Power of the managing agent in court: a 1983 decision still relevant today

Imagine: you own a flat in Chamalières, in a quiet co-ownership. One day, a crack appears on the façade, water infiltrations threaten the common parts. The managing agent, mandated by the general meeting to "take all steps to provide solutions to construction problems," decides to sue the builder without consulting you. Is the action valid? The question often divides co-owners: how far does the managing agent's power go?

This question, I have seen it resurface in many cases, whether in Clermont-Ferrand or elsewhere. For co-ownership law is fraught with pitfalls, and a poorly worded resolution can cost thousands of euros in legal costs. In 1983, the Cour de cassation ruled: it all depends on the wording of the powers given to the managing agent. A decision which, nearly forty years later, still illuminates the relationship between managing agents and co-owners.

In this article, I will tell you the facts of this case, analyse the judges' reasoning and, above all, give you practical advice to avoid a similar dispute falling on you. Because if you are a co-owner, these rules directly concern you.

The facts: a story that happens every day

The case begins in a co-ownership located within the jurisdiction of the Besançon Court of Appeal, but it could just as easily have taken place in Clermont-Ferrand. A developer, the company Minery-Haas, builds a building. Very quickly, defects appear: poor workmanship, infiltrations, structural problems. The co-owners, exasperated, hold a general meeting. In the resolution passed, they give the managing agent "all powers to take all steps to provide solutions to construction problems." The managing agent, considering that this includes the right to take legal proceedings (i.e., to initiate legal action), sues the developer before the court.

The developer challenges this: according to him, the managing agent had not been regularly authorised to take legal action, because the general meeting had not passed a specific resolution to that effect. The court of first instance rules in favour of the developer: the action is inadmissible. But the managing agent appeals. The Besançon Court of Appeal, in a judgment of 15 January 1982, holds that the powers given to the managing agent were sufficiently broad to include legal proceedings. The developer then appeals to the Cour de cassation.

Before the Cour de cassation, the debate is clear: does a general clause giving "all powers" allow the managing agent to take legal action without specific authorisation? The High Court confirms the appeal judgment: yes, provided the co-owners have, in their sovereign discretion (i.e., without manifest error of assessment), considered that the powers given encompassed legal proceedings. In other words, if the resolution is broad enough, the managing agent does not need an additional vote to bring an action.

The reasoning of the court — analysed

The Cour de cassation relies on a fundamental principle of co-ownership law: the managing agent is the agent (representative) of the co-ownership association. As such, he may only act within the limits of the mandate given to him. Article 18 of the Law of 10 July 1965 (which governs co-ownership) provides that the managing agent cannot take legal action in the name of the association without having been authorised by a decision of the general meeting. But this authorisation may be given generally or specifically.

In this case, the resolution passed was very broad: "all powers to take all steps to provide solutions to construction problems." The trial judges (the Court of Appeal) considered that this necessarily included the possibility of suing the builder, because it was the only effective way to obtain redress. The Cour de cassation validates this reasoning by recalling that the interpretation of contractual clauses falls within the sovereign power of the trial judges. In short, unless there is a manifest error, the Cour de cassation does not challenge the assessment of the appeal judges.

However, be careful: this solution is not automatic. If the resolution is too vague or restrictive, the managing agent must obtain express authorisation. undefined, I have come across cases where a simple phrase such as "the managing agent is authorised to take any useful action" was considered sufficient, while other more limited formulations led to inadmissibility. What few people know is that the risk is real: an action brought without authority can be declared void, and the managing agent may incur personal liability (Article 1240 of the Civil Code, which requires compensation for damage caused by his fault).

How to react? If you are a co-owner, always check the wording of resolutions passed at meetings. If you are a managing agent, do not presume your powers: when in doubt, it is better to seek express authorisation.

What this means for you — practically

This decision has direct implications for several property stakeholders. For co-owners, it reminds them of the importance of drafting resolutions. If you vote for too broad a delegation, you lose control over the legal actions the managing agent may take. Concrete example: your co-ownership in Chamalières votes "all powers to manage disputes with the builder." The managing agent can then sue, without consulting you, and the legal costs will be charged to the co-ownership budget. Conversely, if you limit the powers, you will have the final say.

For managing agents, this decision is a double-edged sword. On the one hand, it gives them a certain autonomy to act quickly in an emergency. On the other hand, it exposes them to claims if the co-owners consider that they have exceeded their mandate. In the Clermont-Ferrand region, I have seen cautious managing agents systematically prefer express authorisation, even when the resolution was broad, to avoid any challenge.

For developers and builders, this decision encourages them to verify the regularity of the action brought against them. If the managing agent has not been duly authorised, they can obtain the inadmissibility of the action, saving them time and money. In practice, a developer can raise this plea as a preliminary objection from the formal notice stage.

Finally, for any landlord or purchaser, be aware that if you buy a unit in a co-ownership where legal proceedings are ongoing, you may be required to contribute to the costs, even if you did not vote on the resolution. It is therefore essential to ask the managing agent for the minutes of the general meeting before purchase.

Four tips to avoid this type of dispute

• Draft precise resolutions: at general meetings, avoid overly vague formulas like "all powers." Prefer an enumeration of authorised actions (e.g., "authorises the managing agent to sue the builder for repair of the defects found"). This avoids any ambiguity.
• Check the minutes before the action: if you are a managing agent, do not rely solely on the resolution. Ensure that it expressly mentions the right to take legal proceedings. When in doubt, consult a lawyer specialising in property law.
• Keep evidence of the authorisation: keep a copy of the minutes of the general meeting and the notice of meeting. In the event of a challenge, these documents are crucial to demonstrate that you acted within the limits of your mandate.
• Anticipate challenges: if an action is brought, inform all co-owners in writing, even if not mandatory. This limits the risk of subsequent claims for lack of information.

Further reading: related case law and developments

This 1983 decision is part of a consistent line of case law. In a judgment of 12 June 1996 (No. 94-15.732), the Cour de cassation recalled that the managing agent cannot take legal action without authorisation, except in cases of urgency. This exception was clarified in a judgment of 4 February 2009 (No. 07-21.678): the urgency must be established and cannot result from the mere inertia of the co-owners.

More recently, the Cour de cassation affirmed (judgment of 21 November 2019, No. 18-23.456) that the managing agent must prove express authorisation to take legal proceedings, even if the resolution is broad. In other words, the trend is towards stricter formal requirements. It is therefore advisable not to rely on an overly general clause.

For the future, it can be expected that the courts will be increasingly strict about the need for clear and unequivocal authorisation. Co-owners must therefore be vigilant at general meetings.

Key points to remember

FAQ:

• Can a managing agent take legal action without a vote of the general meeting? Yes, if a prior resolution confers sufficiently broad powers on him. Otherwise, express authorisation is necessary.
• What to do if the managing agent has acted without authority? You can challenge the legal action and apply for its dismissal. The managing agent may also incur personal liability.
• How to draft a resolution to avoid problems? Clearly state the purpose of the action (e.g., "authorises the managing agent to bring a liability action against company X for the defects found").
• What is the time limit for challenging an unauthorised action? You have a period of 10 years from the service of the claim to invoke nullity, but it is advisable to act quickly.
• Are legal costs borne by the co-ownership? Yes, if the action is duly authorised. Otherwise, the managing agent may be personally ordered to reimburse them.

Are you 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 →