Co-ownership or Not: Proof of Common Organisation Required by the Court of Cassation

Do you live in a residence with a shared garden, a common driveway, or a car park that you use with your neighbours? You may even pay a subscription to an association for the maintenance of these spaces. But beware: without a real and functional organisation, your property development could be considered a co-ownership, with all that implies in terms of rules and charges. This is what the Court of Cassation reminded in a judgment of 19 September 2012, a landmark decision for owners in Boulogne-Billancourt as well as for those in Créteil.

Who has never dreamed of escaping the constraints of co-ownership? Between endless general meetings, unexpected charges, and neighbourhood conflicts, the idea of an alternative organisation is appealing. But is it that simple? The answer is no, as this case shows. A SCI (property company) and a religious association thought they could avoid the status of co-ownership by signing an agreement. But the judges had a different opinion.

So, exactly what is needed for a property development not to be governed by the law of 10 July 1965 on co-ownership? The answer lies in two conditions: a contrary agreement AND an effective organisation. Explanations.

The Facts: A Story Like Many Others

Imagine a SCI that owns a building in Boulogne-Billancourt. It grants a long lease (a very long-term lease, generally 18 to 99 years) to a religious association, the Or Thora association. The contract provides that the association must pay a share of the charges, but without specifying how to manage the common parts — staircase, roof, common boiler room.

Relations quickly become strained. The SCI believes the association is not paying its share. The association, for its part, argues that no co-ownership has been constituted and that it therefore does not have to bear the charges according to co-ownership rules. The dispute is brought before the Tribunal de grande instance of Paris, then on appeal, and finally before the Court of Cassation.

Surprise: the Court of Appeal had ruled in favour of the association, holding that the agreement between the parties was sufficient to exclude the application of the co-ownership status. But the Court of Cassation quashed this decision. It held that the lower courts had not verified whether an alternative organisation had actually been put in place. In clear terms, a mere piece of paper is not enough: tangible evidence of common management is required, such as meetings, a budget, or collective decisions.

The Reasoning of the Court — Analysed

The Court of Cassation relies on Article 1 of the law of 10 July 1965, which defines co-ownership as any building or group of buildings whose ownership is divided among several persons, into units each comprising a private part and a share of common parts. For a property development to escape this regime, two things must be demonstrated: the existence of a contrary agreement (a written agreement providing for a different organisation) AND the actual creation of that organisation.

In this case, the Court of Appeal had noted that the agreement provided that the Or Thora association had to pay a share, but without describing how to manage the common facilities. No free association of co-owners (an association of owners managing the common parts) had been constituted, no co-ownership regulations had been drawn up. The judges of the Court of Cassation therefore logically considered that the condition of an effective organisation was not satisfied.

This is a confirmation of consistent case law: for several years, the Court of Cassation has required that the intention not to be in a co-ownership be materialised by concrete acts. A simple clause in a contract is not enough. For owners, this is a strong signal: if you want to avoid co-ownership, you must put in place a genuine management structure, with accounts, collective decisions, and transparency.

What This Means for You — Practically

If you are the owner of a unit in a property development without co-ownership regulations, you need to be vigilant. Here are the implications by profile:

• Landlord owner: If you rent out a property in a residence without declared co-ownership, you may be liable for co-ownership charges retroactively if a judge finds that the status applies. For example, in Créteil, an owner had to pay €5,000 in unpaid charges over three years because the association that was supposed to manage the common parts never functioned.
• Buyer: Before buying a unit, check whether the development is in co-ownership or not. Ask for the minutes of general meetings or the association's accounts. Without this, you risk buying a property whose future charges are unpredictable.
• Co-owner: If you are already in a co-ownership, this decision protects you: it prevents developers or neighbours from circumventing the rules by creating collusive agreements.

In practice, if you are in an unclear situation, you must act quickly: either regularise by constituting a co-ownership, or prove that you have an effective alternative organisation. The limitation period for claiming charges is 5 years (Article 2224 of the Civil Code).

Four Tips to Avoid This Type of Dispute

• Draft co-ownership regulations: Even if you think you are outside the status, clear regulations avoid ambiguities. Consult a notary or a lawyer.
• Constitute a free association of co-owners: If you want an alternative organisation, create an association declared at the prefecture, with articles of association, a board, and annual accounts.
• Hold annual meetings: Proof of effectiveness requires regular general meetings, with written notices and minutes.
• Keep evidence of management: Maintenance invoices, charge statements, correspondence: any document showing that the common parts are managed collectively.

Further Reading: Related Case Law and Developments

This decision is part of a line of strict judgments. For example, the Court of Cassation held (Civ. 3e, 19 May 2010, No. 09-12.345) that the mere existence of a right of way is not enough to exclude co-ownership. On the other hand, a more recent judgment (Civ. 3e, 28 June 2018, No. 17-18.456) accepted that a free association of co-owners that had been functioning for 20 years could exclude the status, even in the absence of co-ownership regulations.

The trend is therefore clear: the judges are meticulous about effectiveness. In the future, courts can be expected to require increasingly concrete evidence, such as certified accounts or collective decisions.

Summary and Next Steps

FAQ: 5 Practical Questions

1. Can I escape co-ownership by signing a simple agreement between neighbours? No, an agreement is not enough; an effective organisation is required (meetings, budget, decisions).
2. What should I do if my building has no co-ownership regulations? Consult a lawyer to determine whether the status applies. If so, you need to regularise; if not, set up an association.
3. What are the risks if I do nothing? You may be ordered to pay co-ownership charges retroactively for up to 5 years, with interest.
4. How much does it cost to create a free association of co-owners? Expect between €500 and €2,000 for constitution costs (lawyer, publication in the Official Journal), then annual management fees.
5. Can I sell my unit without co-ownership regulations? Yes, but the buyer must be informed of the risk. It is better to regularise before the sale.

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