Who is liable? The property manager or the VME?

Many property managers know this situation: an item is placed on the agenda of the upcoming General Assembly regarding a new regulation or legally mandated modernisation work. What if the GA votes against it and the required majority is not reached? What if due to the composition of the GA a deadlock arises and a "yes" vote becomes impossible?

Is the General Assembly above the law?

When the owner of a single-family home chooses not to comply with the law, they risk a fine. They are certainly not acting as a responsible homeowner, but it is their choice, their freedom. Ultimately, they alone bear the responsibility and pay any associated fines.

But when a VME chooses during the GA not to comply with the law, the property manager, who according to their legal duties "must execute the decisions of the GA", is forced in their capacity as administrator to involuntarily not respect a certain legal obligation. The property manager then finds themselves in a precarious position, as they can be blamed by new co-owners for not having respected the law. Not to mention possible disciplinary proceedings that can relate to old facts without limitation.

Furthermore, assuming the property manager (outside the decision taken by the GA) would take the initiative to comply with the law anyway, what about the fundraising to implement a measure that was not voted on by the GA? Logically, without the necessary funds, no work will be carried out. And even if the money were in the account or reserve fund, how can the property manager justify spending funds on legally mandated works that were not approved by the GA?

The property manager thus risks losing the management of the VME in question, which represents a financial risk through the loss of income for their office.

Ultimately, we ask ourselves: why would the GA be the mechanism that is superior to the law, the mechanism that, through a regulatory vote, may vote against the application of a law that by definition must always be respected?

The VME puts the property manager in an unlivable situation. Worse still, it confronts them with an unsolvable dilemma. Ultimately, the property manager can never do right: if they follow the GA, they will violate the law and professional ethics; if they don't follow the GA, they will violate not only the co-ownership law but also their contractual obligation to comply with GA decisions.

Who is the real building manager: the property manager or the VME?

Some argue that the property manager is not really the building manager, but is only mandated by the General Assembly to execute its decisions: therefore they would manage the General Assembly, not the building.

If we also take into account the recent evolution of the property manager's tasks in practice, we notice a new trend towards communication, management of internal conflicts within the VME, and management of conflicts between and with co-owners.

Ultimately, we can ask ourselves the legitimate question whether the property manager actually manages the building or rather the co-owners. After all, it is the latter who dictate at the general assembly how the property manager's mandate should be executed on all points, even on points where the law already applies.

Majority for legally mandated works?

Would the VME possess a special status that would allow it to vote against a legal obligation? No, the answer is, the law is equal for everyone, and everyone is expected to know and respect the law. Moreover, the Co-ownership Law has a special status because it is mandatory law (Art. 3.100 NBW).

But then why does the law provide for an absolute majority (1/2 + 1) for legally mandated works?

What are we actually talking about? An item on the GA agenda regarding a legal obligation that ultimately must be voted on to decide whether the VME will comply with this obligation or not? This incorrect interpretation occurs frequently but remains totally unacceptable.

Are we going to recommend that property managers use a two-thirds majority for lift modernisation as part of works on common parts? Or are we going to recommend an absolute majority, since this is legally mandated work?

The same applies to the mandatory energy performance certificate in Flanders (EPC common parts), or the upcoming asbestos inventory. Does the property manager really need to put this on the agenda when the law provides for a mandatory EPC for common parts since 2022?

The same for fire safety: should co-owners really be asked to decide how many fire extinguishers or which pictograms they want to install? Or should the property manager have the legally prescribed number of extinguishers installed? Can the local fire brigade's requirements be ignored?

The same for registration with the KBO: this registration costs approximately €90 in 2022. All too often, co-owners ask the property manager not to carry out this registration.

Additionally, GA members sometimes impose surprising decisions on the property manager, decisions which they can only resist with moderate success. For example: refusal to appoint an auditor, refusal to appoint a GA chairman, refusal to coordinate the statutes, refusal to carry out roof insulation, refusal to start a GDPR file, and so on.

Who is and remains liable?

The Co-ownership Law is clear: the property manager is solely liable for their management (Art. 3.89-§6 NBW). They also have the obligation to properly inform the members of the General Assembly.

But what if, for example, in executing a GA decision there are insufficient fire extinguishers in the building, or what about the worn or defective smoke dome that was not repaired in time? In the event of damage, everyone can easily imagine that the liability situation will end in an endless legal tangle.

In the case of administrative or civil proceedings, the VME may be held liable, but it will automatically turn against its property manager. The latter can only present their minutes as evidence of the GA's vote against compliance with the relevant legislation.

Complete deadlock!

We must also consider situations where the "reduction" of article 3.87-§7 NBW is applied: "No one may participate in the vote, not even as principal or agent, for a greater number of votes than the total votes held by the other present or represented co-owners."

In practice, this rule immediately creates two parties with equal votes. In this way, without consensus, an absolute majority is unachievable. The property manager thus becomes the victim of both an inefficient legal provision and internal disagreements between co-owners. But who is liable for not respecting the law?

Legislative amendment?

Once again, we must unfortunately note that the Co-ownership Law is unclear. We must regrettably conclude that a lack of clarity gives rise to various interpretations, which even becomes a source of conflicts, resulting in costly and endless proceedings for the parties involved. We find it hard to imagine that this was the legislator's intention.

A legislative amendment seems appropriate. We therefore launch an appeal to our colleagues, lawyers, and academics to further reflect on this issue.

In our opinion, it would be appropriate to legally authorise the property manager to automatically comply with all legal obligations, with only a GA vote (or VME written decision) on the choice of contractor/service provider and their respective price quotes. One could, for example, consider a legal obligation or new technical standard as one of the urgent tasks of the property manager, such as acts of preservation.

Would it not also be meaningful to include a liability clause for the VME in the co-ownership law in case of such a vote? And would it not be wise, in the context of legally mandated works, to state that the absolute majority vote only relates to the choice of contractors/quotes?

Our profession remains versatile.

Questions or need support?

Feel free to ask your further questions to the management team of property manager SEBAS, we are happy to help.

Source: https://www.propertytoday.be/blog/artikels-1/wie-is-aansprakelijk-de-syndicus-of-de-vme-de-paradox-van-artikel-3-89-ss6-33