Co-ownership in difficulty: preventive measures with the intervention of an ad hoc representative

Verified 12 April 2024 - Directorate for Legal and Administrative Information (Prime Minister)

Your condominium is experiencing financial difficulties? The alert procedure allows the appointment of an ad hoc trustee whose mission is to develop solutions to improve the operation of the condominium and restore its financial situation. We are taking stock of the regulations.

A condominium is considered to be in difficulty when it can no longer pay its bills (water, energy or works bill, etc.).

The condominium trustee must then trigger the alert procedure for requesting the appointment of an ad hoc representative.

The alert procedure must be triggered in 2 cases.

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Approval of accounts

The alert procedure shall be initiated when, at the time of drawing up the annual accounts, it is established that the outstanding amounts have reached 25% amounts payable if the condominium includes up to 200 condominium lots (15% if it consists of 201 lots or more)

This percentage shall be calculated on the basis of the amounts due under provisional budget and the following expenditure:

  • Building conservation and maintenance work (excluding maintenance)
  • Work on common equipment (excluding maintenance)
  • Improvement work
  • Technical studies (diagnostics and consultations)

FYI  

sums that become due in the month preceding the balance sheet date shall not be considered as unpaid amounts.

Lack of account approval

The alert procedure can also be initiated in the absence of a vote by the general meeting on the approval of the accounts for at least two years.

In these circumstances, the trustee must inform the trade union council. This information must present the statement of unpaid amounts before allocation at the date of closure of the accounts. The letter must be addressed without delay to each member of the trade union council.

The liquidator must apply to the court for the appointment of an ad hoc agent.

The trustee has 1 month from the closure of the accounts for to lodge an appeal with the president of the judicial tribunal the location of the immovable and request the appointment of an ad hoc representative.

FYI  

the trustee does not need to obtain the authorization at the general meeting of the co-owners in order to bring the matter before the court.

In the absence of any action by the liquidator within one month of the closure of the accounts, in the absence of a liquidator or in the absence of a vote by the general meeting on the approval of the accounts for at least 2 years, the President of the Court of Justice may be seised directly by one of the following persons:

  • Co-owners representing at least 15% of the votes of the joint owners' union
  • President of the trade union council. He is acting at the expense of the co-owners' union. He must provide the trustee with a statement of anticipated legal costs accompanied by estimates so that he can make the necessary advances
  • Creditor whose works, water or energy bills, voted by the General Assembly and executed, remain unpaid for at least 6 months and after one command to pay disrespected
  • Prefect
  • Public Prosecutor
  • Chairman of the legislative body of theEPCI: titleContent competent for the housing of the location of the building
  • Mayor of the municipality where the building is located

Where the application for the appointment of an ad hoc representative does not originate from the liquidator, the President of the Judicial Tribunal shall give a ruling in the form of the application for interim measures. The summons is issued to the union of the co-owners.

The referral must be accompanied by supporting documents (unpaid invoices, reminder letters, letters of formal notice, exchanges of miscellaneous mail, etc.).

The President of the Judicial Tribunal may hear any person of his choice before rendering his decision.

Warning  

the co-owners (representing together at least 15% votes of the trade union or the president of the trade union council) or creditors who have appealed to the president of the judicial tribunal must inform the prefect, the mayor of the commune where the building is located and the president of the legislative body of the courtEPCI: titleContent competent for the housing of the location of the building.

The judicial tribunal may appoint by order or on application an ad hoc representative whose duties and remuneration it shall determine.

The ad hoc trustee appointed shall receive a flat-rate remuneration for his entire mission, the amount of which shall be fixed taking into account the number of lots in the condominium.

The ad hoc trustee may be a court administrator or, exceptionally, a natural person (an individual) or a legal person have special experience or qualifications and satisfy in particular the conditions of impartiality and independence.

The designated ad hoc representative must notify the co-owners without delay by registered letter with acknowledgement of receipt or delivery against receipt.

FYI  

the ad hoc trustee may not be appointed liquidator at the end of his duties.

The ad hoc trustee shall have the following tasks:

  • Analyze the financial situation of the condominium and the condition of the building
  • Develop recommendations to restore financial balance and ensure building safety
  • Conduct any mediation and negotiation actions between the parties involved

The ad hoc representative may be assisted at his own expense, upon authorization by the judge, by any third party of his choice to carry out his task.

In addition, the liquidator must provide the appointed ad hoc representative with all the documents necessary for the performance of his task. The transmission of these documents must be made within 15 days of the notification of the judge's order to the trustee.

The ad hoc trustee may refer to the President of the Judicial Tribunal any difficulties encountered in the performance of his task.

The ad hoc trustee must first send a mission report to the President of the Judicial Tribunal in a three-month period renewable once.

The report shall include the following:

  • State of play of the legal and land organization of the condominium
  • Technical situation of the building (analysis of running costs, exceptional works and operations and diagnostics)
  • Analysis of the functioning of the co-ownership bodies, of all accounts (unpaid, debts and unrecovered debts, etc.), pending litigation and contracts signed
  • Recommendations, timetable of actions to be implemented in order of priority and summary estimate of expenditure and revenue envisaged under these actions

Where the ad hoc trustee finds that the condominium is experiencing significant financial or management difficulties, he must apply to the court for the appointment of a provisional administrator to avoid delaying the implementation of measures to remedy the difficulties.

This report must then be transmitted by the court registry to the trustee, the trade union council, the mayor of the commune where the building is located, the prefect and the president of the legislative body of the unionEPCI: titleContent competent for the housing of the location of the building.

The trustee must inform each co-owner of the possibility to consult the mission report, at his office or any other place fixed by the general meeting, during working hours in the month following the delivery of the report.

This information should be sent to them by one of the following:

  • Registered letter with notice of receipt
  • Discount against sign-in
  • E-mail with the agreement of the co-owner who has been previously informed of this possibility

An excerpt from the report may be attached to the mail.

A copy of the report may be given to any co-owner who so requests and at his own expense, including by electronic means.

The trustee must put the draft resolutions necessary for the implementation of the report on the agenda of the next general meeting of the co-owners. This general meeting shall be held within the following time limits:

  • Within 6 months of the report if no emergency action is recommended
  • Or within 3 months of the report if emergency measures are recommended

The trustee must convene a special general meeting if no meeting is already scheduled within the deadline (6 or 3 months).

The minutes of the general meeting held must then be notified by the trustee within 6 months of the delivery of the report to the following persons:

  • Authors of referral
  • Judge
  • Ad hoc agent

The President of the Judicial Tribunal shall specify and give special reasons in his decision for charging the costs relating to the intervention of the ad hoc representative. This assignment may take place between the syndicate of the co-owners and the other parties to the proceedings, or the sharing of costs between them.

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