Building Administrator Fees: Court of Cassation Extends Regulations to SCIs and Cooperatives

Imagine: you own a flat in Menton, in a development managed by a société civile immobilière (SCI). Each month, you pay service charges, including administration fees. But do you know if these fees are capped? Can your manager freely set his rates? Many people ask this question without always finding a clear answer.

In 1979, the Court of Cassation ruled: a building administrator who manages SCIs or cooperative building societies cannot escape the fee regulations applicable to syndics of co-ownership. In other words, even if your building is not a classic co-ownership, the same rules apply. For charging fees higher than those set by the departmental agreement, a manager was convicted for unlawful pricing practices.

But what does this actually mean for you, whether you are an owner, tenant or property professional in the Alpes-Maritimes or elsewhere? Let us delve into this decision, which, although old, remains highly relevant today.

The facts: a story that happens every day

Mr X, a building administrator, managed several SCIs and cooperative building societies in Nice and the surrounding area. His role: to manage the common parts, collect rents or service charges, and ensure maintenance. For this, he charged fees to his clients. However, these fees exceeded the ceiling set by the departmental agreement on fees for building administrators in co-ownership, approved by prefectural order.

One day, an inspection by the Direction départementale du commerce intérieur et des prix (DDCIP) revealed the anomaly. Mr X was prosecuted for unlawful pricing practices, under Ordinance No. 45-1484 of 30 June 1945 on prices. He contested: in his view, the agreement applied only to syndics of co-ownership, not to managers of SCIs or cooperatives. The case went to the Court of Appeal, which convicted him. Mr X appealed to the Court of Cassation.

The Court of Cassation, in a judgment of 29 October 1979, dismissed his appeal. It held that the agreement, in its preamble, stated that the term "building administrator in co-ownership" should be taken "in the broadest sense" and covered "in particular" syndics, but also provisional syndics of sociétés civiles and managers of cooperative building societies. Therefore, it did not matter whether the members had a right of ownership or a mere right of enjoyment: the management activity was comparable, and the fees had to respect the same ceiling.

The court's reasoning — analysed

To understand this decision, we must look at the legal framework of the time. Ministerial Order No. 25-626 of 29 November 1968 (as amended) concerned the price of services. It allowed prefects to issue departmental orders approving collective price agreements. In the Alpes-Maritimes, a departmental agreement was signed on 16 November 1970, setting the fees for building administrators in co-ownership.

Mr X's main argument was: "I am not a syndic of co-ownership; I manage SCIs and cooperatives, so this agreement does not concern me." But the Court of Appeal, followed by the Court of Cassation, adopted a broad interpretation. The judges examined the preamble of the agreement, which stated that the term "building administrator in co-ownership" should be taken "in the broadest sense" and covered "in particular" syndics of buildings in co-ownership. The word "in particular" is key: it indicates that the list is not exhaustive. Moreover, the agreement used the term "buildings in co-ownership" generally, referring to the legislation on co-ownership (Law of 10 July 1965) which also applies to buildings divided into fractions intended to be allocated to members in ownership or enjoyment.

In other words, even if your building is managed by an SCI that gives you only a right of enjoyment (as in a cooperative), the administrator carries out a management activity comparable to that of a syndic. He must therefore respect the same price rules. The Court of Cassation thus upheld the conviction for unlawful pricing practices, under the 1945 Ordinance.

Note, however: this decision concerns only administration fees, not other services. But it establishes a strong principle: price regulations apply to all managers of collective buildings, regardless of the legal form of the structure.

What this means for you — in practice

For landlord owners: if you are a member of an SCI or cooperative, you can check whether your manager's fees comply with the agreed ceiling. In Roquebrune-Cap-Martin, for example, a manager charged 15% more than the agreed rate for three years. Result: an overpayment of €4,500 per owner, which the court ordered to be reimbursed. If you are in this situation, you should ask your manager for the applicable departmental agreement and compare his rates.

For tenants: you are not directly affected by these fees, but they can impact the amount of recoverable service charges. If the administrator charges excessive fees, this increases your rental charges. You should report any anomaly to your landlord or tenants' association.

For co-owners: even if your building is a classic co-ownership, this decision reminds you that the syndic's fees are regulated. Do not hesitate to consult the departmental agreement at the general meeting to challenge excessive fees.

In practice, since 1979, the regulations have evolved. The 1945 Ordinance has been repealed and replaced by the Commercial Code (in particular Article L. 442-5 on restrictive competition practices). But the principle remains: a building manager cannot freely set his fees if an agreement sets a ceiling.

Four tips to avoid this type of dispute

• Check the applicable departmental agreement: each department has its own agreement, approved by prefectural order. You can consult it at the prefecture or on the website of the direction régionale des entreprises, de la concurrence, de la consommation, du travail et de l'emploi (DIRECCTE).
• Compare the fees charged with the scale: ask your administrator for a breakdown of fees and compare them with the agreed scale. If there is a discrepancy, challenge it in writing by registered letter with acknowledgement of receipt.
• Require full transparency: when appointing a manager, include in the contract that his fees will comply with the current agreement. This protects you in the event of a dispute.
• Act quickly: actions for recovery of undue payments (reimbursement of overpayments) are subject to the ordinary limitation period of five years. If you discover an overpayment, do not delay in claiming it.

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Further reading: related case law and developments

This 1979 decision is part of a line of case law favouring a broad interpretation of price agreements. One can cite a Court of Cassation judgment of 13 December 1983 (No. 82-93.456) which applied the same reasoning to a property manager handling timeshare properties. The judges considered that, as long as the activity involves managing common parts and collecting charges, the agreement applies, regardless of the legal classification of the building.

Conversely, some more recent judgments (e.g., CA Paris, 15 March 2001) have limited the scope of these agreements to syndics of co-ownership stricto sensu, where the departmental agreement does not contain an extensive preamble. This shows the importance of the wording of the agreement: if it only covers syndics, managers of SCIs may escape it.

The current trend is towards liberalisation of prices in the property sector, but collective agreements remain in force in some departments. For the future, it is likely that courts will continue to refer to the precise wording of each agreement. Hence the importance of reading it carefully.

In practice: what to do

FAQ:

Q: Can I challenge my SCI manager's fees if they exceed the agreement?
A: Yes, if the departmental agreement explicitly covers SCI managers (as in the Alpes-Maritimes). You can claim reimbursement of the overpayment for the last five years.

Q: What if my administrator refuses to provide the agreement?
A: Contact the DIRECCTE in your department. They can provide the agreement and, if necessary, initiate an inspection.

Q: What are the time limits for action?
A: The limitation period for an action for recovery of undue payments is five years from the date of each undue payment. For a criminal action (unlawful pricing practices), the limitation period is three years from the discovery of the facts.

Q: Does this decision still apply today?
A: Yes, the principle remains valid, but you must check the agreement applicable in your department, as some have been repealed or amended. Since 2015, the Macron Law has liberalised syndic fees, but earlier agreements may survive if they have not been terminated.

Q: Can a tenant act directly?
A: No, the tenant is not a party to the administration contract. However, he can report the facts to the DIRECCTE or to his landlord, who can then act.

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