Property manager and unlawful fees: a 1979 Court of Cassation decision still relevant today

Imagine: you are a co-owner in a residence in Beaulieu-sur-Mer. Each quarter, you receive the property manager's call for funds. One day, you notice a strange line: "Heating management fees: €150". You wonder: isn't the heating already managed by a specialised company? Why is the manager charging extra? Is it legal?

This is precisely the question that the Court of Cassation ruled on in a famous judgment of 3 December 1979. At a time when price controls were strict (1945 order on unlawful prices), the property manager of a co-ownership in Nice had been convicted for receiving additional remuneration for managing heating and maintaining green spaces, even though these services were entrusted to external companies. The High Court held that these tasks already fell within the manager's normal duties, and billing them separately constituted an unlawful increase in fees.

More than forty years later, this decision remains a formidable weapon for co-owners who suspect their property manager of overcharging for services. It recalls a fundamental principle: the manager cannot be paid twice for the same thing. Let us analyse this case, its lessons and the possible remedies.

The facts: a story like many others

In this case, the property manager of a co-ownership in Nice (near Beaulieu-sur-Mer) had been prosecuted by the public prosecutor for having received, in addition to his regulated fees, additional remuneration for managing heating and maintaining "green spaces". These services were nevertheless provided by specialised companies (in particular for heating and green spaces). The manager justified these charges by claiming "technical assistance" he had provided, but in reality he had simply subcontracted this assistance to a study office, the company Cotrim, without informing the co-owners and billing them for the cost.

The dissatisfied co-owners filed a complaint. The case was first heard by the criminal court of Nice, then by the Aix-en-Provence Court of Appeal, before reaching the Court of Cassation. The manager was convicted for unlawful pricing practices under Article 36 of the order of 30 June 1945 (now codified in the Commercial Code). The Court of Appeal upheld the conviction, ruling that the manager had no right to charge for services that fell within his legal mission.

The case took a twist: the manager attempted to defend himself by arguing that he derived no personal profit from the technical assistance fees, as he remitted them in full to the company Cotrim. But the Court of Cassation dismissed this argument: even without personal profit, the manager cannot impose on co-owners costs that fall within his normal duties. In other words, the manager cannot delegate his own obligations to a third party and pass the cost on to the co-owners. It is a matter of principle: the manager must bear the costs of his mission out of his flat-rate fees.

The court's reasoning — explained

The Court of Cassation delivered a very clear judgment. It relied on Article 36, paragraph 1 of Order No. 45-1483 of 30 June 1945 (then in force on prices, since repealed but the logic survives in the regulation of property manager fees). This article prohibits any unlawful pricing practice, that is, any receipt of money in violation of the texts fixing prices.

In this case, a prefectural order issued pursuant to a ministerial order of 1968 set the maximum fees for property managers. The manager had added remuneration for managing heating and green spaces. However, according to paragraph 5 of the appendix to that order, it is part of the manager's duties to supervise the performance of contracts entered into with companies (heating engineer, gardener). Therefore, no additional remuneration is justified: the manager is already paid for this in his basic fees.

The judges also clarified that the manager cannot circumvent this rule by calling on an external company to assist him and passing the cost on to the co-owners. Even if he derives no profit, this practice amounts to evading the cap on fees. The Court of Cassation therefore dismissed the manager's appeal and upheld his criminal conviction.

This reasoning is based on a strict interpretation of the texts, but also on a logic of consumer protection (here, the co-owner). The manager is an agent who must manage the co-ownership diligently; he cannot be remunerated twice for the same mission. The judgment is clear: any receipt of sums beyond the regulated fees, in any form, is unlawful.

What this means for you — practically

This decision has direct implications for co-owners, but also for professional property managers. Here is what you need to remember depending on your profile.

If you are a co-owner: You can challenge any charge line that appears to be double billing for tasks falling within the manager's duties. For example, if your property manager charges "technical management fees" or "site follow-up fees" when these services are supposed to be included in the flat fee, ask for justifications. If the manager refuses, you can refer the matter to the judicial court or, if the amount is small, the local judge. Remember that the manager must provide a clear management contract and detail the included services. Any unjustified additional charge is liable to be annulled.

If you are a professional property manager: Ensure that your management contract complies with regulations. Basic services (day-to-day management, contract supervision, convening meetings) must be covered by the flat-rate fee. You can only charge additional services if they are truly outside your mission (for example, exceptional expert appraisals, specific legal proceedings). But be careful: the temptation to charge "options" that are actually ordinary tasks is great. The 1979 judgment is still cited by courts to penalise such abuses.

Concrete example in Saint-Laurent-du-Var: A co-ownership of 30 units received an invoice from its property manager for "assistance with bringing the heating into compliance" when the maintenance contract already provided that the heating engineer should ensure this compliance. The manager charged €2,000 excluding tax for "coordination fees". Relying on the 1979 case law, the co-owners refused to pay and succeeded before the court. The manager had to reimburse the sums unduly received. Moral: do not let unjustified charges pass.

Four tips to avoid this type of dispute

• Read your management contract carefully. Before signing, check the list of services included in the flat fee and those charged additionally. A good contract should be comprehensive and transparent. If a service seems redundant with the manager's legal obligations, ask for explanations.
• Require quotes for any additional intervention. If the manager announces an out-of-flat-fee service, ask for a detailed written quote. You can then compare with market prices and decide at the general meeting whether to accept it.
• Monitor the co-ownership accounts. When approving the accounts at the general meeting, examine the management fee lines. If you suspect overcharging, ask questions and request supporting documents (company invoices, contracts). Do not hesitate to consult a specialised lawyer if necessary.
• If in doubt, seek a mediator or a lawyer. Before starting proceedings, you can attempt mediation. But if the manager persists, do not hesitate to consult a property lawyer. A simple letter recalling the 1979 case law is often enough to make the manager back down.

Further reading: related case law and developments

The 1979 decision is not isolated. It is part of a line of judgments protecting co-owners against abuses by agents. For example, a Court of Cassation judgment of 20 November 1991 (No. 90-16.272) held that the manager cannot receive a commission on the co-ownership's insurance contracts, as this constitutes a conflict of interest. Likewise, the ALUR law of 2014 strengthened the regulation of property manager fees (standard contract, caps on recovery costs, etc.).

The courts' trend is therefore towards severity: any financial advantage for the manager beyond his declared fees is suspect. Judges closely examine agreements and do not hesitate to reclassify services as tasks included in the flat fee. For the future, it is likely that the digitalisation of management (tracking software) will lead to greater transparency. Managers will have to justify each line of billing. In the meantime, the 1979 judgment remains an essential reference for all aggrieved co-owners.

Key points to remember

FAQ:

Can I refuse to pay additional fees that my property manager imposes for managing heating or green spaces?
Yes, if these tasks fall within his normal mission. You can challenge them by relying on the 1979 case law. Send a recorded delivery letter to the manager citing the judgment and requesting reimbursement. If refused, refer the matter to the court.

What if the manager has already received these sums for several years?
You can claim restitution of undue payments (reimbursement of overpaid sums) for amounts paid within the limitation period. Note: the limitation period is 5 years under general law. It is advisable to act quickly.

Can the manager justify himself by saying he derives no personal profit?
No, as the Court of Cassation ruled in 1979, even without profit, the manager cannot impose on co-owners costs that fall within his mission. The offence is constituted by the mere fact of receiving an unauthorised sum.

Can a property manager charge management fees for a lift maintenance contract?
No, supervising maintenance contracts is part of his duties. He cannot charge additional commission or management fees. Only the cost of the maintenance contract itself is borne by the co-ownership.

How can I check if my property manager complies with regulations?
Consult the management contract and compare it with the list of mandatory services defined by the 2015 decree (appendix to the contract). Any deviation must be justified by an exceptional mission. If in doubt, seek advice from a lawyer.

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