Allocation of service charges in co-ownership: any co-owner may challenge an unfair clause at any time

Imagine a Parisian building where the ground-floor restaurant uses the lift every day for its deliveries, without ever paying a penny towards its maintenance. The residents on the upper floors, however, see their charges soar without understanding why. This injustice is exactly what a co-owner in the capital experienced, determined to assert his rights before the courts.

Co-ownership charges are often a source of discord. How are they allocated? What can be done if a clause in the regulation seems unbalanced? Can one really act alone, without the agreement of the other co-owners? These thorny questions are answered by the ruling handed down by the third civil chamber of the Cour de cassation on 28 January 2016.

This decision, both simple and powerful, reiterates a fundamental principle: any co-owner has an imprescriptible right to challenge an allocation of charges that does not comply with the 1965 Law. And this, even if the general meeting opposes it. A breath of fresh air for small owners, but also a warning for associations that are too routine.

The facts: a story like those that happen every day

It all starts in a building in the Paris region (the jurisdiction of the court of appeal points us towards Paris and its outskirts). A co-owner notices a clear imbalance in the allocation of lift charges. It turns out that the co-ownership regulation (the founding document setting out the rights and obligations of each) exempted certain commercial lots, even though they directly benefit from the equipment. A situation all the more glaring since the law has required, since 1965, an allocation key based on the objective usefulness that each lot derives from the collective services.

Based on this observation, this co-owner decides to put a resolution on the agenda of the general meeting of 6 May 2009. His proposal? To amend the disputed clause to re-establish a proportional contribution. But the co-owners' association (the body of all owners) rejects the proposal. The amicable route is abruptly closed.

The co-owner does not stop there. He seises the judicial court to have the non-conformity of the clause with article 10, paragraph 2, of the Law of 10 July 1965 recognised, and to obtain a new allocation. The trial judges, on appeal, rule against him. Their reasoning? According to them, such an action cannot be brought without a prior decision of the general meeting authorising the syndic to take legal action. A real legal obstacle, which could have discouraged many litigants. But our co-owner decides to bring the matter before the Cour de cassation.

The court's reasoning – dissected

The Cour de cassation, in a clear and unambiguous ruling, quashes the decision of the appeal judges. It solemnly reiterates the applicable text: article 10, paragraph 2, of the Law of 10 July 1965. This provides that charges arising from collective services and common facilities are allocated according to the usefulness that these services and facilities present for each lot. The case law has deduced from this a rule of public policy: a clause in the co-ownership regulation that deviates from it without objective justification is deemed unwritten.

The heart of the dispute concerned the admissibility of the individual action of the co-owner. The court of appeal had considered that only the association, represented by its syndic (the agent responsible for executing decisions), could take legal action after having been authorised by a majority vote of the co-owners. This position, if it had been upheld, would have given a real right of veto to the majority, sometimes entrenched in vested interests.

The Cour de cassation sweeps aside this approach. It states that any co-owner may, at any time, have the non-conformity with the provisions of article 10, paragraph 2, of the clause on the allocation of charges established, whether it arises from the co-ownership regulation, a subsequent amending deed or a decision of the general meeting, and have a new allocation drawn up in conformity with these provisions. In other words, the right to have an illegal clause sanctioned is not subject to the authorisation of the meeting. It is a personal right, attached to the status of co-owner, which the latter may exercise directly before the judge.

This ruling is part of a consistent line of case law, but it reinforces its scope. Already, by a judgment of 18 May 2011 (Cass. 3e civ., No. 10-17.998), the High Court had ruled that the action for nullity of a clause contrary to article 10 was not subject to the ten-year limitation period of article 42 of the Law. Here, it adds another stone by eliminating any procedural condition linked to a prior vote. A development which makes the action more accessible and faster.

What this changes for you – in concrete terms

This decision is a real shield for co-owners who are subjected to an unfair allocation of charges. It offers them a double advantage: total freedom of action, without having to convince a sometimes reluctant majority, and legal certainty as to the validity of their claim.

Let us take a numerical example, as I often encounter in Haussmannian buildings in Paris. A commercial premises of 100 square metres, located on the ground floor, uses the lift daily for the transport of goods. The co-ownership regulation, however drafted in 1973, assigns it a 5% share of lift charges, while a 50 square metre flat on the 5th floor is assigned 25%. The usefulness of the service is obviously inversely proportional. Thanks to the 2016 ruling, the owner of the flat can seise the judicial court to have this allocation revised, without even having placed the issue on the agenda of the next general meeting. And if he succeeds, the new allocation will apply retroactively from the date of the claim, or even from the date of the act challenged if it was manifestly unlawful.

If you are purchasing a lot, this decision should encourage you to be vigilant. Before signing the final deed, carefully examine the co-ownership regulation and the minutes of the last three general meetings. A suspect clause can be a hidden source of additional costs. It can also be a lever for negotiating the price. For syndics, the ruling sounds like a warning shot: it is imperative to check the conformity of charge allocations with the law, under penalty of incurring professional liability. Finally, for landlords, a fairer allocation can allow a reduction in recoverable rental charges, making the property more attractive.

The time limit for acting is, in practice, very wide. Unlike a decision of a general meeting which must be challenged within two months (article 42 of the Law), the non-conforming clause is imprescriptible: it can be challenged at any time. A clarification that changes everything, because many co-owners are unaware that their regulation has contained an illegality for decades.

Four tips to avoid this type of dispute

Anticipate rather than endure. Here are four concrete actions to avoid finding yourself in a legal quagmire:

• Audit your co-ownership regulation. Take the time to compare the share percentages indicated in the allocation table with the actual usefulness of each lot for each service (lift, heating, caretaker, etc.). A flagrant distortion should alert you. In Paris, old regulations are often riddled with outdated clauses.
• Commission a thermal or technical study. For heating or collective hot water charges, a precise diagnosis can demonstrate an unfair allocation. This report will have probative value before the judge.
• Place a resolution on the agenda. Even if you do not need a majority to take legal action, submitting the problem to a vote can unlock the situation at a lower cost. Use article 25-1 to request a modification of the allocation if the injustice is proven.
• Do not wait for a crisis. Once a conflict is established, relations deteriorate. Act at the first signs, with the assistance of a specialist solicitor, to assess your chances of success and estimate the cost of proceedings (often less than one might imagine).

Further reading: related case law and developments

The ruling of 28 January 2016 does not come out of nowhere. It is part of a jurisprudential trend favourable to the individual rights of co-owners. As early as 1998 (Cass. 3e civ., 11 February 1998, No. 96-15.469), the Cour de cassation had ruled that the action for the removal of an illegal clause is not limited by the two-month period of article 42. Since then, the trend has only been confirmed. A more recent ruling, of 17 March 2016 (Cass. 3e civ., No. 15-11.297), even extended the possibility of requesting the revision of the allocation for the future, in case of changes in the use of the lots.

What these decisions reveal is the will of the judges to give precedence to the substantive rule (the charge must be proportionate) over procedural barriers. For the future, one might think that the legislator, or a future reform, could further simplify the steps by imposing a periodic review of the allocations by the syndic, along the lines of what already exists for descriptive statements of division. In the meantime, the vigilance of co-owners remains their best weapon.

What to remember

Still have questions? Here are the five most frequently asked questions on the subject:

This 2016 decision illustrates a reality that is too often overlooked: co-ownership law is not a prison of the majority. Each co-owner has personal, inalienable rights, which the courts vigorously protect. In Paris, where property pressure makes every euro of charges precious, this ruling offers a breath of fresh air to some small owners. Above all, it reminds us that the 1965 Law, despite its age, remains an effective bulwark against abuses.

Do you find yourself in a similar situation? An initial 30-minute consultation with Maître Zakine (€45) can save you months of proceedings – and often much more. Make an appointment →