons residing in an independent unit but not holding the capacity of owner
- Third parties having no legal connection with the immovable
Provisions That May Be Made the Subject of the Action
In this action the subject matter is a particular arrangement contained in the management plan. For the claim to be met, the matter whose annulment is sought must genuinely be found in the text of the plan.
The provisions most frequently made the subject of an action in practice are as follows:
- Limitations imposed on the use of the independent unit
- Articles regulating the use of the common areas
- Provisions concerning dues and the apportionment of expenses
- Arrangements concerning the mode of administration or the decision-making quorums
A practice in fact that is not reflected in the plan, or a transaction carried out by the organ of administration on its own, cannot be made the direct subject matter of an action for annulment of the management plan.
The Distinction Between Resolutions Adopted on the Basis of the Plan and the Action for Annulment
One of the most widespread errors encountered in practice is the targeting, by means of an action for annulment of the management plan, of resolutions of the general assembly of unit owners adopted on the basis of that plan. Yet the text of the plan and the resolutions adopted on the basis of that text are different legal transactions and are subject to separate types of action.
The distinction may be summarised as follows:
- If the unlawfulness arises from the arrangement in the management plan → an action for annulment of the management plan
- If the unlawfulness arises from a resolution of the general assembly of unit owners → an action for annulment of the resolution
Making this characterisation correctly from the outset prevents the claim being dismissed on procedural grounds because the wrong type of action has been chosen.
The Regime of Time Limits in Actions Concerning the Management Plan
The Condominium Ownership Act No. 634 has not provided for an expressly regulated special preclusive period as regards actions to be brought against provisions of the management plan. That gap does not mean that every dispute concerning the plan may be litigated for all time.
The regime of time limits differs according to the nature of the claim:
- Actions for the annulment of resolutions of the general assembly of unit owners are, pursuant to Article 33 of the Condominium Ownership Act No. 634, subject to preclusive periods of 1 month and, in every case, 6 months.
- Where the incompatibility of a provision of the management plan with mandatory rules of law is asserted, what is in question is in most cases not an annulment in the technical sense but the invalidity of the provision (non-existence or absolute nullity).
In cases where an allegation of invalidity is in question:
- The incompatible provision may be regarded as void from the outset
- That allegation may as a rule be raised without being bound by any period
- The condition of legal interest is separately reviewed according to the features of the concrete case
To gather the position together, actions concerning the management plan:
- Are not subject to a single regime of time limits
- Are assessed separately according to the nature of the claim (annulment / invalidity / non-application)
- May be raised without any limitation of time where there is an incompatibility with mandatory rules
In conclusion, it cannot be said that there is a possibility of bringing an action without limitation of time in respect of every unlawfulness in the plan. By contrast, the invalidity of provisions conflicting with mandatory rules of law may as a rule be raised at any time and may be taken into account by the court of its own motion.
Against Whom Standing Is to Be Asserted
In actions concerning the management plan, to whom the capacity of respondent belongs is determined according to the legal nature of the dispute; there is no single solution. It must first be clarified whether the dispute arises from a claim of annulment or invalidity directed at the original text of the plan at the stage of its establishment, or from the annulment of a resolution of amendment adopted by the general assembly of unit owners.
Correct identification of standing is one of the fundamental procedural requirements for the action to be heard on the merits.
Standing in Actions Directed at the Original Provisions of the Plan
Where the action is founded on the original content of the management plan, or on the incompatibility of a provision in force with mandatory rules, with public order or with the essence of the right of property, the subject matter of the dispute is the text of the plan itself.
Legal Nature
These actions are not actions for the annulment of a resolution of the assembly; they bear the character of a claim for the annulment of the contractual provision contained in the management plan, or for a declaration of its invalidity.
Standing
Since the management plan is a multilateral arrangement binding upon all the unit owners, the annulment of a provision or a declaration of its invalidity touches the legal sphere of all the owners. For this reason it is fundamental that standing be asserted against the whole of the unit owners other than the claimant.
In actions of this kind all the owners must be named as respondents. In practice, where some owners have been left out, the court may grant time for the constitution of the parties to be completed; if the deficiency is not remedied within the time granted, the action may be dismissed on procedural grounds.
Risk
Asserting standing against the manager alone may lead to dismissal of the action on the ground that the parties have not been properly constituted or that the capacity to be sued is lacking, or to the proceedings being needlessly prolonged.
Standing in the Annulment of Resolutions Amending the Management Plan
Where the dispute is directed at the annulment of a resolution adopted, by the majority required under Article 28 of the Condominium Ownership Act No. 634, by the general assembly of unit owners convened for the purpose of amending the existing plan, the action is technically an action for the annulment of a resolution of the assembly.
Power of Representation
Since Article 38 of the Condominium Ownership Act No. 634 charges the manager with representing the unit owners, it is possible in actions for the annulment of resolutions of the assembly for standing to be asserted against the manager. In that event the manager is bound to notify the owners of the action and to conduct the necessary defence.
Practice
It is not obligatory for the claimant in actions of this kind to name the whole of the owners individually as respondents. Asserting standing against the manager, as representing the unit owners, is regarded as sufficient.
This solution is a facility of representation which has regard to procedural economy and is aimed at preventing the proceedings from being needlessly prolonged.
The Importance of the Distinction in Terms of Procedural Law
The distinction between actions directed at the original provisions of the plan and actions for the annulment of resolutions amending the plan determines not only who the respondent is to be, but also the regime of time limits to be applied.
In the Annulment of a Resolution of the Assembly
The periods in Article 33 of the Condominium Ownership Act No. 634 come into play:
- 1 month from the time the resolution becomes known
- In every case, 6 months from the date of the resolution
These periods are preclusive in character.
In the Annulment of a Provision of the Plan or a Declaration of Its Invalidity
Where a provision of the management plan is manifestly contrary to mandatory rules or to public order, a claim for a declaration of invalidity is as a rule not subject to any particular preclusive period.
Not every unlawfulness produces the result of absolute nullity, however. For this reason, whether time runs is assessed on the basis of the concrete case according to the nature of the incompatibility asserted.
The Problem of Legal Personality of Housing Estate and Apartment Managements
Apartment and housing estate managements do not possess an independent legal personality. For this reason it is technically erroneous to write only “The Management of X Housing Estate” or “The Management of Y Apartment Building” in the respondent field of the statement of claim.
Standing must be asserted in accordance with the proper procedure. Within this framework the action must be brought;
- Directly against the names of the unit owners
or
- Against the manager, as representing the unit owners, pursuant to Article 38 of the Condominium Ownership Act No. 634
The matter in question is one of the most frequently repeated procedural errors in actions concerning the management plan.
The Course of the Proceedings
The Court with Subject-Matter and Territorial Jurisdiction
Claims for annulment of the management plan are among the disputes arising from condominium ownership, and subject-matter and territorial jurisdiction are determined by the provisions of the Condominium Ownership Act No. 634. Since these rules concern public order, they are taken into account by the court of its own motion.
The Court with Subject-Matter Jurisdiction
In actions for annulment of the management plan, subject-matter jurisdiction belongs to the Civil Court of Peace. Disputes concerning condominium ownership fall by their nature within the field of jurisdiction of the civil courts of peace.
The action is accordingly brought in the civil court of peace, whatever the value of the immovable.
The Court with Territorial Jurisdiction
As to territorial jurisdiction, the court for the place where the main immovable is situated is decisive. Pursuant to the Condominium Ownership Act No. 634 this jurisdiction bears the character of exclusive jurisdiction.
Its practical consequences are as follows:
- The action may be heard only in the court for the place where the immovable is situated
- The parties cannot make an agreement conferring jurisdiction on the court of another place
- The court is bound to take want of jurisdiction into account of its own motion
For this reason the action for annulment must be brought in the civil court of peace in the place where the immovable is situated.
Evidence and Proof
In an action for annulment of the management plan the burden of proof lies as a rule on the claimant. The claimant is expected to establish by concrete evidence that the arrangement in the plan is contrary to law or infringes his rights. The court, examining the content of the plan and its application in fact within the framework of the evidence submitted by the parties, determines whether an incompatibility exists.
Accordingly, when the action is brought it is not enough to make an assertion; the material facts on which the assertion rests must be supported by documents and by other evidence.
The Principal Items of Evidence
The fundamental item of evidence in these actions is the management plan whose annulment is sought. Alongside it, documents showing the legal position of the immovable and the practice of its administration are also decisive in the proceedings.
The items of evidence frequently relied upon are as follows:
- The text of the management plan
- Land registry records and the documents of condominium ownership
- Resolutions of the general assembly of unit owners
- The architectural project and the list of independent units
- Records of dues and expenses
- Correspondence, formal notices and notifications
- Photographs, video recordings or records of on-site examinations
- Witness statements
Expert Examination and Technical Assessment
Where the dispute requires technical or legal expertise, it is frequently seen that the court has recourse to an examination by a court-appointed expert. In controversies concerning the use of the common areas in particular, and in allegations of incompatibility with the architectural project, the expert report may prove decisive of the outcome.
The Consequences Produced by the Court’s Decision
When the decision given at the conclusion of the action for annulment becomes final, the legal existence of the annulled provision comes to an end retrospectively or, according to the nature of the decision, prospectively. The annulment decision given bears a constitutive (right-creating) character and brings to an end the binding force of the relevant parts of the plan in respect of all the unit owners and their universal and singular successors (the new owners).
At this point it should be recalled that the institution of “judicial intervention in a contract” is a limited one in Turkish law. As a rule the court does not lay down a new rule in place of the provision it has annulled; only where it is regarded as necessary for the continuation of the scheme of administration may a lawful arrangement be established by way of judicial intervention.
Annulment of the Management Plan in Its Entirety
Where there is a fundamental defect in the process by which the plan was created (the absence of the signatures of all the owners, forgery and similar cases), or where the articles forming the backbone of the plan are radically incompatible with mandatory provisions (Arts. 20, 24, 28 and the like of the Condominium Ownership Act No. 634), the court may order the annulment of the plan in its entirety.
- Filling the statutory gap: Annulment of the plan in its entirety does not leave the main immovable without a management plan. In such a case the provisions of the Condominium Ownership Act No. 634 are applied directly and in full.
- Exceptional character: By virtue of the “principle of upholding”, what is fundamental in practice is the annulment of the defective articles alone rather than of the whole plan. Complete annulment is an exceptional outcome peculiar to cases in which the plan has entirely lost its applicability.
Annulment of Particular Provisions (Partial Annulment)
The great majority of these actions are directed not at the whole of the plan but at particular articles of it; imbalances in the apportionment of common expenses, the use of appurtenances, or the powers of the organ of administration may be cited as examples of such articles.
- Legal continuity: The articles other than the provision annulled continue to be valid and binding.
- Limited effect: The gap arising by reason of the annulment is filled in the first place by the relevant articles of the Condominium Ownership Act No. 634.
Drawing Up a New Management Plan and Judicial Intervention
Where, following the annulment, the unit owners are unable to make a new arrangement by a four-fifths majority, recourse may be had to judicial intervention in order to remedy the gap that may arise in the administration of the main immovable.
In the law of condominium ownership it is fundamental that the scheme of administration should not be interrupted. For this reason the gap or uncertainty arising where the requisite majority cannot be attained may be remedied by a decision of the court.
The Scope and Limits of the Judge’s Power: In resolving the dispute the judge establishes a lawful arrangement having regard to the features of the concrete case. The aim here is not to substitute for the will of the owners but to construct the legal solution that will enable the scheme of administration to function. The judge’s power is not unlimited, however.
- Conformity with statute: In determining the arrangement that is to take the place of the annulled provision, the judge cannot give a decision contrary to the mandatory provisions of the Condominium Ownership Act No. 634. Statutory criteria such as the principle of the land share in the apportionment of expenses cannot be disregarded.
- Review of equity and objectivity: The judge, examining concrete data such as the structure of the building, the presence of luxury facilities and the habits of use, establishes the fairest solution in the form of a judicial decision.
- Power to remedy a gap in administration: The decision given constitutes an arrangement that will take the place of the resolution the general assembly of unit owners was unable to adopt by the requisite majority, and secures the continuity of the administration.
- The character of the judge’s decision: The arrangement determined by the judge is applied in the same way as a provision of the management plan and binds all the unit owners.
This intervention does not set aside the will of the owners altogether. The unit owners continue to retain their power to amend the management plan should they attain the requisite majority.
Whom Does the Annulment Decision Bind?
Since the management plan is by its character a “collective contract”, a court decision concerning that plan concerns not the law of the person but the law of the immovable. Its consequences are as follows:
- General binding force: The annulment decision binds all the unit owners, whether or not they were parties to the action, those who subsequently acquire an independent unit, and the holders of usufruct or servitude rights.
- The manager’s responsibility: Once the decision has become final, the manager cannot carry out transactions such as the levying of dues or the imposition of prohibitions on the basis of the annulled article. Conduct to the contrary gives rise to the manager’s civil and criminal liability.
- Annotation on the land register: The final decision is submitted to the land registry directorate so that an annotation is entered on the existing management plan document; the effect of the decision thereby acquires publicity.
Independent Legal Assessment
In disputes concerning the management plan the fate of the action is in most cases determined in the first statement of claim. Where it is not correctly characterised whether the claim is for the annulment of a resolution of the assembly or for a declaration of the invalidity of a provision of the plan, consequences difficult to make good arise both as regards standing and as regards time limits. Separating these two axes at the outset forestalls a decision of dismissal given without entering upon the merits.
Another critical point in practice is the constitution of the parties. In buildings containing a large number of independent units, correctly identifying the whole of the owners requires meticulous preparatory work to be conducted through the current land registry record.
In establishing a road map in a concrete file, the following headings should be given priority:
- Clarifying whether the dispute rests on a provision of the plan or on a resolution of the assembly
- Analysing whether the incompatibility asserted produces the result of annulment or of absolute nullity
- Diarising the preclusive periods of 1 month and 6 months in claims founded on a resolution of the assembly
- Naming all the unit owners as respondents in actions directed at the original provisions of the plan
- Avoiding naming the respondent party as “the housing estate management”
- Documenting the allegation of unlawfulness by means of the text of the management plan, the project and the records of expenses
Independent Legal provides advisory services and litigation support throughout the whole of the process in disputes arising from condominium ownership, from the legal review of the management plan to the reflection of the annulment decision in the land register.