Reference decision: cc • No. 08-14.889 • 2009-06-04 • View the decision →
You are a co-owner in Le Cannet, in a development with a shopping arcade. Each year, the general meeting votes on the budget, and you discover that the insurance premiums for the arcade are apportioned among all co-owners, including those who do not have a shop there. “Why should I pay for the insurance of the shops?” you legitimately ask yourself. This is exactly the question the French Supreme Court had to decide in a landmark case. And the answer may surprise you: these premiums are general charges, even if the by-laws provide for special charges for the arcade. Here is an explanation.
This decision of 4 June 2009 (No. 08-14.889) clarifies the boundary between general and special charges in mixed condominiums. It is of interest to all co-owners, whether they are occupants or landlords, as well as to managing agents and property managers. Because behind the legal technicalities, it is your wallet that is at stake.
But what exactly does this change? To understand, let us delve into the facts.
The facts: a story that happens every day
The case began in Cannes, in a development named Victoria Surf. This condominium comprises apartments and a shopping arcade. The condominium by-laws, drafted in the 1970s, provide for a specific allocation of special charges for the arcade, but also state that general charges include “those which are not considered special, in particular the premiums listed in the chapter on insurance.” So far, everything seems clear.
But in 2002, at the general meeting, resolution No. ... (the text does not specify it) decided to apportion the insurance premiums for the shopping arcade among all co-owners, in proportion to their general shares. Several co-owners, owners of apartments without shops, challenged this decision. They argued that these premiums should be borne only by the co-owners of the arcade, as special charges.
The dispute came before the Tribunal de Grande Instance of Grasse, which ruled in favour of the challenging co-owners. However, the Victoria Surf development appealed. The Court of Appeal of Aix-en-Provence, in a judgment of 3 March 2008, reversed the decision: it held that the insurance premiums were general charges because they were taken out in the interest of all co-owners. The insurance covered the common risks of the entire building, including the arcade, which formed an integral part of the condominium.
The dissatisfied co-owners appealed to the Supreme Court. They argued that the by-laws clearly distinguished between general and special charges, and that the insurance premiums for the arcade should follow the special regime. But the Supreme Court dismissed their appeal on 4 June 2009, upholding the Court of Appeal's decision.
The reasoning of the court — dissected
The Supreme Court relied on Article 10 of the Law of 10 July 1965 (which governs condominiums) and on the condominium by-laws. Article 10 provides that general charges are those relating to the preservation, maintenance and administration of the common parts, while special charges are those necessary for collective services and common facilities according to their objective utility.
In other words, a charge is general if it benefits all co-owners, and special if it benefits only some (for example, a lift that serves only a few floors). Here, the by-laws of Victoria Surf stated that general charges include those not considered special, and in particular the insurance premiums listed in the insurance chapter. The judges noted that the insurance for the shopping arcade was taken out in the interest of all co-owners: it covered the risks of the entire building, not just the shops. Indeed, a shopping arcade forms part of the common or private parts of the building, and its insurance protects all co-owners against losses that could affect the structure or safety.
The Court concluded that, even if the by-laws provided for a special allocation for certain charges of the arcade, the insurance premiums could not benefit from it because they were general by nature. It thus adopted the reasoning of the Court of Appeal: “there is an allocation of special charges to a shopping arcade, but it cannot apply to insurance premiums which are taken out in the interest of all co-owners.” In short, the classification as a general charge prevails over the letter of the by-laws.
What few people know is that this decision is part of a consistent line of authority. Since 1996, the Supreme Court has considered that insurance charges are generally general charges because they cover a common risk. But beware: if the by-laws explicitly provide that the insurance of certain parts are special charges, it is necessary to check whether this complies with the law. In this case, the by-laws were ambiguous, and the judges ruled in favour of the interpretation most favourable to the collective interest.
undefined, I have come across cases where co-owners contested the allocation of insurance premiums for a swimming pool or a car park. The solution is always the same: it is necessary to examine whether the insurance benefits everyone or only some. If it covers a common risk, it is a general charge.
What this means for you — concretely
For co-owners of apartments without shops: you may be required to pay the insurance premiums for the shopping arcade if it forms part of the condominium and the insurance is taken out in the common interest. This is not an injustice, but an application of the principle of solidarity: the insurance protects the building as a whole, and therefore your property as well.
For owners of shops in the arcade: you cannot demand that only the shopkeepers pay the insurance, unless the by-laws clearly provide for it and the insurance covers only your specific risks. But in practice, insurers often require a single policy for the entire building.
For purchasers of a unit in a condominium with a shopping arcade: check the by-laws before buying. If the general charges include the insurance for the arcade, factor this cost into your budget. For example, in Cannes, an insurance premium for an arcade can range from €500 to €2,000 per year for a 50 m² unit, depending on the size and risks.
If you are in this situation, you should:
- Consult the by-laws to see how the insurance premiums are classified.
- Check the minutes of general meetings to know the allocation applied.
- If in doubt, ask the managing agent to justify the classification.
- Challenge the decision within two months of the general meeting if you believe it is contrary to the by-laws.
The time limits are strict: an action for nullity must be brought within two months of notification of the minutes. After this period, the decision becomes final, unless there is a procedural defect.
Four tips to avoid this type of dispute
- Read your by-laws carefully: before buying or challenging, check how the charges are classified. If the text is ambiguous, seek advice from a solicitor specialising in property law.
- Attend general meetings: do not let decisions be made without you. If a resolution on charges seems questionable, ask questions and request explanations from the managing agent.
- Keep all supporting documents: insurance policies, demands for funds, minutes. In the event of a dispute, these documents are essential to prove the common or special interest of the insurance.
- Do not hesitate to consult a solicitor before acting: a simple formal notice to the managing agent may sometimes suffice to correct an error in allocation. But if the conflict persists, legal proceedings are possible, with solicitor and expert costs that can be high.
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Further reading: related case law and developments
This 2009 decision confirms a trend already initiated by the Supreme Court in the 1990s. For example, in a judgment of 6 December 2006 (No. 04-20.828), the Court held that fire insurance premiums taken out by the condominium association constitute general charges, even if the by-laws provide for special charges for certain parts. More recently, in a judgment of 14 February 2019 (No. 18-10.408), the Court reiterated that the classification of a charge as general or special depends on the objective utility of the expenditure, not the will of the co-owners.
On the other hand, if the by-laws explicitly provide that the insurance for the arcade is a special charge, and this clause is not contrary to public policy, the courts may apply it. But in practice, it is rare for insurance to benefit exclusively a part of the condominium, as insurers often impose a single policy.
For the future, the trend is towards a broad interpretation of general charges, in order to avoid complex and conflict-prone allocations. Managing agents must therefore be vigilant in drafting budgets and demands for funds.
Key points to remember
- An insurance premium is generally a general charge if it covers a risk common to all co-owners.
- The by-laws may provide for special charges, but this clause does not apply if the insurance is taken out in the interest of all.
- If in doubt, consult the by-laws and the insurance policy to verify the extent of cover.
- To challenge, act within two months of the general meeting.
- A lawyer solicitor can help you assert your rights and avoid unnecessary costs.
Are you in a similar situation? A first 30-minute consultation with Maître Zakine (€45) can save you months of proceedings — and often much more. Make an appointment →
