Law no. 1.531 of 29 July 2022 reforming the status of co-ownership of built properties

Law no. 1.531 of 29 July 2022 amending the provisions of Law no. 1.329 of 8 January 2007 on co-ownership of built properties, as amended (JDM no. 8603 of 12 August 2022) is the result of bill no. 1058 which was tabled in the Public Session of the Parliament on 30 June 2022, and passed on 27 July 2022.

Purpose of the reform:

The amendments to Law no. 1.329 of 8 January 2007 (already amended three times [1]) aim to modernise the status of co-ownership in order to address practical difficulties in organisation and administration.

[1] Previous amendments to Law no. 1.329, by: Law no. 1.369 of 20 May 2010 (art. 28, extension of the period during which co-ownership created prior to Law no. 1.329 were obliged to comply, to 5 years); Law no. 1.391 of 2 July 2012 (arts. 3, 6, 8, 9, 11, 11-1, 14, 15, 16, 17, 19, 20, 25-1, 28 to resolve, with due respect for the right of ownership, the difficulties of application of Law no. 1.329); Law no. 1.481 of 17 December 2019 on civil solidarity contracts (Art. 13 and 22, addition of the partner of a common life contract and the cohabitant of a cohabitation contract).

SUMMARY

The general status of co-ownership has been updated to improve governance and facilitate the decision-making process at the general meeting, with exemptions applicable to small co-ownerships with no more than ten lots, and to “two-owner co-ownerships”.

The remodelled system remains based on the main principles of property law, personal law and the law of obligations, with the guiding principle being the search for a balance between respecting the individual rights of co-owners and facilitating the collective management of the building.

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IN DETAIL

1/ Organisation of co-ownership:

♦ Explicit distinction of general common parts (undivided property of all co-owners), special common parts (undivided property of some co-owners), and private enjoyment (over which one co-owner benefits from exclusive enjoyment).

Special and private common areas can only exist if the condominium regulations so provide.

If the condominium by-laws do not specify the charges that the holder of the right of private enjoyment should bear, these charges would be shared among all the condominium owners even though they do not have the use of this common area.

♦ Addition concerning rights ancillary to the common parts.

In the silence or contradiction of the titles, the right to raise a building comprising several premises which constitute private parts, and the right to build relating to the common parts are newly deemed to be accessory rights to the common parts (the rest unchanged).

♦ Legal recognition of the principle that no easement can be established over a common area for the benefit of a co-ownership lot (each lot has a share of the co-ownership rights attached to it).

An easement can only be established between two separate properties, namely the so-called “servient property” and the so-called “dominant property”, which belong to two separate owners.

The owner of a lot is also the undivided owner of the common portions. The joining of the servient property and the dominant property in one hand is an obstacle to the constitution of an easement.

♦ Definition of the modalities of acquisition or alienation of common parts, or constitution of real property rights by the syndicat.

The syndic de copropriété (the legal representative of the syndicat) is empowered to sign, on behalf of the syndicat, the deeds of acquisition or alienation of the common parts or the constitution of real property rights for the benefit or charge of the latter (which will have been decided by the general assembly, in compliance with the voting rules provided for by Law no. 1.329 as amended).

♦ Establishment of an exemption concerning certain costs so that they are charged to the co-owner concerned alone, namely:

— The necessary costs incurred by the syndicat, in particular the costs of formal notice, reminders and the taking of a mortgage from the date of formal notice, for the recovery of a justified debt against a co-owner as well as the fees and emoluments of the acts of the bailiffs and the right of recovery or collection payable by the debtor ;

— The costs and fees of the syndic relating to services rendered for the benefit of this co-owner.

♦ Obligation of each co-owner (whether or not he/she is an occupier[2]) and of each syndicat of co-owners to insure against the risks of civil liability with an insurance company approved in the Principality of Monaco.

2/ Administration of the co-ownership:

♦ Obligation to attach to the convocation of the general assemblies the estimates relating to works and expenses as soon as they exceed a certain amount set by ministerial order, in order to provide full information to the co-owners.

In order to reduce administrative formalities (avoiding the need for photocopies), estimates and documents relating to the accounts may be communicated to co-owners via a secure online access (Cloud), unless the general meeting decides otherwise, which may oppose this dematerialisation (not all syndic have a Cloud).

In order to avoid any risk of litigation, it is specified that the communication of dematerialised documents is done by derogation to the provisions of the first paragraph of article 25-1 which stipulates that “All notifications and formal notices provided for by this law shall be made by registered letter with a request for acknowledgement of receipt by post”.

Nevertheless, co-owners who expressly request it may obtain a copy of the documents. In this case, the costs of reproducing and sending the documents are charged to the general expenses of the syndicat of co-owners.

♦ Introduction of a deadline for notification by the co-owners or the conseil syndical to the syndic of the questions to be included in the agenda of the next general assembly/meeting, i.e. a maximum of ten days before the dispatch of the convocation . Another condition is that the questions must have been received by the syndic before the convocation is sent out.

In concrete terms, the general principle is that a co-owner or the conseil syndical may, at any time, notify the syndic of the questions he or she wishes to have included on the agenda of a general meeting.

In order to be included on the agenda of the next general meeting, the questions must be notified at least ten days before the convocation is sent by the conseil syndical and received by the conseil syndical before the convocation is sent. This last clarification takes into account the fact that questions sent from abroad could be received, despite the respect of the ten-day notification period, after the sending of the notice of meeting.

Questions notified or received in disregard of these deadlines shall be postponed until the next general meeting.

♦ Functioning of the general assembly/meeting:

— When the syndicat comprises no more than five co-owners, the holding of a general meeting without an assessor is now possible in the event that only one co-owner is present. In this case, the latter is designated as the chairman of the meeting. The purpose of this provision in the context of small co-ownerships is not to block the voting of certain decisions which may be essential for the proper functioning of the co-ownership, such as maintenance work or current charges for example.

—Clarification of the procedures for appointing the president and the assessor of the general assembly, namely by a majority of the votes cast by the owners present or represented, excluding the votes of abstainers, as provided for in article 14 of Law no. 1.329, by means of a separate vote. The mention of this election must be included in the minutes under penalty of nullity.

— The secretary shall ensure that the general meeting is held.

— Reduction of the majority (two-thirds of the votes of the co-owners present or represented, instead of unanimity) for the adoption of decisions relating to the raising, scouring or construction of new private premises in cases where the said work is not carried out by the syndicat but initiated by one of the co-owners on a private lot. The unanimous vote of the co-owners present or represented, representing at least two-thirds of the votes of all the co-owners, is thus limited to decisions relating to the raising, scouring or construction of new private premises carried out by the syndicat.

— In the interests of better management, the time limit for sending the minutes (procès-verbal) of the general meeting by the syndic is reduced to one month (previously two months) from the date of the general meeting.

Erratum to Article 14 of Law No. 1.531 of 29 July 2022 amending Article 19 of Law no. 1.329 (JDM No. 8610 of 30 September 2022). Rectification of an editorial error regarding the time limit for challenging decisions of the general meeting. Although this was not apparent from the preparatory works, according to the initial drafting of Article 14 of Law no. 1.531 of 29 July 2022, its original wording led to a reduction of the two-month time limit for challenging decisions of the general meeting to one month. The Erratum reinstates that “Actions whose purpose is to contest the decisions of the general meeting must, under penalty of forfeiture, be brought before the court of first instance by the opposing or defaulting co-owners within a period of two months from the notification of the said decisions which is validly made to them, at the behest of the syndic.”

♦ In the event of an impediment or proven failure of the syndic that would jeopardise the conservation of the building, the health or safety of the occupants, new derogatory regime for small co-ownerships comprising no more than ten lots: each co-owner may take the initiative of convening an extraordinary general meeting so that it appoints a new syndic or takes the necessary decisions.

♦ Extension of the missions of the syndic. The syndic must now establish and keep up to date a documentation of the building, the content of which is defined by ministerial order. Copies and extracts of documents are only issued to co-owners who expressly request them, and at their expense, in order to limit unjustified requests.

In addition, the professional syndic has the option of offering online access in a secure area to dematerialised documents relating to the management of the building or the lots managed, as well as to dematerialised documents that are or have been the subject of a decision by the general meeting, unless the general meeting decides otherwise. The minimum list of these documents is specified by ministerial order.

♦ It is specified that the decisions of the conseil syndical, if one is set up (whose role is to assist the syndic and control his management), are taken by a majority of the votes of the co-owners composing it. In the event of a tie, the President has the casting vote.

3/ New special provisions for small co-ownerships composed of two co-owners:

Derogations are made to certain rules of the common statute of co-ownership, which are unsuitable for “two-owner co-ownerships”, or which are too rigid, by ensuring a balance between remedying blockages and preserving the rights of the minority co-owner for the most important decisions.

♦ Partial derogation from the rule of the reduction of votes of the majority co-owner (when a co-owner has a share of the common parts greater than half, the number of votes he has is reduced to the sum of the votes of the other co-owners): the decisions of the general assembly falling within the scope of the majority of the votes cast of co-owners present or represented, as well as the appointment of the syndic, can be taken by the co-owner holding more than half of the votes.

♦ In the absence of a professional syndic, the two co-owners making up the syndicat may meet without prior convocation to take all decisions, including those requiring unanimity.