Headline article

Co-ownership: appeal against a decision of the general meeting

by Lex Thielen ¹

1. The subject of the appeal

The law provides for appeal only against "decisions of general meetings".
A general meeting as such can not be canceled, since only the decisions are voidable. The applicant co-owner must therefore, if necessary, request the annulment of all decisions taken at the general meeting in question.
In addition, there must have been a decision, even if it was irregular. An appeal against a discussion or a simple proposal would not be admissible.
Finally, the decision must have been taken at a general meeting. A decision taken for example by certain co-owners outside any general meeting has no legal effect; such a decision need not be annulled because it is considered non-existent.

2. The nature of the appeal

The co-ownership is governed by the amended law of 16 May 1975 on the status of the co-ownership as well as by its Grand-Ducal Implementing Regulation of 13 June 1975.
While the principles concerning the general meetings of the syndicate of co-owners contained in the aforementioned law are imperative and of public order - the law specifying itself that all contrary clauses are deemed unwritten - those of the Grand-Ducal Regulation are certainly mandatory, but do not have the same binding force.
The difference is size : failure to comply with one of the relevant provisions of the law constitutes a violation of a substantial formality. The sanction is absolute nullity: the judge must pronounce it and must even raise it automatically.

Non-compliance with a formality provided for by the Grand-Ducal Regulation, on the other hand, is punishable only by a relative nullity: it must be invoked by one of the parties - the judge can not raise it automatically - and non-compliance with the formality must have caused prejudice to the applicant by compromising his information or his protection.
Finally, apart from the actions for annulment, which consist in asking the judge to annul a decision retroactively without substituting another, there are in certain cases limited by law remedies in which a co-owner can ask the court to impose a different decision. to the syndicate of co-owners.

3. Cases of violation of a substantial formality

The following irregularities concerning a general meeting that constitute a violation of a substantial form of public policy are penalized by absolute nullity:

- the absence of notice;
- the non-convening of a co-owner;
- the calculation of votes in a manner other than the co-ownership rates ("thousandths"), except for the two exceptions provided by law, namely:
. when maintenance expenses are charged to certain co-owners only by the co-ownership by-law, only these then take part in the vote with a proportional number of votes for their participation in the said expenses (and not according to their quotas) )
. when a co-owner has a share of the common portions greater than half, the number of votes he has is reduced to the sum of the votes of the other co-owners;
- failure to comply with the majority requirements laid down for the various decisions.

It should be noted that attendance and votes are presumed to be as indicated in the minutes; it will be up to the person who challenges them to bring proof to the contrary.

4. Defects resulting in a relative nullity

The sanction of the non-observance of the formalities concerning the convening or the holding of a general assembly as well as the taking of a decision for which the general assembly does not have competence is the relative nullity.
With regard to the convening, these include the following irregularities:

- convening of the general meeting by an unauthorized person;
- absence of a mandatory indication of the convening notice (place, date and time of the meeting, agenda);
- Absence or late transmission of certain documents that must be communicated to the co-owners before the General Assembly if the items relating to them are on the agenda (eg the revenue and expenditure account for the financial year submitted to vote, the estimated budget, the proposed modifications to the draft co-ownership regulation, the descriptive statement of division or the state of allocation of charges, the essential conditions of a proposed contract including the contract to be concluded with the trustee, the draft resolutions that the assembly is called upon to adopt, etc.);
- decision taken on a point not included in the agenda attached to the invitation;
- failure to comply with the notice period;
- form of the convocation (no particular form is required by law except that the convocation must be made in writing and can not be oral, but the co-ownership regulations may provide for a particular form of notice).

With regard to the holding of the general meeting, irregularities may include:

- the meeting in a commune other than that of the situation of the immovable (unless the co-ownership by-law provides for another place);
- participation in the vote of a person who is not entitled to take part in it;
- the absence of signature of the minutes by the president and the secretary of the assembly as well as the members of the bureau if there is one;
the absence in the minutes of the text of a deliberation, the result of a vote (with the names of the opponents, non-voters and those who did not take part in the vote) or any reservations formulated by a co-owner;
- the absence in the annex of the minutes of a document referred to in a decision in order to be able to verify at a later date the extent of the decision taken.

Finally, when the general meeting exceeds its powers by taking a decision that is not part of its mission - the union's sole purpose is to administer and maintain the condominium building and nothing else - or commits an abuse of majority by using its rights and powers for a purpose other than the collective interest of the co-ownership, its decision also incurs relative nullity. This is also the case in case of fraud. As an example of exceeding powers, one can cite the acquisition of a lot by the co-ownership in order to give it for rent, whereas the fact of refusing to a co-owner an authorization for an application, however in accordance with the co-ownership by-law may constitute a abuse of majority. ²

5. Appeal by the judge to review the decision

There are two cases where the judge, instead of annulling a decision, may impose another decision on the syndicate of co-owners.
First of all, it is the hypothesis specifically provided for by the law in which the General Assembly refuses to authorize one or more co-owners to carry out improvement work at their own expense in the common areas - provided that they comply at the destination of the building - such as the addition of common items of equipment or layout respectively the creation of common premises. The co-owner (s) in question may then apply to the district court for permission to perform the work in accordance with the conditions that the court will set.

Moreover, in case of modification by the general meeting of bases of distribution of the charges - in case this faculty is recognized to him by the law - a co-owner who does not agree can seize the civil court. If the court finds that the dispute is well-founded, it may proceed with the new apportionment itself. The same is true of the distribution voted in proportion to the benefits that result for each of the co-owners of improvements decided by the general assembly for the common parts.

6. Who can bring an action?

Any co-owner - but only a co-owner (or a person duly authorized by him for this purpose) may appeal against a decision of the general meeting of the syndicate of co-owners.
However, the co-owner in question must have ruled against the contested proposal during the vote at the general meeting, or not attended.
A co-owner who has voted in favor of a proposal can not subsequently appeal against the same decision. It is the same for a co-owner present, but who did not participate in the vote.

7. How long does it take to appeal?

In case of appeal against a non-conforming decision of the general meeting, the co-owner has a period of 2 months since the notification of the decision, and only this decision is canceled if necessary.
The period does not begin to run as long as the decision has not been notified to the co-owner in question. The same applies if the notification has taken place but can not be proved, eg if it was made by simple letter and the addressee contests having received it. The notification must also be made to the co-owner in person; it can not be made to the representative authorized to represent the co-owner at the general meeting unless he has been expressly authorized to also receive the notification of the decision on behalf of the co-owner.
After this period of two months, no appeal is possible, even against a decision taken on a point not included in the agenda.

Note in this context that the notification of the decisions does not need to be made to all the co-owners but only to the co-owners who are opposed or absent during the vote since the other co-owners - those who were present at the general meeting - are supposed to have knowledge of the decisions since they voted them. It is true that in practice the trustees communicate the decisions to all the co-owners, most of the time even the complete minutes whereas the only notification of the decisions would in principle be sufficient.
On the other hand, in case of irregularities regarding the substantial formalities of the general meeting, the whole general meeting is vitiated and canceled, and the deadline for appeal is then no longer that of 2 months, but the period of 10 years since it is no longer a simple challenge to a decision of the general assembly. Such would be p. ex. the case where the result of the votes would not be mentioned in the minutes.

8. Before which jurisdiction is the appeal brought?

The competent court to hear appeals against the decisions of the general assemblies is the district court of the place of the situation of the building. The appeal is made by way of summons. An appeal against the decision of first instance is possible.

9. The effects of the appeal

The request for annulment has no suspensive effect. The contested decision therefore remains valid until it is annulled by the judges.
If the judges agree with the plaintiff, they can only annul the decision; they have no jurisdiction to substitute another decision, except the specific exceptions above where the judge may reform a decision of the general meeting to impose another.
A canceled decision may, however, always be placed on the agenda of another general meeting. If this general meeting and the vote are held on a regular basis, the decision will be adopted, even if it was previously annulled by the judges. The latter judge the form and not the fund.

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¹ Lex Thielen is a lawyer at the Court and author of the books "The professions of real estate in Luxembourg law, Editions Larcier, 2010," The lease, Editions Promoculture / Larcier 2013, "All about real estate, Editions Promoculture / Larcier (1st edition 2015, 2nd edition november 2016) and "Immobilienrecht in Luxemburg, einfach erklärt Editions Promoculture / Larcier 2016.
² Marc Elter and Fernand Schockweiler, Co-ownership of the buildings and sales of buildings to be built in the Grand Duchy of Luxembourg, Nos. 540 and 541.