Neighbourhood conflicts concerning the use and management of the common part of the property can be a real nightmare for residents. They frequently escalate in multi-use buildings where, apart from residential space, there are also offices or retail premises. In such conditions, even the common car-park may easily become a source of dispute. That is why it is recommended that the rules governing enjoyment of common parts of properties be clearly determined by their co-owners. Such rules can most often be found in the contract of sale of an apartment, they are also published in the land register. However, it is often not enough to inspect land registers to learn the rules on management of the common part of the property, and the relevant provisions of notarial deeds are not conclusive in this respect.
Developer versus co-owners
Recently an interesting decision in that matter was adopted in a dispute between a condominium and developer for the possession of parking places (judgment of the Court of Appeal in Warsaw of 10 July 2017, file reference VI ACa 490/16). In 2005, a developer erected a residential-tertiary-office-retail building in which a car park was arranged. Then, the developer separated and sold subsequent apartments. Naturally, the ownership title covered a share in the common property, and, on the sale of their apartments, buyers were notified of the developer’s exclusive and indivisible right to use the car-park and the provisions of the Civil Code on the consequences of legal acts in respect of management over the common property which applied to acquirers of such shares (Arts. 199 and 221 of the Civil Code). The above meant that a practically unlimited power to dispose of the parking places was vested in the developer. At the same time, as an owner of non-separated independent housing premises, the developer became a member of the condominium. The conflict started when the owner of the building let the largest commercial premises to state agencies, allowing the latter, at the same time, to use 39 parking places. They were soon taken up by employees and visitors of those state agencies.
In July 2010, apartment owners – members of the condominium – adopted a resolution in which they changed the use of the common property. The residents decided to do away with the previous parking places and create new ones, intended to be let by the condominium. The resolution authorized the management of the condominium to establish a pricelist for the lease and to conclude respective agreements. The developer brought an action for the repeal of the resolution, however, the courts of all instances concluded that the resolution effectively changed the method of management of the common part of the property.
Can a deed be amended by resolution of a condominium?
The developer derived his right to manage the car-park from the provisions of the first deed of sale of an apartment, which at the same time specified the use of the common part of the property. These rules were published in the land register, which allowed the developer to enjoy the parking places to the exclusion of the remaining owners. However, the courts which handled the case held that co-owners may change the use of the common property by adopting a resolution under the Apartment Ownership Act. According to Art. 22(3) item 4 of that Act, a change of use of the common property is an act outside the ordinary scope of management and, as such, requires consent from the owners in the form of a resolution, which was indeed passed in the discussed case. The Act does not require that the resolution be unanimous, and even a co-owner to whom certain privileges were granted may be outvoted by his or her neighbours. In the case at hand, courts found that the resolution changing the use of a part of the common property superseded the prior agreement on the division of the property.
However, it is highly important from the practical point of view that the land register still included the entry defining the use of the common property as set out in the provisions of the notarial deed. It was backed by the presumptions following from the principle of public credibility of land registers. Despite the above, the Court of Appeal did not share the appellant’s views and held that such presumption is rebuttable. This means that in legal proceedings evidence may be produced in support of the thesis that the use of a property as set out in the deed no longer applies. At the same time, the Court concluded that the presumption could be rebutted in the discussed proceedings without a suit being filed for the declaration of inconsistence of the entry in the land register with the actual legal situation. In such instances, the fact of rebutting the presumption will not affect any third parties but only the parties to the proceedings.
In the first place, the Court of Appeal Concluded that a resolution of the condominium may change the rules governing the management of the common property as defined in the notarial deed of sale. For apartment buyers, this means that in order to learn the method of management of the common parts in a given property it is not enough to merely inspect the land register. It is also necessary to become acquainted with resolutions applicable in the condominium. Additionally, the judgment gives an important signal to developers who, along with the separation and sale of subsequent apartments, lose their privileged position to the emerging condominium.