Co-ownership split: what are the main stages?
The status of co-ownership applies imperatively to any building or group of buildings used wholly or partly for residential purposes, where ownership is divided by lots between several people. As a result of this imperative nature, a request to split a condominium must necessarily be approved by the general meeting of co-owners (voluntary split) or by the judge (judicial split).
Initially, the aim of co-ownership splits was to facilitate the management of large property complexes. Today, the purposes have become more diverse (independence, creation of a co-ownership without a property manager, lower charges, disagreements, etc.). Law n°2014-366 of March 24, 2014, known as the “Alur Law”, has even enshrined the division of complex property complexes into volumes.
In practice, only the preparation of a sound and comprehensive split-up project can achieve its objective.
Step one: Feasibility assessment
Article 28 I) of the law of July 10, 1965 lays down the conditions for a split. There are three conditions. The building must comprise several buildings, it must be possible to divide up the ownership of the land, and a request must be made to the general meeting for a decision. This request may be made by several co-owners, or by a single co-owner since law n°2000-1208 of December 13, 2000, known as the “SRU law”.
The split may concern buildings comprising lots, or lots comprising the right to build buildings (“transitional lots”). In any case, the building must be capable of being removed to form a separate property, without the need for destructive work to do so.
It must also be possible to divide up the ownership of the land. This presupposes that the applicant for withdrawal is not merely the holder of an exclusive right of use, and that the layout of the buildings makes it possible to divide the initial land base into new, totally independent land units, thus ruling out the situation of an enclave.
Step two: Preparing the application
The general meeting of the initial syndicate decides on the material, legal and financial conditions required for the division, which requires the compilation and presentation of a number of documents demonstrating that all feasibility conditions have been met.
In practice, applicants for withdrawal must contact an expert surveyor and a notary, in order to modify the descriptive statement of division and draw up new co-ownership regulations including the new distribution of tantièmes and charges.
Other documents are also drawn up, such as a plan showing the new co-ownership boundaries and the easements to be provided for after the split, the budget for the split (costs of the various parties involved, tax costs), and the proposed distribution of the receivables and debts of the original syndicate, etc.
This stage is crucial, because if the general meeting gives its approval without the required documents, or if the information provided is insufficient, the decision taken by the meeting will be null and void. Several rulings have already been handed down in this regard.
Step three: Obtaining the vote
If the withdrawal request is initiated by several co-owners, a special meeting must first be convened to obtain a positive decision in principle. The decision must be taken by a majority vote of all co-owners. This meeting cannot physically be held in the presence of a single applicant for withdrawal.
A general meeting must then be convened to obtain a confirmatory vote. There are two options: put the question on the agenda of the annual general meeting, or ask the Syndic to convene a dedicated meeting. The general meeting decides by a majority vote of all co-owners on the request formulated by the special meeting, if applicable.
In either case, the meeting is convened under the ordinary conditions, and if a co-owner’s share of the common areas exceeds half, the number of votes he or she has is reduced to the sum of the votes of the other co-owners (article 22 I) of the law of July 10, 1965).
Step four: Appealing against the decision
If the applicants for withdrawal are unsuccessful, they may contest the decision to refuse withdrawal by taking their case to court within two months of being notified of the minutes of the general meeting. Judicial split-up is provided for under article 29-8 of the law of July 10, 1965 (formerly article 29-4 of the same law). This requires the appointment of a provisional administrator, tasked with drawing up a report containing the elements required for a voluntary split.
Article 29-8 of the aforementioned law refers to a situation in which “the management and normal operation of the co-ownership cannot be re-established in any other way”. Although recourse to this procedure appears to be limited solely to the case of a co-ownership in difficulty, the argument of abuse of majority voting is being developed in case law, in order to obtain the annulment of the resolution refusing withdrawal, as well as damages.
According to case law, “the recognition of an abuse of majority implies that certain co-owners have obtained, through maneuvers, a decision contrary to the collective interests or prejudicial to one or more co-owners. It is up to the person claiming abuse of majority to demonstrate that the resolution was obtained by fraudulent means or with malicious intent, or that it is contrary to the common interest”. (Toulouse Court of Appeal, 1st chamber section 1, March 4, 2019, n°17/00515)
The difficulty lies in the fact that, for the time being, there is no text giving the judge the power to judicially order a split. It is also only in the context of co-ownership undergoing difficulties that the judge can pronounce a volumetric division, hence the need to be assisted by a lawyer from the inception of the split project in order to convince recalcitrant co-owners and select useful arguments before the judge.
Our lawyers will assist you throughout the split-up process. They are at your disposal to answer all your questions and advise you. Our meetings can be held face-to-face or by videoconference. You can make an appointment directly online at www.agn-avocats.com.
AGN AVOCATS – Real Estate Department
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