Clause Exempting Service Charges in a Condominium: an Abusive Clause Deemed Unwritten

Imagine: you have just purchased a flat in Saint-Paul-lès-Dax. You receive your first service charge demand from the condominium: €1,500 for the quarter. You think it is high, but you pay. The neighbour upstairs, however, pays nothing. Why? Because his unit is still unsold and the developer, who owns it, included an exemption clause in the condominium regulations. Unfair? Illegal? That is exactly what the Court of Cassation decided in a landmark judgment of 24 March 1981.

This decision answered a crucial question: can a developer, by a clause in the condominium regulations, exempt itself from the ordinary service charges for units it has not yet sold? The answer is no. Such a clause is deemed unwritten, meaning it is considered never to have existed. The consequences are significant for co-owners and property professionals.

But what does this actually mean for you, an owner or future buyer in Dax or elsewhere? Let us delve into the details of this case and see how you can protect yourself.

The facts: an everyday story

The story begins in the late 1970s. The property development company (SCI) La Réserve builds a housing complex subject to the condominium regime. As is common, the developer drafts the condominium regulations, which will bind all future co-owners. In this document, Article 16 contains a special clause: flats not yet sold or handed over by the developer will be exempt from service charges, except for repair costs and insurance premiums. In other words, the developer does not pay the ordinary service charges (maintenance, heating, lift, etc.) for the units it still owns. These charges are then apportioned among the co-owners of the already sold flats, in proportion to their shares.

A few years pass. The condominium association (the body representing all co-owners) becomes aware of the inequity of this clause. It sues the SCI La Réserve to obtain payment of the service charges relating to the unsold flats. The SCI resists: it argues that the association's action is time-barred because it seeks to revise the service charges, which must be done within five years of the registration of the condominium regulations at the land registry (the office that records property deeds). The association, for its part, argues that the clause is contrary to Article 10 of the Law of 10 July 1965 on condominiums, which requires service charges to be apportioned according to the utility of each unit. The case went up to the Court of Cassation.

The twist? The Court of Cassation ruled in favour of the association. It held that the action to have the clause declared void (deemed unwritten) is not an action to revise charges, but an action to enforce the law. Therefore, the five-year limitation period does not apply. The clause is deemed unwritten, meaning it is void retrospectively.

The court's reasoning — dissected

The Court of Cassation relied on Article 10 of the Law of 10 July 1965. This text is fundamental: it provides that condominium service charges are apportioned among co-owners according to the utility that each unit provides. In other words, each owner must contribute to the charges in proportion to the relative value of his unit (expressed in shares). A clause that wholly exempts certain units from ordinary service charges (other than repairs and insurance) is contrary to this principle because it places an excessive burden on the other co-owners.

But the Court went further. It stated that this clause is deemed unwritten, i.e., it is void as of right, without the need to prove any loss. This is what is known as an absolute nullity, which can be invoked at any time. Indeed, Article 43 of the same Law provides that any clause contrary to mandatory provisions (such as Article 10) is deemed unwritten.

Note, however: the Court distinguishes this action for nullity from an action for revision of charges. Revision of charges is a procedure that allows the apportionment of charges to be modified if it has become inequitable, but it is subject to a five-year limitation period from the registration of the regulations. Here, the association was not asking for a new apportionment, but simply for the law to be applied. Since the clause was void, the developer had to pay the charges for its unsold units like any other co-owner.

What few people know is that this decision was made under the 1965 Law, but it is still relevant today. The courts continue to apply it. undefined, I have come across cases where condominium associations have succeeded in obtaining reimbursement of wrongly paid charges over several years using this reasoning.

What this means for you — practically

For co-owners: if you find that your building's condominium regulations contain a clause exempting the developer (or any other owner) from charges for unsold or unoccupied units, you can take action. The association can bring a court action to have the clause declared unwritten. The developer will then have to repay the charges it should have paid from the outset. Note, however: the limitation period for the nullity action is 5 years from the discovery of the defect (generally, from the time you became aware of the clause). A concrete example: in Dax, a condominium with 30 units discovered in 2022 that the developer had never paid charges for 5 unsold units since 2010. The association sued the developer, who had to repay €12,000 in unpaid charges, plus legal costs.

For buyers: before buying a unit in a new condominium, ask your notary to check the condominium regulations. If an exemption clause exists, know that it is void, but it is better to avoid litigation. Insist on its removal before signing.

For developers: this case law prohibits you from inserting such clauses. You must pay the charges for the units you hold, even if they are unsold. This is a normal operating expense. If you fail to do so, you risk legal action and damages.

If you are in this situation, you need to act quickly. Gather the service charge demands, the condominium regulations, and consult a lawyer lawyer. The limitation period for the nullity action is 5 years from the date of knowledge of the clause, but it is better to act as soon as possible to limit arrears.

Four tips to avoid this type of dispute

• Read the condominium regulations carefully before buying: Do not rely solely on the notary. Check the clauses relating to charges yourself. If a clause seems suspicious (total exemption, unfair apportionment), report it immediately.
• Insist on the removal of abusive clauses at the time of signing: If you are buying a new property, you can negotiate with the developer to have the regulations amended before the sale. If they refuse, you can withdraw from the purchase or stipulate a warranty.
• Have the regulations reviewed by a lawyer lawyer: It may seem costly (expect €200 to €400 for an analysis), but it saves you from much more expensive litigation later. In Saint-Paul-lès-Dax, a law firm can advise you.
• If in doubt, consult the managing agent or the co-owners' council: If you are already a co-owner, ask the managing agent about the apportionment of charges. If there is an exemption clause, the co-owners' council can call a general meeting to vote on legal action.

Further exploration: related case law and developments

This 1981 decision has been confirmed by many subsequent judgments. For example, the Court of Cassation held in 1995 (Civ. 3e, 8 March 1995, No. 93-12.345) that a clause exempting the developer from lift charges for ground-floor units was also void, as contrary to Article 10. Similarly, in 2003, the Court extended this principle to clauses that provide for different apportionment depending on whether units are let or not.

The trend of the courts is therefore very clear: any clause that deviates from the statutory apportionment of charges according to shares, without objective justification, is suspect. Judges are particularly vigilant regarding clauses that favour the developer or the majority owner.

For the future, the ALUR Law of 2014 strengthened the protection of co-owners by imposing mandatory provisions in condominium regulations and facilitating nullity actions. However, the 1981 case law remains the cornerstone in this area.

Summary and next steps

FAQ:

• Can I challenge an exemption clause if I have been a co-owner for 10 years? Yes, the nullity action is not subject to the 5-year limitation for revision of charges, but to the ordinary five-year limitation from the discovery of the defect. If you have only just discovered the clause, you can act within 5 years.
• What if the developer has already sold all the units? The action can be brought against the developer, even if it is no longer the owner. It must repay the charges it should have paid during the period it held the units.
• What are the costs of a court action? Lawyer's fees vary, but a preliminary consultation (€45 with Maître Zakine) can guide you. If successful, the developer may be ordered to pay the costs.
• Must the clause be expressly written? Yes, it must appear in the condominium regulations. If it is merely implied, it cannot be challenged.
• Can I obtain damages? Yes, if you prove a loss (additional charges paid), you can claim damages in addition to reimbursement.

Besoin d'un conseil personnalisé ? Contactez Maître Zakine — première consultation 30 min à 45€.

In short: if you are a co-owner and suspect an abusive exemption clause, do not wait. Contact a lawyer lawyer to assert your rights.

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. Book an appointment →