- Real Estate, Renting and Co-ownership
- Alain De Jonge
- forced co-ownership , apartment building , building manager , association of co-owners
Legislation concerning apartment building has already been amended many times recently.
The last change dates from 2 June 2010 (modified and supplemented by the law of 15 May 2012). This law stipulated that the building manager should adapt the existing basic act, the internal rules of co-ownership and the internal regulations to the new law and submit these adaptations to the general meeting of the co-owners before 1 September 2013. This period has been extended by successive laws and has expired. This adaptation has not been carried out by all associations of co-owners since they did not wish to incur the necessary costs.
Changes to make the management of apartment buildings more efficient
The governmental agreement of the current government of 9 October 2014 states that government
will ensure a particular follow-up regarding the management of the co-ownerships and the associated
costs. In this context, the government would analyse, modify or supplement the effects of recent
legislative changes in consultation with the various actors in the sector.
This intention was repeated in Minister Koen Geens' general policy documents of 10 November 2015 and 3 November 2016. Between these general policy documents, Minister Koen Geens set up a working group chaired by two professors and various actors in the sector. On 7 March 2017, the memorandum of recommendation of the working group on co-ownership was presented.
In this memorandum, the working group makes concrete proposals for legislative changes to make the management of apartment buildings more efficient.
Indeed, it has been found that there are, in many apartment buildings, conflicts between co-owners, who in most cases have not chosen to live together in a building. They often have different incomes and therefore are not all able to approve the necessary repairs. There is also a distinction between owners who live in their apartment and owners who rent their apartment. The latter group generally considers that certain works or repairs are not necessary. This leads to conflicts and deadlocks.
The memorandum of recommendation seeks to remedy these problems and contains four main lines of action.
Minister Geens announced that he would transpose these recommendations into a new law.
Please find below a brief overview of the four main lines of action:
A first line of action concerns the flexibility in the operation of the association of co-owners
and its bodies.
For certain decisions of the general assembly of the co-owners, a qualified majority is required, for example 3/4 for a modification of the statutes or to work on the common parts or the setting up and composition of a board of co-ownership. A 4/5 majority is required for, among other things, rebuilding the property or repairing the damaged area in the event of partial destruction or changing the destination of the building or part of it. Unanimity is required for the complete reconstruction of the property.
Qualified majorities will be made more flexible and streamlined. For a total reconstruction, the requirement of unanimity will no longer apply. For demolition or complete reconstruction of the building for reasons of hygiene or safety or where the cost of adapting to the legal provisions would be excessive, a 4/5 majority will now be sufficient. A co-owner may transfer his lot in favor of the other co-owners if its value is less than the total cost of the works. The price of this lot will be determined by mutual agreement or by the court.
For work imposed by law (such as replacement of elevators) and the work necessary to preserve the property and the provisional management of the common parts, it may be decided by an absolute majority (50% + 1).
If the law still imposes unanimity (for example, for the modification of the distribution of the co-ownership shares) and if this unanimity is not achieved at the general meeting due to the absence of one or more co-owners, a new general meeting shall be held after a period of at least thirty days during which the decision in question may be taken unanimously by all the co-owners present or represented.
When the decision is still blocked, and if the financial balance of the co-ownership is compromised or if the association of the co-owners considers that it is impossible to ensure the preservation of the building or its conformity with the legal obligations, a provisional administrator may be appointed. This appointment can be requested by the building manager or one or more co-owners. This provisional administration will be able to substitute the general meeting of the co-owners in defined circumstances. The cost of the provisional administrator is at the expense of the co-ownership.
A second line of action is to optimize the efficiency within the co-owners' associations.
The statutes will be reduced, so that it will not be absolutely necessary to change the statutes by notarized deed for any future changes to the law.
Today, in-house rules are optional, but it will become mandatory and will include at least:
(i) the rules governing the convening, working method and powers of the general meeting, and the amount of assignments and the contracts for which competition is mandatory, meaning that several tendering offers must be requested for;
(ii) the method of appointing the building manager, his powers, the duration of the appointment, etcetera; and
(iii) the annual period of fifteen days during which the annual general meeting of the co-owners will take place.
The co-owners are required to contribute to the reserve fund for the benefit of the stability of
the management of the building.
A third line of action concerns the rebalancing within the apartment building.
When a joint part of the building or group of buildings is the sole responsibility of certain co-owners by the in-house rules (for example an elevator and staircase), only the co-owners concerned can participate in the voting provided that these decisions do not jeopardize the joint management of the apartment building. This is the introduction of the principle of "the payer decides". Also with this measure one tries to avoid a blockage of decisions.
The fourth line of force provides for a clarification on many levels to the co-owners.
The recommendations of the working group still need to be converted into a bill, and this bill is still to be discussed in the parliament.
We will follow this legislation closely.