Reference: Court of Cassation, 3rd Civil Chamber, 8 February 2023, appeal no. 22-11.298, published in the Bulletin.
Introduction
Acquiring real property in France as a foreign national, whether a national of the European Union or a third-country national, entails exposure to specific rules governing co-ownership. The foreign co-owner, often a non-resident, must contend with a potentially restricted right to vote, service charges calculated according to objective criteria, and a set of by-laws which are binding upon them. The judgment delivered by the third civil chamber of the Court of Cassation on 8 February 2023 (no. 22-11.298) provides essential clarification regarding the rights of foreign co-owners, particularly in respect of their participation in collective decisions.
I. The voting rights of the foreign co-owner
A. Principle of equality and contractual restriction
Pursuant to Article 22 of the Law of 10 July 1965, every co-owner holds a number of votes proportional to their share in the common parts. This principle of equality applies without distinction as to nationality or residence. However, the by-laws may provide for restrictions, such as the requirement of an address in France in order to exercise the right to vote. The validity of such clauses has been contested.
B. The judgment of 8 February 2023: a long-awaited clarification
In this case, a co-owner of foreign nationality, residing outside France, was denied the right to vote at a general meeting by reason of a clause in the by-laws requiring a postal address in France. The Court of Cassation overturned this clause, holding that it constituted a disproportionate restriction on the right to property and on free participation in collective decisions. It recalled that Article 8 of the European Convention on Human Rights protects the right to respect for property, and that any limitation must be justified by a legitimate interest and be proportionate. In the instant case, the clause was not justified by any compelling reason, given that the syndic could communicate by electronic means or through an agent.
Practical scope: Since this judgment, clauses restricting the voting rights of non-resident co-owners are presumed to be abusive. The foreign co-owner may vote by correspondence, by proxy, or through a legal representative. It is advisable to review the by-laws and, where applicable, to seek a declaration of nullity of such clauses before the judicial court.
II. Service charges: an objective regime
A. Allocation according to shares
In accordance with Articles 10 and 10-1 of the Law of 1965, service charges are apportioned among co-owners in proportion to their share (tantièmes) in the common parts. This apportionment is independent of the owner's nationality or residence. Thus, a foreign co-owner contributes to general charges (maintenance, heating, etc.) and to special charges (lift, green spaces) in the same proportions as French co-owners.
B. Recovery of charges from the non-resident
The syndic may encounter difficulties in recovering charges from a co-owner domiciled abroad. Article 19-2 of the Law of 1965 allows the syndic to suspend the exercise of the co-owner's voting rights where the latter has not paid their charges for more than two quarters. This sanction applies without regard to nationality. Furthermore, the syndic may initiate foreclosure proceedings against the property located in France, irrespective of the owner's place of residence.
Taxation: Service charges are deductible from rental income for the foreign co-owner who lets their property (CGI, art. 31). It is advisable to retain supporting documents and to engage an accountant specialising in international taxation.
III. The by-laws: enforceability and adaptation
A. Enforceability against the foreign co-owner
The by-laws are binding on all co-owners, including foreign nationals, once they have acquired a unit. They must be drafted in French (Law no. 94-665 of 4 August 1994 on the use of the French language). However, a translation may be requested by the non-French-speaking co-owner. The 2023 judgment did not alter this principle: the by-laws are enforceable, but their abusive clauses (such as the voting restriction) may be challenged.
B. Negotiation and amendment of the by-laws
A foreign co-owner may propose amendments to the by-laws at the general meeting, subject to compliance with the required majorities (art. 26 d
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