OWNERSHIP OF SEPARATE PARTS OF REAL PROPERTY
CO-OWNERSHIP AND MANAGEMENT OF THE PROPERTY
Based on the Act on Ownership and Other Real Rights (hereinafter: ZV), each co-owner has the right to participate in decision-making regarding everything that is co-owned (management of the property) together with other co-owners. Decision-making depend on a regular or exceptional management.
In order to understand the subject, for start it’s important to explain the difference between regular and exceptional management. Namely, when a decision is made regarding regular management, it is sufficient for the decision to be made by co-owners whose co-owned parts make up more than half the value of all the special parts of the real property. In matters of exceptional management, decisions are made solely by the consent of all co-owners.
Regular and exceptional management stipulated by the law are to be considered non exhaustive.
CO-OWNER RIGHTS AND OBLIGATIONS
In accordance with Art. 85 (4) of the ZV, co-owners of real property in which one or more of the co-owned parts are established as a separate part of the real property (tenant ownership), are obliged to:
- participate in real estate management,
- determine a person who will perform the duties of a building manager and
- establish a joint reserve.
Therefore are all co-owners obliged to pay the reserve and to appoint a building manager who will manage the building in the name of the co-owners. These obligations are binding by the law and can’t be avoided.
Management of the real property – co-ownership agreement and appointment of the building manager
All decisions to undertake regular management and exceptional management must be made by the co-owners in written. It is advised to elaborate duties of the co-owners regarding the management and usage of the building in the co-ownership agreement.
Co-ownership agreement is an agreement by which several matters are regulated: co-ownership shares, terms and conditions of the real property management, data about the person who manages the property, definition of the perimeters of his duties, responsibility for the management, terms for collecting and managing the joint reserve, tenant’s representative and the limits on his powers, terms and conditions of usage of joint areas including a flat for the tenant’s representative as well as the installations and the land that are part of a property.
The co-ownership agreement is valid only if it’s signed by a majority of the co-owners whose co-owned parts make up more than half the value of all the special parts of the real estate. The provisions of the co-ownership agreement are binding for those who acquire co-owned parts after the conclusion of the co-ownership agreement.
Besides co-ownership agreement the law stipulates a building management agreement which is concluded with a building manager as well as agreement on joint parts which regulates the management and usage of the joint installations and parts of the building. The co-owners were obliged to conclude the above mentioned agreements within 12 months after the entry into force of the Act on Ownership and Other Real Rights.
Therefore, in case when the co-owners didn’t keep up with the obligation to set up a building management, the local authority is authorised to appoint a constraint manager who will manage the real property. A constraint manager will be deprived of his duty only if the co-owners appoint a building manager in written and conclude a building management agreement with a building manager.
Regarding the obligation to manage the real property, the law stipulates that the co-owners may agree to authorise one person as a building manager who will act as their authorized representative. For a manager, one or more co-owners can be elected, or it may be entrusted to another person having legal capacity or to legal person who is registered to manage this business.
Appointment of the building manager and definition of the perimeters of his duties is a matter of exceptional management. They can therefore be made only by the consent of all co-owners of the building. In case that co-owners can’t agree on this matter, pursuant to Art. 88 of the ZV, each of them may file a lawsuit and require that a decision on appointment of the building manager and his duties is made in court proceedings by the court.