Reform of the law on co-ownership

On 7 June 2018 the Chamber of Representatives approved the proposition of law containing several provisions of civil law and amending the Code of procedure in order to stimulate alternative forms of dispute resolution.

As we already announced in a previous article, part of this law amended the provisions on the forced co-ownership of buildings or groups of buildings (also called the law on apartments).  

The policy objectives are the following: (i) the flexibilisation of the working of the association of co-owners and its bodies, (ii) optimising the efficiency within the association of co-owners (iii) re-balancing the co-ownership, and (iv) various clarifications for the co-owners.

In addition, the law intends to modernise the regular co-ownership and the forced co-ownership in light of technical progress.

The four policy objectives are described hereunder.

1. The working of the association of co-owners and its bodies will become more flexible

1.1  The qualified majorities within the general meeting of co-owners will be liberalized and rationalised.

Currently, a majority of 3/4 is required for amendments to the bylaws or decisions on works (save works that can be decided by the property agent). This will be reduced to 2/3.

For works that are imposed by law and works necessary to preserve the building a simple majority of the co-owners present or represented will be sufficient. Currently, a majority of 3/4 is required.

For the destruction and reconstruction of the building, a majority of 2/3 will be sufficient. Currently such a decision required unanimity.

A co-owner will be entitled to transfer his parcel to the other co-owners if the value of the destruction and reconstruction is lower than his part in the total costs of the works. He will be entitled to an indemnity, to be determined in common agreement, or by the judge.

When the law prescribes that a decision must be taken by unanimous consent, and such unanimous consent cannot be reached due to the absence of one or several co-owners, a new general meeting shall be convened within a period of at least 30 days. At this second meeting the decision can be approved by unanimous consent of the co-owners present or represented.

1.2  The competence of the real estate developer, or the signatories of the initial deeds, to make necessary amendments to the building plans will be recognised, but strictly regulated and limited.

1.3  A new body is introduced in case of a deadlock within the association of co-owners, the interim administrator, who will be capable to decide in lieu of the general meeting of co-owners.

2. The efficiency within associations of co-owners will be optimized

2.1  The law wished to reduce the content of the bylaws, to enhance its stability. Consequently, not every amendment of the law will necessitate an amendment of the bylaws, and this will avoid additional costs.

2.2  There will be a compulsory contribution to the reserve fund, which offers stability to the rights of the co-owners. Thus costs will be made gradual, which allows a diligent management of the building, and offers financial transparency in case of transfer of the parcel.

2.3  When collecting contributions of the common charges, the property agent can invoke the joint and several responsibility of the bare owner and the usufructuary and will be able to take all legal and extra-legal actions.

3. Re-balancing the co-ownership

3.1  A step has been taken in the direction of the principle "the payer decides", although within limits.

For example, when certain co-owners do no use the lift, they can block decisions regarding the lift. In the future, the co-owners who will pay the cost, will solely be able to decide. The number of votes will be dependent on the contribution in the costs.

3.2  The obligations and responsibilities of the residents of the building are intensified. The owner must inform its tenant of the decisions of the general meeting.

4. Clarifications for the co-owners

Case-law has been flexible as to the scope of the law in regard of un-build private parcels. This is now included in the law. Currently, the principles of forced co-ownership are applicable "to each building or group of buildings the ownership of which is divided between parcels that each contain a build private part and a share in the common parts". This will in the future be: "each immovable property on which a building is erected or can be erected the ownership of which is divided between parcels…".

This new legislation will enter into force the first day of the third month following the publication in the Belgian Official Gazette.