Apportionment of Service Charges in Shared Ownership: The Judge Can Reapportion Everything, Even Create Special Charges

Imagine: you have just bought a flat with a parking space in Le Cannet. Everything seems perfect. But at the first general meeting, you discover that you are paying €200 per year for the maintenance of the swimming pool, even though you do not have access to that pool. Unfair, isn't it? You are not alone. In Nice, hundreds of co-owners discover each year that their leasehold agreement apportions service charges inequitably. Some pay for facilities they do not use, while others are undercharged. What can you do when the clause is abusive? How far can the judge go to restore balance? The Court of Cassation, in a judgment of 22 June 2005, provides a clear answer: the judge can not only annul the clause but also completely reapportion the charges, including creating special charges. A decision that changes the game.

But what exactly does it change? Until now, some courts hesitated to go that far. They would annul the clause but refer the parties back to negotiation, leaving the co-owner in uncertainty. Now, the judge has full power to rewrite the rules. However, beware: this is not a blank cheque. The decision must respect the mandatory principles of the Law of 1965. In short, the judge must find a solution that is fair, proportionate, and above all compliant with the law.

For property owners on the French Riviera, where property is expensive and service charges are high, this case law is a valuable weapon. Whether you are in Nice, Le Cannet, or elsewhere, if your leasehold agreement seems unfair, know that the courts can overhaul everything. How? That is what we will see.

The Facts: A Story That Happens Every Day

Mr X is the owner of a flat in Nice, in a shared ownership scheme comprising several buildings and parking spaces. The leasehold agreement, drafted in the 1970s, apportions general service charges (maintenance of common parts, lift, etc.) according to the share of common parts (i.e., the share of each unit in the common parts). So far, nothing abnormal. But a problem arises: some parking spaces were created by subdividing an original unit. The agreement did not foresee this situation. Result: the owners of these new spaces pay the same charges as the others, even though they do not use the same facilities. For example, they contribute to the maintenance of the swimming pool even though they do not have access to it.

Mr X challenges this. He brings the matter before the Tribunal de Grande Instance of Grasse, which rules in his favour: the clause apportioning service charges is annulled. But the tribunal goes no further, leaving the co-owners to find a new apportionment on their own. Mr X appeals. The Court of Appeal of Aix-en-Provence confirms the annulment, but this time it decides to fix a new apportionment itself, including the creation of special charges for the parking spaces. The syndicate of co-owners (the management company) appeals to the Court of Cassation, arguing that the judge cannot create special charges, only apportion existing charges.

Twist: the Court of Cassation dismisses the appeal. It upholds the reasoning of the Court of Appeal. In other words, the judge has the power to create special charges when this is essential to comply with the mandatory provisions of the Law of 10 July 1965. What few people know is that this law requires an apportionment of service charges according to the objective utility of each facility for each unit. If a clause is contrary, the judge can redo everything.

The Reasoning of the Court — Analysed

To understand this decision, we must go back to Article 43 of the Law of 10 July 1965. This article provides that "clauses in leasehold agreements contrary to the provisions of Articles 6 to 37, 41-1 to 41-5 and 42 are deemed unwritten." In other words, an illegal clause simply does not exist. But what then? Article 43 specifies that the judge may "proceed to a new apportionment of service charges and fix all modalities that compliance with mandatory provisions imposes." The Court of Cassation, in this judgment, adds that this includes the creation of special charges "when this proves essential under the law."

However, beware: this is not a blank cheque. The judge must respect the principle of equality between co-owners. Concretely, service charges must be apportioned according to the utility that each unit derives from the collective services and common facilities. For example, if only certain units use the swimming pool, only those units should pay for its maintenance. This is what is called special charges, provided for in Article 10 of the Law of 1965.

In this case, the Court of Appeal had found that the disputed parking spaces did not benefit from the swimming pool, garden, or lift. It was therefore essential to create special charges for these facilities, so as not to make the owners of these spaces pay unduly. The Court of Cassation approved this reasoning.

undefined that if you believe you are paying too much in service charges relative to what you use, you can ask the judge to reapportion them. But beware: the judge will only intervene if the clause is manifestly contrary to the law. If the clause is merely clumsy or ambiguous, you must first try to modify it at a general meeting.

What This Changes for You — Concretely

If you are a unit owner in a shared ownership scheme, this decision is a protection. It allows you to challenge an unfair apportionment, even if the agreement was voted on years ago. Here are some concrete situations:

• Landlord owner: You rent out a flat in Le Cannet. The agreement requires you to pay a share of the swimming pool charges, even though your tenant does not have access to it (e.g., the unit does not have a badge). You can ask the judge to annul this clause and create a special charge only for units benefiting from the swimming pool. Potential saving: €300 to €500 per year.
• Owner of a parking space: In Nice, you own a parking space in a shared ownership scheme with a lift. You pay for the maintenance of the lift, but your space is on the ground floor; you never use it. The clause is abusive. You can demand an apportionment proportionate to actual utility.
• Purchaser: Before buying, have the leasehold agreement examined by a professional. If clauses seem suspicious, you can negotiate a price reduction or demand a modification before the sale.

undefined, I have encountered cases where co-owners paid up to €1,000 per year for facilities they did not use. Thanks to this case law, we obtained a partial refund and a new apportionment. If you are in this situation, you must act quickly: the action to nullify a clause is time-barred 5 years from the publication of the agreement or the decision of the general meeting.

Four Tips to Avoid This Type of Dispute

• 1. Check your leasehold agreement: Ask the management company for a copy. Identify the clauses apportioning service charges, especially for specific facilities (swimming pool, lift, parking, garden). If you notice an anomaly (e.g., your unit does not have the facility but pays), note it.
• 2. Consult a lawyer lawyer: Before starting proceedings, have your situation analysed. A lawyer will tell you whether the clause is contrary to the law and what your chances of success are. A 30-minute initial consultation can save you years of unnecessary proceedings.
• 3. Try an amicable resolution: Before going to court, propose to the management company to modify the apportionment at a general meeting. If you obtain the majority's agreement, it is faster and cheaper. But beware: special charges often require unanimity.
• 4. Act within the deadlines: The 5-year limitation period runs from the moment you became aware of the clause. Do not delay, especially if you have just bought. If the clause was voted on at a general meeting, you have 2 months to challenge that decision.

Further Reading: Related Case Law and Developments

This 2005 judgment is part of a line of decisions protecting co-owners. Already in 1999, the Court of Cassation had held that the judge could substitute a new apportionment for an annulled clause (Civ. 3e, 10 November 1999, n° 97-22.075). But it had not expressly mentioned the creation of special charges. The 2005 judgment goes further: it clarifies that the judge has all powers to restore balance.

Since then, the trend has been confirmed. In 2012, the Court of Cassation reiterated that the judge cannot merely annul the clause; he must fix a new apportionment (Civ. 3e, 22 February 2012, n° 10-27.294). And in 2018, it specified that this new apportionment may include special charges if necessary (Civ. 3e, 7 June 2018, n° 17-18.086).

However, beware: some Court of Appeal decisions remain cautious. For example, the Paris Court of Appeal has sometimes referred the parties back to negotiation, considering that the judge should not substitute himself for the general meeting. But the Court of Cassation has systematically censured these positions. In short, the trend is clear: the judge has the final say.

For the future, we can expect courts to become increasingly demanding regarding the justification of charges. Management companies will have to prove that the apportionment complies with the law, on pain of having the clauses annulled. This is good news for co-owners, but also for transparency in shared ownership schemes.

Key Points to Remember

• Are you paying charges for a facility you do not use? The clause is likely abusive. You can ask for its annulment and a new apportionment.
• The judge can redo everything: He can not only annul the clause but also create special charges for units that actually benefit from the facility.
• Act quickly: You have 5 years from discovery of the clause to challenge it. If the clause was voted on at a general meeting, the deadline is 2 months.
• Consult a lawyer: Each situation is unique. A lawyer specialising in property law can assess your chances and guide you.
• Do not neglect the amicable route: Before going to court, try to modify the clause at a general meeting. But if the management company refuses, do not hesitate to take the matter to court.

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