Would you challenge the resolution of the general meeting? Do you feel tricked into the assembly? Has the house decided on a chimney renovation or a new boiler? Do you find it difficult to elect a common representative? Want to decide on a lift replacement and costly renovations? Has AirBnB been approved? How far can the majority go against the minority? It is often not easy to answer such questions. We don’t know either. However, we will help you how to obtain a declaration of invalidity of the general meeting resolution.
Democracy is a good thing, but in the case of a multi-player condominium, a dissatisfied owner often remains after a decision. Everyone is familiar with the picture when dissatisfied owners are thinking about how they can “invalidate” a decision. Surely we ourselves have heard telephone conversations where some residents explain at length the reasons for their dissatisfaction before or after the general meeting. Well, in this article, we want to help them and you if you get into this situation.
At the beginning of the article, we factually describe the essence of challenging the resolution of the General Meeting, and then explain the individual elements in detail. This way, anyone who is only interested in the point can understand the rules of the attack in 2 minutes, and if you are actually involved and immersed in the topic, we recommend that you take 5-10 minutes. Believe me, it’s worth it!
Let’s start with the most important! Challenging a general meeting resolution is a relatively common and fairly well-regulated area. So let’s see clearly what is the possibility for someone who is dissatisfied with the decision made?
For those who are just curious about the essence, here is the summary:
1. The point: Appealing a resolution of the general meeting
- the decision is within sixty (60) days of its adoption
- may be challenged by any co – owner if it
- legislation _
- you are in the memorandum of association
- violates the organizational and operational regulations or
- materially prejudicial to the legitimate interests of the minority .
When considering challenging a resolution of the General Meeting, it is worth performing a three-step analysis of the resolution passed. Above all, compliance with the rules of procedure must be examined. These are usually the easiest to attack. It is then necessary to examine what material rules the decision may infringe or whether it infringes the memorandum of association or organizational-operational conflict. Finally, the conflict with the legitimate interests of the minority is worth examining.
And now, to have a good chance of challenging the decision, know the details.
2. Conflict with the law, the memorandum and articles of association, organizational and operational regulations in a little more detail:
Conflicts with legislation or “internal” regulations can occur in a myriad of ways, but I would divide them into two major groups. There are “irregularities” of a procedural and material nature.
On procedural errors leading to the invalidity of a resolution of the general meeting: If you wish to challenge a resolution of the general meeting, first check (or ask a lawyer) whether certain procedural rules have been complied with throughout the decision-making process. Here, the investigation must begin with the invitation to the general meeting and end with the details of the resolution.
The most common reasons for procedural invalidity that may lead to an appeal against a resolution of the General Meeting are:
- Irregularity in the delivery of invitations. As a general rule, invitations should be placed in the mailbox. On the other hand, even a co-owner may explicitly request that the invitation be delivered to an address other than the condominium, indicating the exact address. It is equally important that an invitation by e-mail can only be considered as regular service in accordance with the relevant provisions of the SZMSZ.
- The decision was not taken on the item on the agenda. It is also important to emphasize at this point that when discussing the agenda item “other” or “pending cases”, it is not possible to take a valid decision that is “in the public domain” but does not specify its subject matter.
- Indecision. A quorum must exist for all decisions. So if the residents “move away” from the end of the general meeting, the general meeting is often already indecisive at the last points. It is also worth examining the credentials in this area. Their irregularity can also greatly affect the validity of the decision.
- Lack of written information required for the decision. Some decisions can only be made with the right information.
- Serious violations during the conduct of the general meeting. In this context, it should be emphasized that the Protocol is an extremely important means of proof in this respect. If there is a problem with the report, it does not necessarily mean that the decision is invalid, but the probative value may be impaired by the fact of the deficiency.
Regarding the substantive legal errors that justify the challenge of the resolution of the General Meeting: If – presumably – the resolution does not suffer from a procedural error, it is worth investigating the conflict with the law, the memorandum of association or the SZMSZ in the second step. As this can also require a great deal of research, it is worthwhile to seek the help of an expert.
Some reasons for material invalidity:
- Deficiencies in the budget and accounts (non-compliance with the law)
- Grounds for exclusion and conflicts of interest relating to the identity of the common representative
- the limits of the common representative’s contract,
- whether the decision to elect a joint representative was invalid and for how long
- to bear the cost of lining the chimneys in common ownership (according to the decision of the Curia, which was accepted by the majority of the members of the group, it is borne by the co-owner in whose favor the lining is done),
- the cost of replacing the window frames of the attic apartment (a component of the window and therefore borne by the owner of the apartment),
- the creation of the legal relationship between the condominium manager and the joint representative, the content and termination of the legal relationship
3. Examination of the legitimate interests of the minority in contesting the resolution of the general meeting:
Violation of the legitimate interests of a minority is also not a term that can be unambiguously defined or defined. That is why the court examines the fact and characteristics of the damage on a case-by-case basis. The case law has developed the general framework as follows:, the case-law assesses the damage according to the criteria established in other cases with similar subject matter, takes into account the material weight of the damage alleged by the plaintiff, the personal and financial circumstances of the plaintiff, the situation of the other owners of the condominium and the establishing “ (Decision No. 182 of the BiH 2014).
For my part, what I would underline at this point is that legitimate interests must be materially prejudiced in order to declare the resolution of the general meeting invalid. The term ‘substantial grievance’ further expands the possibility of judicial discretion, so that anyone who challenges a decision on that basis should definitely consult an expert beforehand.
It is important to emphasize that only an owner who has attended and voted at the general meeting may invoke a minority interest. The reason for this is reasonable, as we can only consider minority co-owners who are less than voting.
4. What can you do if you have slipped out of the 60-day attack period?
In the event of an appeal against a resolution of the General Meeting, the time limit for appeal is not invalid . You can make good the delay in bringing an action according to the rules of rest in the Civil Code. For example, if you only get the documents needed to start a lawsuit after the date of the general meeting (but these were in the possession of the condominium managers), you have a good chance of challenging the decision within 60 days of handing it over.
It is often the case that a co-owner present at one of the general meetings also wants to see the minutes, the worded resolution in writing and to exercise his / her right of appeal based on it. In such a case, the co-owner in question will normally await notification, even if he or she fails to comply with the 60-day time limit. In such cases, it is good to know that the court may judge each case differently. This is because if someone has taken part in the general meeting and the decision-making process and the decision is easy to understand, the delay is not generally considered to be justifiable. On the other hand, in the case of decisions with complex wording which cannot be memorized and understood after hearing, the late submission of the minutes may already give rise to the submission of an application beyond 60 days.
Some examples of case law on minority harm:
- It is often not established that the minority’s interests are being harmed when the general assembly raises the common cost in order to finance renovation and modernization work (panel insulation, window replacement, etc.).
- References to minority interests are common in any other matters of yard use, yard parking, and use of the property (e.g., operating a bakery or restaurant, operating ventilation equipment, failing to clean, etc.); but the determination of invalidity in each case depends on the circumstances of the case.
- Withdrawal of special benefits previously granted does not constitute a violation of minority interests.
- In the disputes between the owners of more than 51% and the remaining minority, the question of whether the minority has suffered a degree of damage to the interests of the minority that results in the invalidity of the resolution of the General Meeting can be decided only in the light of the facts and grievances revealed.
- In cases of “change of function” of flats and business premises, it can also be judged on the basis of the circumstances of the given case: whether the change of function causes significant and legitimate harm to interests.
5. How can you apply for a declaration of invalidity of a resolution of the general meeting?
The decision of the general meeting can be challenged in court, by means of an action. The defendant in the lawsuit will be the condominium and not the joint representative. The application must be accompanied by a title deed certifying the status of the owner and must be presented with the facts and evidence in support of the action.
6. What happens to the decision until the court decides on its validity?
The court may suspend the execution of the decision. However, this is only an option and not an obligation. It is advisable to list in the application the grounds on which the court suspends the enforcement of the decision. Following an appeal against a resolution of the general meeting, it often takes a long time for a decision to be made on the matter.
7. Does the condominium have any other legal control?
Yes, in addition to challenging the resolution of the general meeting, there is another control of legality, namely the municipal notary. We will report on his role in a separate article later.
We have previously written an article on replacing the common representative. You may also be interested in this. CLICK HERE to read this.
And you can access some of our articles on clarifying the concept of a condominium HERE .
You can access the Condominium Act HERE .
When challenging a resolution of the general meeting, you may want to seek the assistance of a lawyer. Seek the help of an expert attorney to challenge the general meeting resolution by clicking HERE.