Service charges in co-ownership: no one can be exempted from all contribution (Cass. 1972)

Imagine: you own a flat in Parentis-en-Born, in a quiet residence. One day, the managing agent demands a significant sum from you for common service charges. You reply: 'But I gave up the use of my room 16 in exchange for room 12, I owe nothing!' This scene, however incredible, actually happened before the courts. The question every co-owner asks: can one be exempted from all contribution to service charges? The answer, clear and unequivocal, was given by the Cour de cassation on 10 October 1972: no. And this solution is a matter of public policy, meaning that no agreement (co-ownership regulations or particular arrangement) can derogate from it. Analysis of this landmark decision for owners in the Landes.

The facts: a story that happens every day

Mr X was the owner of a unit in a co-owned building located in... (the decision does not specify the town, but let's imagine a residence in Dax). He owned, among others, a room number 16. Tired of paying service charges for this property, he proposed an exchange to the managing agent: give up room 16 in exchange for room 12, and in return, be exempted from all contribution to common service charges. The managing agent accepted, and Mr X thereafter considered that he had nothing more to pay. But the managing agent went back on his word and demanded payment of the service charges. Mr X refused, arguing the verbal agreement. The case ended up before the courts.

At first instance, the court ordered Mr X to pay the service charges. Dissatisfied, he appealed. The court of appeal upheld the order, considering that the claim to be exempted from all service charges was contrary to Article 10 of the Law of 10 July 1965. Mr X then appealed to the Cour de cassation, but the higher court dismissed his appeal, upholding the managing agent's position. The twist? The Cour de cassation not only confirmed the debt: it held that any clause or agreement that would exempt a co-owner from all contribution to service charges is void, because contrary to public policy.

The reasoning of the court — dissected

The legal basis for this decision is Article 10 of Law No. 65-557 of 10 July 1965 establishing the status of co-ownership of built buildings. This article provides that co-owners are obliged to contribute to the costs incurred by collective services and common equipment elements, as well as to costs relating to the conservation, maintenance and administration of common parts, in proportion to the relative values of the private parts comprised in their units. In short, each owner must pay his share of the service charges, calculated according to the value of his unit (expressed in thousandths).

The Cour de cassation held that a co-owner's claim to be totally exempted from service charges is contrary to these provisions of public policy. In other words, even if a co-owner abandons a unit or transfers its enjoyment, he remains liable for the service charges of his current unit. Public policy means that the parties cannot derogate from it by contract: any clause in the co-ownership regulations or any particular arrangement that would totally exonerate a co-owner would be void ab initio.

What few people know is that the Court here confirmed a prior line of authority, already very protective of the financial balance of co-ownerships. The judges considered that the general interest (the proper functioning of the co-ownership) prevails over individual arrangements. Mr X argued that the agreement with the managing agent was valid, but the Court responded that such an agreement cannot violate Article 10. undefined that the managing agent cannot, even in good faith, exempt a co-owner from his service charges, on pain of nullity of the agreement.

What this changes for you — concretely

For landlord owners in Dax: if you let a flat and your tenant uses part of the common parts (for example, a garage), you cannot transfer to him the cost of maintaining those parts. Your obligation towards the managing agent remains entire. Concrete example: you own a two-room flat of 50 m² in a residence in Dax, with 200 thousandths out of 10,000. The annual service charges are €2,000. You cannot, by an agreement with the managing agent, reduce your share to zero, even if you give up the use of your cellar. The law requires you to pay 200/10,000 of the service charges, i.e. €40 per year.

For owner-occupiers in Parentis-en-Born: if you wish to exchange your room with a neighbour, be careful: this does not change your obligation to pay service charges. You remain the owner of your original unit, even if you occupy another. If you sell your unit, the buyer will have to pay the service charges relating to it. A tip: before any exchange, have a notarial deed drawn up modifying the ownership of the units, otherwise the service charges remain in your name.

For buyers: when purchasing a unit, check the state of unpaid service charges. If the previous owner made an unlawful exemption agreement, you might be considered in good faith, but the managing agent will claim the arrears from you. undefined, I have come across cases where an owner sold his unit without having paid the service charges for years, thinking he was exempt. The buyer had to repay several thousand euros. Be vigilant.

Four tips to avoid this type of dispute

• Check your co-ownership regulations: make sure they contain no clause totally exempting a particular unit from service charges. If they do, that clause is void. Have it removed by a general meeting.
• Never negotiate a verbal agreement with the managing agent: any arrangement on service charges must be formalised in writing and approved by the general meeting of co-owners. A simple exchange of letters can be contested.
• In case of difficulty, consult a lawyer lawyer: before refusing to pay service charges, seek legal advice. An unjustified refusal can lead to penalties and recovery costs.
• Update the allocation of thousandths: if you modify your unit (division, merger), have the thousandths revised by a surveyor and submit the new allocation to the general meeting. This will avoid disputes over the amount of service charges.

Further reading: related case law and developments

This 1972 decision is part of a consistent line of authority from the Cour de cassation. For example, in a judgment of 9 March 1994 (No. 92-14.747), the Court held that a clause in a co-ownership regulation that totally exempted the owner of a unit from lift service charges was void, as contrary to Article 10. Similarly, a judgment of 12 July 2000 (No. 98-19.853) recalled that service charges are due even if the unit is unoccupied or unusable. The tendency of the courts is therefore very protective of the collective interest. For the future, the ALUR law of 2014 strengthened co-owners' obligations regarding transparency of service charges, but the principle of public policy in Article 10 remains unchanged. However, note: the Cour de cassation allows partial exemptions, for example for a unit that does not benefit from a service (such as a lift for a ground floor unit), but never a total exemption.

Frequently asked questions

• Can I be totally exempted from service charges if I do not use the common parts? No, the law does not allow this. You must contribute to the costs of conservation and administration, even if you do not use the hall or the lift.
• What should I do if my co-ownership regulations contain a clause of total exemption? This clause is void. You can ask the managing agent to have it removed at the next general meeting. If he refuses, apply to the judicial court.
• If I abandon my unit to the co-ownership, am I freed from service charges? No, as long as you remain the owner, you are liable. The abandonment must be made by notarial deed and accepted by the co-owners' association, but this does not wipe out past service charges.
• Can a verbal agreement with the managing agent exempt me from service charges? No, such an agreement would be void for violation of public policy. Moreover, the managing agent has no power to modify the allocation of service charges without a decision of the general meeting.
• What are the time limits for challenging a service charge demand? You have a period of 5 years from the due date of each service charge. After this period, the managing agent's action for payment is time-barred, but it is better to act quickly.

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