Reference decision: cc • No. 17-27.526 • 2018-11-29 • View the decision →
Imagine you are the owner of an apartment in a service residence in Mimizan, facing the ocean. You rent your property to holidaymakers who enjoy the on-site restaurant and cleaning service. But here's the problem: the charges related to these services are not paid by some co-owners. Who should recover them? The co-owners' association or the external service provider? This question arises in many residences in the South-West, where tourism and services are essential.
undefined in Mont-de-Marsan, I have encountered cases where this confusion generated conflicts between co-owners, payment delays, and even costly legal proceedings. Owners often ask: "Should I pay these charges to the association or directly to the service provider?" or "What should I do if my neighbour does not pay their share?"
The decision of the Court of Cassation of 29 November 2018 provides a clear answer. It specifically concerns service residences subject to the co-ownership regime, and it significantly simplifies the management of charges related to catering and hotel service agreements. But what exactly does this change for you, as an owner, tenant, or real estate professional?
The facts: a story that happens every day
The story begins in a service residence, probably similar to those found in Dax or in the seaside resorts of the Landes. Mr Dupont, owner of two units in this co-ownership, had not paid his charges for several years. As of 21 June 2012, the arrears amounted to €40,237.65. A substantial sum, which reflects the financial stakes of this type of dispute.
These charges included two distinct categories: on the one hand, the classic co-ownership charges (maintenance of common areas, electricity for halls, etc.); on the other hand, charges related to individualised services, such as catering agreements and hotel service agreements provided for in the co-ownership regulations. The latter correspond to the specific services offered in the residence: meals at the restaurant, room cleaning, reception, etc. – services that make service residences successful but raise management questions.
The co-owners' association, represented by its managing agent, initiated legal action to recover all these charges. It considered that, since these services were provided for in the co-ownership regulations, their recovery fell within its competence, even if they were not co-ownership charges in the strict sense. Mr Dupont, for his part, contested this approach. He argued that these charges related to individualised services were not part of the co-ownership charges and that their direct recovery by the association required an amendment to the co-ownership regulations.
The judicial trajectory had its twists and turns. At first instance, the judges ruled in favour of the association. But Mr Dupont appealed, and the court of appeal overturned this first judgment. It considered that, since these charges did not constitute co-ownership charges, the association could not recover them directly without having amended the co-ownership regulations. The association then appealed to the Court of Cassation, leading to the decision of 29 November 2018. A typical judicial saga, where each stage reveals different interpretations of the law.
The court's reasoning – analysed
The Court of Cassation, in its judgment, quashed the decision of the court of appeal. Its reasoning is based on a fundamental distinction between co-ownership charges and other charges. Co-ownership charges, defined by the law of 10 July 1965 (article 10), are those concerning the conservation, maintenance, and administration of common areas, as well as collective services. In short, these are expenses related to the building and shared facilities.
However, charges relating to catering agreements and hotel service agreements – as in our example in Mimizan – do not fall within this definition. They correspond to individualised services, used by some co-owners or tenants but not by all. For example, if you never take your meals at the residence's restaurant, you should not pay this charge. Therefore, they are not co-ownership charges in the legal sense.
But be careful: the Court of Cassation considered that this does not mean that the co-owners' association cannot ensure their recovery. The legal basis here is article 1240 of the Civil Code (which obliges compensation for damage caused by one's fault), but applied to the contract constituted by the co-ownership regulations. If the regulations provide for these service agreements, then the association, as the management body of the co-ownership, can resume their recovery directly, without needing to amend the regulations.
In other words, the court considered that the resumption of recovery by the association is a simple measure of execution of the existing regulations, and not an amendment to them. This is an evolution in case law, because previously, some courts required a formal amendment of the regulations for such situations. The Court of Cassation thus simplifies practical management: there is no need to convene a general meeting to amend the regulations, the association can act directly.
The arguments of both parties were clear: the association pleaded for efficiency and simplicity of management, while Mr Dupont invoked legal certainty and strict compliance with formalities. The Court ruled in favour of efficiency, but recalling that these charges are not co-ownership charges – a crucial nuance for their allocation and potential challenge.
What this changes for you – concretely
If you are a landlord owner in a service residence, as in Dax where the rental market is dynamic, this decision directly concerns you. From now on, the co-owners' association of your co-ownership can resume recovery of service-related charges (catering, hotel services) without having to amend the regulations. Concretely, this means that you will pay these charges to the association, at the same time as your classic co-ownership charges. But be careful: these charges remain individualised. If you do not subscribe to these services, you should not pay them – check your statement carefully!
For a tenant, the change is less direct, but it impacts your daily life. If your landlord does not pay these charges, the association can now act more quickly to recover them, thus reducing the risks of service cuts or tensions in the residence. For example, if the restaurant in the residence in Mimizan threatens to close due to non-payments, the association can intervene without additional delay. This improves the stability of the services offered.
For a purchaser, this decision clarifies the rules of the game. When you buy a property in a service residence, you must carefully examine the co-ownership regulations and the annex agreements. But you now know that, even if these agreements provide for individualised charges, their management by the association is facilitated. This can be an argument for transparency and security for your investment. undefined, I have encountered cases where purchasers hesitated due to uncertainties on these points – this decision removes some of these uncertainties.
For an owner-occupier, the implications are similar to those for a landlord owner. You must ensure that the charges you pay correspond to the services you use. If you challenge a charge, remember that it is not a co-ownership charge, but a charge related to an agreement. Your recourse should therefore target this agreement, and not the general rules of co-ownership. In terms of deadlines and amounts, recovery procedures can be accelerated, but the sums involved remain significant – in the present case, more than €40,000 in arrears.
Four tips to avoid this type of dispute
- Read your co-ownership regulations and annex agreements carefully: before buying or renting, check which charges are provided for services (catering, hotel services), and how they are allocated. This avoids unpleasant surprises.
- Demand detailed statements from the association: request that co-ownership charges and service-related charges be clearly distinguished on your calls for funds. This makes it easier to challenge an incorrect charge.
- Participate in general meetings: even if amending the regulations is no longer necessary for recovery, your voice matters to discuss the management of services and agreements. This is an opportunity to ask questions and prevent conflicts.
- Consult a specialised lawyer if in doubt: if you receive a formal notice for disputed charges, or if you are considering legal action, a quick consultation can help you avoid costly mistakes. In the jurisdiction of Mont-de-Marsan, the courts are familiar with these issues, but legal expertise is valuable.
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In-depth analysis: related case law and developments
This decision is part of a trend in the courts to facilitate the practical management of co-ownerships, while respecting legal distinctions. Before 2018, some courts of appeal required an amendment to the co-ownership regulations to allow the association to directly recover this type of charge. For example, a judgment of the Paris Court of Appeal in 2015 had insisted on this formality, creating uncertainty for associations.
The Court of Cassation, with the judgment of 29 November 2018, operates a partial reversal. It aligns its case law with a more pragmatic vision: provided that the regulations provide for these agreements, their execution (including recovery) falls within the natural competence of the association. What few people know is that this approach also applies to other individualised charges, such as parking spaces or storage units, provided they are provided for in the regulations.
For the future, this means greater flexibility for associations, but also increased responsibility for co-owners to properly understand what they are paying. The courts will probably continue to carefully distinguish co-ownership charges and contractual charges, but favouring solutions that avoid procedural burdens. In the Landes, where service residences are multiplying, this evolution is particularly relevant.
What you must absolutely remember
To summarise, here is a checklist of what to do if you are affected by this decision:
- Identify the type of charges: clearly separate co-ownership charges (maintenance of common areas) from charges related to individualised services (catering, hotel services).
- Check the co-ownership regulations: ensure that service agreements are provided for – this is the legal basis for recovery by the association.
- Control your statements: demand that the association distinguishes these charges on your calls for funds, and quickly challenge any error.
- Act in case of dispute: if you do not pay, the association can now act directly without amending the regulations, but you can challenge in court if the charges are unjustified.
- Consult a professional: if in doubt, a consultation with a specialised lawyer can help you avoid lengthy and costly proceedings.
How to react? If you are an owner, be vigilant about your payments; if you are a managing agent, take advantage of this simplification to improve your management; if you are a tenant, ensure that your landlord meets their obligations.
Do you find yourself 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 →
