In apartment buildings and housing estates, the place where the will concerning management is formed is the assembly of condominium owners; this organ is the body with the widest authority over the operation of the principal immovable. As a rule, the decisions taken by the assembly produce binding effects for all condominium owners. Not every decision, however, is regarded as lawful. Where the meeting procedure is not observed, where the Act or the management plan is breached, or where an owner’s right is disproportionately curtailed, the action for annulment of a decision of the assembly of condominium owners comes into play.
This type of action is frequently resorted to in condominium ownership practice, but it is a technical remedy hedged about with strict time limits and rules of procedure. Short preclusive periods and the special provision on standing make it essential that the process be devised carefully from the outset.
Below we address, within the framework of the Condominium Ownership Act No. 634, the circumstances in which a decision of the assembly may be annulled, who may bring the action, the period for bringing it, the courts with subject-matter and territorial jurisdiction, and the effects that a judgment of annulment will produce.
What Is an Action for Annulment of a Decision of the Assembly of Condominium Owners?
This action seeks the removal by the court of a decision taken by the assembly of condominium owners where that decision is contrary to the Act, to the management plan or to the law. It is a special type of action that reviews the lawfulness of the management will formed in immovables subject to condominium ownership.
The function of the action is twofold: to prevent an unlawful decision from being implemented and to protect the rights of the condominium owners. If the court concludes that the decision is unlawful, it orders its annulment. Upon annulment the decision loses its capacity to produce legal effects and can no longer be implemented.
Grounds Requiring the Annulment of Assembly Decisions
In practice, the grounds of annulment fall along two main axes: breaches relating to the procedure for meeting and decision-making and unlawfulness arising from the content of the decision. The principal grounds encountered along these two axes are explained below.
Failure to Issue the Notice of Meeting in Due Form
That the notice convening a meeting of the assembly of condominium owners be in due form is a precondition for the validity of the decisions to be taken. Under the Condominium Ownership Act No. 634, the notice must be communicated in writing to all condominium owners, the date of the meeting and the agenda must be clearly stated, and the notification must be made at least fifteen days before the date of the meeting. Where these rules are not observed, the decisions taken may become unlawful and may be made the subject of a request for annulment.
Indeed, one of the principal grounds on which assembly decisions are annulled in practice is that the notice was never delivered to some owners or that service was not effected in due form. In particular, an inability to prove notification to owners who do not actually reside in their independent section may result in the annulment of the decisions.
Failure to Attain the Meeting or Decision Quorum
The validity of assembly decisions depends on the attainment of the meeting and decision quorums laid down in the Act. Under the Condominium Ownership Act No. 634, the assembly meets, as a rule, with the participation of more than half of the condominium owners both in number and in land share; decisions are then taken by a majority of the votes of those attending the meeting. Decisions taken without these majorities being attained are unlawful and their annulment may be sought.
In practice, this breach most often arises in the following forms:
- Decisions being taken at the first meeting although attendance was insufficient
- The second meeting not being held in due form
- Erroneous calculation of the number of participants or of the land-share ratio
- The limits being exceeded in votes cast by proxy
On certain matters the Act requires a quorum heavier than the ordinary majority. Decisions taken on those matters without the qualified majority being attained may likewise be annulled. By way of example:
- Amendment of the management plan → the votes of four-fifths (4/5) of the owners
- Use of common areas otherwise than for the purpose to which they are allocated → the unanimity of the owners
As can be seen, the quorum rules are a fundamental mechanism safeguarding the validity of assembly decisions. A will formed without compliance with these rules may be annulled on the ground of unlawfulness.
Decisions Taken on Matters Outside the Agenda
The matters to be discussed at the meeting must be determined in advance and clearly set out in the notice. As a rule, therefore, no decision may be taken on a matter that is not on the agenda. That condominium owners attend the meeting knowing which matters are to be discussed is decisive for the transparency of the decision-making process and for legal certainty.
The production of a decision on a matter outside the agenda, contrary to this rule, is among the significant procedural errors that may lead to annulment. Decisions taken outside the agenda may become unlawful in particular where some owners were not present at the meeting.
In practice, decisions taken outside the agenda present themselves in the following guises:
- A matter not included in the text of the notice being resolved upon
- A decision of wide scope being given even though the agenda contained only a general expression
- A decision being taken without prior notification on a matter affecting the significant rights and obligations of the owners
- A new item being added to the agenda during the meeting and put to a vote
By contrast, where all condominium owners are present at the meeting and accept unanimously, it is possible for a matter outside the agenda to be discussed and resolved upon. Save for this exception, decisions taken outside the agenda may be annulled on the ground of procedural irregularity.
Decisions Contrary to the Condominium Ownership Act No. 634 or to the Management Plan
For assembly decisions to be valid, they must be in conformity with the provisions of the Condominium Ownership Act No. 634 and with the management plan. Decisions conflicting with the mandatory provisions of the Act or with the rules in the management plan are regarded as unlawful and may be annulled.
The Condominium Ownership Act No. 634 lays down binding rules on many matters relating to the management of the principal immovable. Those rules cannot be altered, nor applied on an interpretation adverse to the owners. Since the management plan is likewise a fundamental instrument binding the condominium owners, assembly decisions are required to be compatible with that text.
Breaches under this heading appear in practice as follows:
- Common expenses being apportioned contrary to the principles laid down in the Act
- Decisions being taken that run counter to the rules of use fixed in the management plan
- Provisions being made that curtail the owners’ right to benefit from the common areas
- Decisions being given without regard to the majority requirements laid down in the management plan
- The rights and obligations of the condominium owners being altered contrary to the Act
Decisions conflicting with the mandatory provisions of the Act cannot be assessed as falling within the assembly’s discretion. Such decisions are regarded as unlawful and may be removed by an action for annulment brought within the prescribed period.
For the complementary framework of the subject, our studies entitled What Is a Management Plan? and The Action for Annulment of the Management Plan may be consulted.
Decisions Excessively Restricting the Right of Ownership
The assembly of condominium owners has the power to take decisions on the management of the principal immovable; that power, however, may not be exercised so as to curtail the owners’ right of ownership out of all measure. The Condominium Ownership Act No. 634 confers on every owner the right to use his or her independent section and the common areas. An unnecessary or excessive restriction of that right may render the decision unlawful and bring its annulment into question.
The assembly may impose certain restrictions with a view to ensuring orderly management. It is essential, however, that the restriction imposed be reasonable, necessary and proportionate. Decisions that in fact extinguish an owner’s right of ownership, or that make its use unnecessarily difficult, may amount to a violation of that right.
Examples of decisions of this nature encountered in practice include:
- Decisions that in fact prevent an owner from using his or her independent section
- Provisions that curtail the right to benefit from the common areas unnecessarily or disproportionately
- The unlawful prohibition of activities that may be carried on in an independent section
- Decisions that make it difficult for an owner to exercise the right of ownership or that reduce the economic value of the immovable
Since such decisions may constitute a disproportionate interference with the right of ownership, they may be annulled on the ground of unlawfulness. The courts assess the conformity of the assembly decision with the principles of necessity and proportionality according to the circumstances of the individual case.
Decisions Contrary to Equity and to the Rule of Good Faith
It is not enough on its own that assembly decisions conform to the Act and to the management plan; those decisions must at the same time accord with equity and the rule of good faith. Decisions that unnecessarily hamper the rights of owners, that impair the principle of equality or that target a particular owner may be regarded as contrary to equity and may be annulled, even where they appear lawful in form.
Although the will of the majority governs in the assembly, an abuse of that power by the majority enjoys no legal protection. Decisions that prejudice owners left in the minority, that lack a reasonable justification, or that are taken out of a motive of personal advantage may be regarded as contrary to the rule of good faith.
The situations that may be assessed within this scope are for the most part as follows:
- Decisions that target a particular owner or that place him or her at a disadvantage compared with the others
- Owners in the same legal position being treated differently
- Common expenses being determined or apportioned by an unfair method
- The power of the majority being used so as to leave owners in the minority in difficulty
Even where there is no breach of an express statutory provision, such decisions may be annulled on the ground of contravention of equity and of the rule of good faith. Assembly decisions are therefore expected to be balanced and fair not only in form but also in content.
Who May Bring the Action for Annulment?
The action for annulment is not a right accorded to everyone; it may be brought by persons who satisfy the conditions required by the Act. The Condominium Ownership Act No. 634 confers the right of action on those condominium owners who are legally affected by the decision taken and whose interests are impaired. As a rule, therefore, the claimant must hold the capacity of condominium owner or must have been directly affected by the decision.
In practice, the right of action arises most often in respect of owners who attended the meeting and dissented from the decision and of owners who were unable to attend at all. Where the independent section has subsequently been transferred, it is also possible, on certain conditions, for the new owner to bring an action. The persons having capacity to bring an action are addressed below in groups.
The Condominium Owner Who Attended the Meeting and Dissented from the Decision
An owner who was present at the meeting and expressly voted against the decision taken may request its annulment. At this point it is of great importance that the dissenting vote be entered in the minutes of the meeting and, if possible, that its grounds also be recorded. Otherwise, proof of the record of dissent may become difficult in any action brought later.
In practice, attention should be paid in particular to the following points:
- The owner who considers the decision unlawful expressly voting against it at the meeting
- The dissenting vote being entered in the minutes of the meeting
- Where possible, the grounds of the dissenting vote being shown in the minutes
An owner who fulfils these conditions may bring an action for the annulment of the assembly decision within the prescribed period.
The Condominium Owner Who Did Not Attend the Meeting
An owner who did not attend the meeting also has the right to bring an action for annulment if he or she considers the decision unlawful. Absence from the meeting does not on its own extinguish the right of action. In that case, however, the period for bringing the action begins to run from the date on which the decision was learned of.
An owner’s inability to attend the meeting may rest on various reasons. Foremost among them are that the notice was not issued in due form or that the owner was entirely unaware of the meeting. In such situations the owner must bring the action within the statutory period running from the date on which he or she learned of the decision.
The right of action of an owner who did not attend the meeting arises most often in the following circumstances:
- No notice having been issued to him or her at all
- The notice not having been served in due form
- An inability to attend because he or she could not learn of the meeting
- The decision taken infringing his or her rights notwithstanding the non-attendance
Owners who were not present at the meeting must therefore follow the period for bringing an action scrupulously from the moment they learn that a decision affecting them has been taken.
The Right of Action of Tenants and Other Interested Persons
Although the action for annulment is as a rule a remedy accorded to condominium owners, it is accepted that in certain circumstances tenants or other interested persons may also bring an action. The right of action of such persons may arise in particular where the decision taken directly affects the tenant’s right of use or impairs his or her legal interest.
That right is nevertheless not unlimited. In order to bring an action, the decision must affect those persons directly and currently. A merely indirect relationship of interest is not regarded as sufficient for the purposes of the right of action.
The situations in which a tenant or other interested person may bring an action are for the most part as follows:
- A decision being given that directly curtails the tenant’s ability to benefit from the independent section
- A provision being made that changes the purpose of use of the leased independent section or that prevents its use
- A decision concerning the use of the common areas directly affecting the tenant’s daily use
- A decision being formed by the management that imposes a burden directly on the tenant
For example, the complete prohibition of the activities that may be carried on in the leased independent section, or the prevention of the tenant’s use of the common areas, are among the decisions that directly affect a tenant’s legal interest. In such cases the tenant too may have recourse to an action for the annulment of the assembly decision.
Period for Bringing the Action
The action for the annulment of an assembly decision is an action that must be brought within a specified period. Under the Condominium Ownership Act No. 634 that period is, as a rule, one month, and letting it lapse extinguishes the right of action. The time limit is therefore one of the most critical headings in actions for annulment.
The starting point of the period varies according to whether the owner attended the meeting. For owners who were present at the meeting the period runs from the date of the decision, whereas for owners who did not attend the date on which the decision was learned of is taken as the basis. In both cases the correct calculation of the period is decisive.
In practice the position as to the time limit may be summarised as follows:
- For an owner who attended the meeting → 1 month from the date of the decision
- For an owner who did not attend the meeting → 1 month from the date on which the decision was learned of, and in every case the action must be brought within 6 months from the date of the decision.
- Since the period is preclusive in character → it is taken into account by the court of its own motion
- Where the period has been allowed to lapse → the unlawfulness of the decision does not on its own suffice to bring an action
In actions for the annulment of assembly decisions it must therefore be assessed, before the unlawfulness of the decision is debated, whether the period for bringing the action has expired. Proof of the date of knowledge in particular is a matter that frequently gives rise to dispute in practice.
The Period in Cases of Absolute Nullity and Non-Existence
Where a decision taken by the assembly is manifestly contrary to mandatory rules of law, to public order or to morality, that decision may be regarded as invalid. In such a case the decision may be characterised not merely as one capable of annulment but as a decision that is non-existent or vitiated by absolute nullity.
In respect of decisions of this nature, the one-month and six-month periods in the Condominium Ownership Act No. 634 do not apply. In other words, where absolute nullity or non-existence is in issue, the persons concerned may bring a declaratory action at any time.
The decisions that may be assessed within this scope in practice are for the most part as follows:
- The taking of a decision that renders an owner’s right of ownership wholly inoperative
- The unlawful allocation of common areas to a particular person
- The making of a provision manifestly contrary to the mandatory provisions of the Act
- The production of a decision on a matter falling outside the assembly’s sphere of competence
For this reason, in actions for annulment it must first be correctly established whether the decision is one capable of annulment or one vitiated by absolute nullity or non-existent.
The Judicial Process
The action for the annulment of an assembly decision is heard in particular courts as a special dispute arising from condominium ownership. Bringing the action in the correct court is important for the sound progress of the proceedings. Where an action is brought in a court lacking subject-matter or territorial jurisdiction, it may be dismissed on procedural grounds or the file may be transferred to another court.
Courts with Subject-Matter and Territorial Jurisdiction
In actions for the annulment of an assembly decision, the court with subject-matter jurisdiction is as a rule the Civil Court of Peace. Since these actions are assessed as falling within disputes arising from the Condominium Ownership Act No. 634, they are heard in the civil court of peace irrespective of the value of the action.
The court with territorial jurisdiction is, as a rule, the court of the place where the principal immovable is located. The action is accordingly brought in the civil court of peace of the place where the immovable subject to condominium ownership is situated.
Standing
In these actions, standing is as a rule directed against the manager as representative of the condominium owners. Article 38 of the Condominium Ownership Act No. 634 charges the manager with representing the condominium owners, and in actions concerning assembly decisions the manager holds the capacity of respondent as representative of the owners.
Condominium Ownership Act No. 634 Art. 38
“The manager is liable to the condominium owners exactly as an agent.
(Paragraph added: 14/11/2007-5711/Art. 19) Actions concerning the annulment of decisions of the assembly of condominium owners, of the assembly of block representatives or of the assembly of representatives of a collective structure may be brought by directing standing against the manager as representative of the condominium owners, and in collective structures against the manager elected by the assembly of block representatives or by the assembly of representatives of the collective structure. The manager shall announce the action brought to all condominium owners and to the assembly of block representatives or of the collective structure. Where the assembly decision is annulled, the litigation costs on this matter shall be met from the common expenses.”
In actions for the annulment of an assembly decision, the claimant need not name all the owners individually as respondents. It is regarded as sufficient that the manager appear in the respondent’s column in the capacity of representative of the owners. This approach has been adopted in order to preserve procedural economy and to prevent the proceedings from being unnecessarily prolonged, particularly in apartment buildings and housing estates with a high number of independent sections.
Court Fees and Litigation Costs
By their nature, actions for the annulment of an assembly decision are subject to a fixed court fee. When the action is brought, the fee is therefore calculated not on the value of the action but on the fixed amount laid down in the legislation.
The costs arising in the course of the proceedings are apportioned between the parties according to the outcome of the action. As a rule, the losing party is liable to meet the litigation costs and the counsel’s fees of the opposing party.
Evidence and the Burden of Proof
In this action the burden of proving that the decision is unlawful lies on the claimant. It is therefore of great importance that the documents demonstrating the procedural or legal irregularity of the decision be submitted to the file when the action is brought.
The items of evidence most often resorted to in practice are as follows:
- The minutes of the meeting of the assembly of condominium owners
- The entries in the decision book
- The notice convening the meeting and the documents of service
- The management plan
- Witness statements
- Where necessary, an examination by a court-appointed expert
Whether the notice was issued in due form, whether the requisite majority was attained and whether the decision is contrary to the Act are for the most part assessed on the basis of these documents.
Effects of a Judgment of Annulment
Upon the annulment of an assembly decision by the court, the decision loses its legal validity and can no longer be implemented. The effect of the annulment is not confined to the owner who brought the action; it produces effects for all condominium owners.
Retroactive Effect of the Judgment
An annulled decision as a rule produces retroactive (backward-reaching) effects. In other words, a decision annulled by the court is deemed invalid from the outset and is regarded as never having produced legal effects.
The practical repercussions of this become apparent in particular in the following situations:
- The restitution of common expenses collected without justification being sought
- Transactions carried out in reliance on the unlawful decision being regarded as invalid
- Compensation for the losses suffered by the condominium owners coming into question
Nevertheless, in situations such as where the decision has already been implemented or where the rights of third parties are affected, the court may make a different assessment according to the particular features of the individual case.
Independent Legal Assessment
In disputes concerning decisions of the assembly of condominium owners, the number of files lost without the merits being reached is not to be underestimated. The principal reason for this is the shortness of the one-month preclusive period and the fact that the date of knowledge is in most cases not evidenced in writing. If no record of dissent was entered at the meeting, or if the documents of service have not been kept, even a claim that is well founded on the merits may fall foul of a procedural obstacle.
The second critical threshold in the assessment is establishing whether the decision is one capable of annulment or one that was invalid from the outset. Where a decision is vitiated by absolute nullity, the obstacle of the time limit may be overcome; framing this distinction correctly at the pleading stage may secure the protection of a right that appears to have been lost.
In a concrete matter the following headings should be addressed first:
- Establishing the date of the decision and the date of knowledge on the basis of documents and calendaring the time limits
- Verifying the quorum calculation from the minutes of the meeting and the decision book
- Examining whether the procedure for convening the meeting and the fifteen-day notification requirement were observed
- Assessing the decision’s connection with the agenda and any claim that it fell outside the agenda
- Clarifying whether the request is one for annulment or for a declaration of non-existence or absolute nullity
- Directing standing against the manager as representative of the condominium owners
Independent Legal provides advisory services and conducts litigation throughout the whole process in disputes arising from condominium ownership, from the judicial review of assembly decisions to the implementation of the effects of a judgment of annulment.