The co-ownership coefficient and common expenses: equity or subsidy?

Law 675 of 2001, which regulates the horizontal property regime in Colombia, stipulated the system of co-ownership coefficients as a mechanism to determine the participation of the co-owners in decision-making, their contribution to the common expenses and their rights and obligations with respect to the common areas. The co-ownership coefficient is calculated, in principle, according to the private area constructed with respect to the total private area of the building. However, this criterion of participation in the co-ownership may be inequitable since the law assigns higher patrimonial effects in relation to the common expenses to the co-owners who own properties with greater private area, without the direct consideration being the greater or better right in the use and enjoyment of such properties. For its part, the Constitutional Court 1 Corte Constitucional. Sentencia C 782 del 2004. (M.P. Rodrigo Uprimy Yepes: August 18th 2004). endorsed this formula by virtue of the legislative configuration principle. Therefore, the current regime of co-ownership coefficients may be interpreted as inequitable since: (i) the owners of properties with a larger area subsidize the owners with property of smaller area and (ii) the owners of properties with a larger private area assume higher costs on the common expenses without receiving in exchange a better or greater right on the use and enjoyment of the same.

For this reason, the Constitutional Court has developed a series of jurisprudential arguments to justify the legislator's decision to determine the co-ownership coefficients as a criterion for the distribution of expenses and common expenses of the buildings, which are explained below.  

Based on the principle of law according to which the accessory follows the fate of the principal, in judgment C-782 of 2004 this Court established how the contributions to the maintenance of the common property are based on the characteristics of the private properties, like the figure of the co-ownership coefficient, which is precisely calculated as a portion between the private area and the total area of the building or complex. And in this line of ideas, this Corporation argued that "the right over the common property is measured according to the coefficient of co-ownership". However, this criterion is inequitable, since the right to use the common property is not granted proportionally to the coefficient of co-ownership, since all co-owners, regardless of the area of their private property, have, in principle, the right to use it in the same proportions.  

The Corporation in the same sentence held that Law 675 adopted a criterion of solidarity, equity, and proportionality to determine the co-ownership coefficient by virtue of the area that each property represents in relation to the total area of the building. This would seem to indicate that the owners of private property with greater area have a greater right to the usage and enjoyment of the property and, therefore, must bear a higher burden in relation to such expenses, which, as it has been repeated, does not correspond to the reality of the co-ownerships, since the owners of private property do not have better or greater rights of use in accordance with their private area.  

The Court, in turn, argued that such formula of co-ownership coefficients contributes to the practicality and efficiency of the administrative management of the common expenses. In this respect, although the mechanism adopted is practical, it does not seem to be sufficient argument to ignore the retributive, equitable and equality criteria that are sacrificed in this way. It would have to be seen whether it would have been more practical to let the co-owners determine their own mechanism in their own horizontal property regulations.

In its analysis of the property coefficients, the Court ruled out two equally valid criteria. First, the retributive criterion according to which the owners must contribute to the common expenses in proportion to the benefit they receive and, second, the criterion of equality in the understanding that equal rights equal obligations.

However, in the decision, the Court did not ignore the discussion that succinctly summarizes that formula and recognized that: "it is true that the Legislator could also have, within certain limits, resorted to other criteria to distribute the common expenses, since the Congress enjoys broad freedom of configuration in this matter". The foregoing allows concluding that the legislator opted for an egalitarian position regarding the use and enjoyment of the common goods of general use, but disproportionate for the purpose of determining the contribution of the common expenses.

In conclusion, although the mechanism chosen by the legislator in Law 675 of 2001 in relation to the co-ownership coefficients is based on the principle of solidarity, equity and proportionality and has been defended by the Constitutional Court under the principle of freedom of legislative configuration, in practice it is not easy to find such basis since, as illustrated in this article, it ignores the principle of retribution and is inequitable. Generating a sort of subsidy by the owners of larger private areas. We hope that this debate will have greater preponderance in future discussions of reform of the horizontal property regime in which alternative mechanisms to the current one is explored that in effect respond to the criteria of equity and retribution and likewise, the Constitutional Court will rethink its position in this regard, which will allow finding a fairer formula in relation to the common expenses.