New reform of co-ownership

The autumn of 2022 will not be the quietest period for Monegasque co-ownerships and their syndicates.

Law no. 1.531 of 29 July 2022 made substantial changes to the provisions of Law no. 1.329 of 8 January 2007, relating to co-ownership of built-up properties. The aim of this new law is to mainly to resolve, after consultation with the Chambre Immobilière Monégasque and the Principality's Notaries, the deadlock situations encountered in the administration of co-ownerships and the difficulties linked to the operation of general meetings but also, to bring new things to the table. Certain provisions have therefore been introduced to guarantee the proper functioning of small co-ownerships, but Law no. 1.531 has a much wider impact that must be considered by all Monegasque co-ownerships and property managers.

First of all, the new law will be of great interest to co-owners wishing to carry out elevation, scouring or construction work aiming to create new private premises, as the majority rules for such decisions at the general meeting of co-owners have become more flexible. These matters are now subject to the majority of article 16 of Law no. 1.329 (majority of the co-owners representing at least two-thirds of the votes of the co-owners presents or represented) - and no longer to unanimity. However, this only applies if the work is not carried out by the condominium syndicate.

In addition, Law no. 1.531 clarifies the notion of common areas by distinguishing general common areas (undivided property of all the co-owners), special common areas (undivided property of certain co-owners) and common parts for exclusive use.

It should be noted that, for the latter two categories of common areas to be recognized, this must be expressly specified in the condominium rules. Similarly, the payment of charges relating to common areas for exclusive use may be charged to the only co-owner concerned, if this is specified in the condominium rules.

It also stated that, in the absence of a provision to the contrary, the right to raise the building, to scour the ground, to erect new buildings in the common courtyards and gardens, the joint ownership or the building right on the common areas are deemed to be ancillary to the common areas.

Law no. 1.531 also adds an obligation for co-owners (even non-occupiers) and condominium syndicates to insure themselves against civil liability risks with an insurance company approved in the Principality of Monaco.

Regarding the preparation and functioning of general meetings of co-owners, the new law introduces useful details to which property managers must pay the greatest attention, especially as most of these provisions are mandatory.

Law no. 1.531 introduces a deadline for co-owners to notify tjeir questions to the property manager for their inclusion in the agenda of the next general meeting. This notification must now be sent at the latest 10 days before the sending of the invitation to the next assembly by the property manager and received by the latter before sending the invitation. The introduction of these deadlines is intended to avoid penalizing the sending of questions from abroad.

Moreover, although practically this is already often the case, it is now stipulated that the invitation to the general meeting of co-owners must be accompanied by the estimates relating to certain works and expenses included in the agenda, the cost of which exceeds an amount to be set by ministerial order.

Finally, the time limit for the property manager to send the minutes of the general meeting to the co-owners is reduced to one month, while the time limit of two months for contesting decisions taken at the general meeting of co-owners has been maintained.

Regarding small condominiums, Law no. 1.531 introduces a chapter III devoted to the condominium syndicates where the number of votes is divided between two co-owners. To avoid deadlock situations, it is provided that decisions requiring a majority of the votes cast by the co-owners present or represented under Article 15 as well as the appointment of the property manager may be taken by the co-owner holding more than half of the votes. Furthermore, in the absence of a professional property manager, the two co-owners composing the condominium syndicate may meet without invitation and make any decision.

The Law no. 1.531 also takes a step forward towards the digitalization of the administration of condominiums and the functioning of general meetings. The transmission of documents on the occasion of the invitation to the general meeting of co-owners (estimates, accounting records, etc.) may now be carried out by the property manager via a link to a secure online space. Ministerial decrees are to be issued to specify these provisions.

However, this is only a simple option for the property managers, and the co-owners may oppose this dematerialization at the general meeting by a majority of the votes cast by the co-owners present or represented.

Furthermore, although the law does not specify it, the Commission au logement (the Housing Commission) has observed that the record keeping and management of documents could be ensured by means of electronic archiving services or digital safe such as those enshrined in Law no. 1.383 of 2 August 2011 for a Digital Principality.

Although co-ownership is gradually becoming digital, it was not considered desirable - considering the customs and specificities of the Principality - to provide for the introduction of videoconferencing or an equivalent within the framework of Law no. 1.531, which would have allowed to organize general meetings remotely, as it is the case in France.

Other details concerning the establishment of easements, the powers of the condominium syndicate, the appointment of the chairman of the general meeting, or the obligation for the property manager to keep the documentation of the building, are provided by Law no. 1.531.

In view of the mandatory nature of most of the provisions of the amended Law no. 1.329 and the significant impact of some of the new provisions introduced by Law no. 1.531 may have on the condominium rules and on the operation of the general  meetings of co-owners, it appears imperative that each co-owner, condominium syndicate or property manager be aware of the new provisions that are immediately applicable in the Principality.