Section 18 Owners’ Committee resolutions

(1) The decisions adopted by the Owners’ Committee may be challenged in court, in accordance with the terms of the general procedural rules, in the following circumstances:

 

(a) When such resolutions are contrary to the Act or to the Articles.

 

(b) Where they are seriously damaging to the interests of the commonhold and benefit one or several owners.

 

(c) Where cause serious damage to an owner who has no legal obligation to sustain such detriment, or where they have been adopted in abuse of law.

 

(2) Owners who recorded a dissenting vote at the meeting, those who were absent for any reason and those who were improperly deprived of their right to vote shall be entitled to challenge these decisions. In order to challenge a resolution, an owner must have satisfied all commonhold levies or, alternatively, must have paid them into court before proceedings. This provision shall not apply to the challenging of resolutions relating to the alteration of owners’ allocations, as referred in section 9.

 

(3) The action shall lapse three months after the adoption of the decision by the Committee or one year in the case of resolutions contrary to the Act or against the Articles. For owners not present at that meeting, this time limit shall begin to run from the date on which the notice has been received, in pursuance of section 9.

 

(4) Where a decision of the Owners’ Committee is challenged in court, its enforcement shall not be suspended, unless the judge, at the claimant’s request and having heard from the commonhold association, resolves to suspend it as a precautionary measure.

 

 

18.1 Absolute nullity and voidability

 

It must be distinguished between them. Voidability means that the resolution will stand unless it is voided whereas absolute nullity signifies that it was never valid. In terms of commonhold land, as rendered by some decisions of the Supreme Court,SC 02-11-04 07-03-02 and 30-12-05,  resolutions inconsistent with the Act or with the Articles are merely avoidable whereas resolutions against other imperative law, which does not have itself a consequence for non-fulfilment, have no basis in law, thus are absolutely void.

Those resolutions against morals, public order or those passed in fraud of law are also considered absolutely void.

 

Resolutions which are avoidable are cured by lapse of time, ‘one year in the case of resolutions contrary to the Act or against the Articles where they are not challenged; whereas those resolutions deemed as absolutely void have no term limit and they may be always challenged. There is another term of impugnation (three months) for those resolutions laid down in subsection b) and c) of section 18 (1).

 

18.2 Resolutions which are contrary to the Law

 

The general rule of nullity in Spanish Law is established in section 6 (3) and (4) of the Civil Code.

 

(3) ‘Actions against imperative or prohibitory law are absolutely void unless they establish a different effect in case of infringement.’

 

(4) ‘Actions done under the aegis of an Act which pursue a prohibited outcome by law, or contrary to it, shall be deemed exercised in fraud of law and they shall not prevent the due application of the Act which should have applied.

 

Thus, those resolutions against law, morals, public order or in fraud of law are absolutely void. SC 07-03-2002

 

For example, employments contracts against labour law or improvements without planning permission. Likewise, those resolutions adopted without the formal meeting of the Committee are of no effect .The last paragraph of section 16 enables a spontaneous meeting ‘a meeting not called by the president may be legally held provided all owners are present and willing.’

The last paragraph of section 16 enables a spontaneous meeting ‘a meeting not called by the president may be legally held provided all owners are present and willing.’

 

Similarly, those resolutions adopted in excess of the powers of the Committee shall be considered invalid.

 

18.2.1 Resolutions adopted without the majorities required

 

The situations in which a resolution requiring unanimity is passed only by a majority are usually dealt by courts. In these cases, those who voted against may challenge the resolution at court without any deadline in the exercise of their rights.

This benefit of no time limit is not admitted by all the courts.

The Supreme Court ruling 18-04-07 declared that deadlines established in subsection (3) do not apply in case of resolutions contrary to the Law. The CA ruling in Pontevedra 30-06-2006 among others held that those kinds of cases must be included as an assumption of voidability thus subjects to the limit of one year established in subsection (3).

 

18.2.2 Resolutions passed in a meeting in which any of the owners have not been legally summoned

 

They could be also declared null and with no effect.

 

18.3 Resolutions which are contrary to the Act or to the Articles

 

Those resolutions adopted in the meeting in which requirements established in the Act are not met could be deemed as avoidable. There is a doctrinal dispute here, however in general such resolutions could be deemed as avoidable

 

For instance

 

• where the required quorum is not met,

• where the resolution was not included on the agenda. CA in Malaga 24-04-01

• where owners have been deprived unfairly of their votes

• where notices calling for a meeting have not been served on all the commonholders

• where defaulting owners have voted. CA in Toledo 25-10-01

 

The CA in Huesca ruling 23-10-02 held that a resolution was null and void since it set service charges in a different way that it was established in the title.

 

18.4 Resolutions which are seriously damaging to the interests of the commonhold and benefit one or several owners

 

There are not many resolutions included in the first assumption because it is unlikely that an Owners’ Committee will pass a resolution which is detrimental to the general interest of the commonhold.

 

18.5 Resolutions seriously detrimental

 

As was stated by the CA ruling in la Rioja 24-09-2002 ‘seriously detrimental’ is a wide concept often confused with abuse of law.

 

18.6 Resolutions adopted in abuse of law

 

18.6.1 Abuse of law requirements

 

There is an abuse of right when the exploitation of an individual right injuriously affects the interests of anyone.

 

These interests must not be protected by any law and the exercise must be antisocial or immoral.

The ‘abuse of right’ principle is a simple concept. In appropriate circumstances, a court can, and should, prevent a person from ‘abusing’ rights by seeking to take advantage of them in circumstances in which they were not intended to be available to him. In these cases, the owner is seeking to exercise the right unreasonably to derive, to the detriment of others, an improper advantage, manifestly contrary to the objective pursued by the legislator in conferring that particular right on the individual.

The Court of Appeal in Ourense 29-07-05 held that the disagreement of only one owner in a resolution adopting alteration on the façade was abuse of law because he was unreasonably withholding his consent.

The Court of Appeal in Alicante 06-04-92 and 20-07-00 ruled in a similar case that due to the low importance of the alteration proposed which was also an improvement it was applied the doctrine of abuse of right. In Navarra 26-07-05 the CA rendered the opposition of an owner ineffective because he did not allege any rational ground for his opposition.

The Court of Appeal in Cadiz 06-05-02 considered as an abuse in law a resolution passed by the Committee in which, after 12 years of tacit consent the OC tried to invalidate the joint between a residential property and a premises.

The Court of Appeal in Leon 25-01-02 declared null and void a resolution of a commonhold refusing enforcement of a judgement ruled against the commonhold.

The Court of Appeal in Segovia 20-12-01 held that refusal to install an air exit for the use of premises was an abuse in law because there was a similar exit granted to another premises.

The Court of Appeal in Alicante 07-11-01 stated as abuse of law a resolution which refused a request for the installation of a satellite dish because there were more dishes installed. In what is intended as an effort to protect commonhold aesthetics, many Articles contain restrictions limiting or prohibiting satellite dishes.

Imposition of an unfair distribution of expense is also considered voidable, as well as the refusal to authorize installation of an emergency exit where regulations make it an obligation to do so. CA ruling in Madrid 10-11-2004 CA ruling in Toledo 22-05-2006

 

18.6.2 Entitlement to challenge

 

Those who attended meeting and voted unanimously cannot challenge and those who voted in favour are not entitled to challenge a resolution subsequent to the meeting.  CA ruling in Corunna 16-11-2006 CA ruling in Madrid 29-09-2005 and CA ruling in Saragossa 01-12-2004.

 

In case of unanimous resolutions which are contrary to the Law, it is obvious that only a third party, for example a non-owner, would be entitled to oppose resolutions at court.

Problems arise because courts do not enable third parties to challenge these resolutions. CA ruling in Madrid 17-11-2005 and CA ruling in Asturias 28-05-2003

Taking the technical point, it must be divided from those present to those who were absent from the meeting.

 

i. Where a commonholder is present at the meeting and wants to contest a resolution, he must record a dissenting vote otherwise he cannot challenge later at court. CA ruling in Las Palmas 10-02-2006

If his vote is qualified as an abstention, the Court of Appeal in Salamanca 15-04-02 and the CA ruling in Cadiz 21-06-2007 held that all those who abstained at the meeting are not entitled to challenge resolutions later.

On the contrary, the CA ruling in Navarra 13-10-2000 and the CA ruling in Teruel 16-10-2004 ruled that absents could challenge despite of their abstentions.

Some courts require not only the recording of his vote against but his express opposition to the resolution others hold that it is enough to vote against. CA ruling in Madrid 18-12-2007 and 27-06-2005 CA ruling in Asturias 29-12-2006 CA ruling in Asturias 12-07-2007 and CA ruling in Alicante 27-09-2006

According to the general principle of ‘own actions’; nobody may act against his own actions. Therefore, if at the meeting opposition is not expressed and recorded, it will not be subsequently possible to go to court in order to challenge decisions.

Prospective applicants must request the secretary record their opposition to the resolution be adopted in the minutes. CA ruling Madrid 22-02-05 or Court of appeal in Seville 08-10-04

 

ii. For those absent at the meeting, the Act provides an opportunity to appeal against resolutions adopted once they have been noticed under section 19 (3).

There is no agreement between courts on whether a new owner is entitled to challenge resolutions passed before his purchase. In favour CA ruling in Almeria 06-07-2004, against CA ruling in Guipuzcoa 25-05-2003

In regard of tenants who want to challenge, courts are not in agreement, some of them holding their entitlement to do so , others holding the opposite approach.  CA ruling in Barcelona 20-10-2004 CA ruling in Pontevedra 11-02-2000

 

18.7 Terms

 

In case of an absent owner wanted to contest any resolution adopted by unanimous vote at court, it is compulsory to state his ‘dissent to the person acting as secretary within thirty calendar days, by any means ensuring record of delivery under subsection 17 (1).

For the resolutions adopted through those majorities established in subsections (2) (3) and (4) of section 17, it will not be compulsory that the claimant states dissent.  CA ruling in Madrid 16-01-2008

On the contrary, for unanimous resolutions specified in subsection (1) of section 17, those which require unanimous consent, it is compulsory to dissent within 30 days . CA ruling in Madrid 15-10-2007 and CA ruling in Zaragoza 08-02-2007

Recently, a controversial judgement dictated by the Supreme Court considered such dissent compulsory only in those cases in which the objection is based on lack of unanimity. SC 16-12-2008

 

Where the unit-holder does not state his dissent the resolution shall be deemed as unanimously passed under section 17 (1). CA ruling in Vizcaya 27-10-2006

The act sets out two different terms depending on the nature of the resolution; one year for ‘resolutions contrary to the Act or against the Articles’ (sub. a) and three months for the rest of resolutions (sub. b) and (sub. c).

They must begin legal proceedings in these timeframes. As was stated by the Supreme Court in its ruling of 22-12-2008 the term counted from the time in which the resolution is recognized.

 

One year term

 

Examples of resolutions included in the one year term

• Defective notices of meetings.CA ruling in Valencia 26-09-2006

• Infringement of the unanimity requirements. CA ruling in Granada 07-07-2006

• Lack of notice of a meeting to a commonholder. CA ruling in Burgos 27-06-2006

• Distribution system of expense. CA ruling in Zaragoza 18-09-2003

 

Three months term

 

• Resolutions approving the debt settlement under section 21 (2). CA ruling in Madrid 22-09-2006

• Resolutions denying installation of air conditioning units.

 

In the case of absents the term begins when the commonholder receives the meeting’s minutes , under provisions laid down in subsection (h) of section 9 (1).

Where they do not receive the minutes, the term shall apply if they were aware through other means , otherwise there is no deadline.

SC 10-11-2004 CA ruling in Alicante 16-10-2001

The commonhold has to prove the date on which the notice was received if it is alleged the time limits have lapsed. CA ruling in Asturias 25-05-2006 and CA ruling in Valencia 10-10-2005

Where the owner attended at the meeting, the term starts at meeting’s date.

 

18.8 Being up-to-date

 

In order to challenge all kind of resolutions, commonholders must be up to date with the service charges of the commonhold.  CA ruling in Barcelona 12-06-2007 and CA ruling in Vizcaya 27-10-2006 CA ruling in Asturias 29-12-2006

 

Defaulting owners who were not deprived of their voting rights at the meeting may challenge resolutions adopted , although most of the courts hold a contrary approach in this respect . CA ruling in Asturias 29-12-2006 CA ruling in Tarragona 15-06-2004 CA ruling in Barcelona 08-10-2004

Only where the resolution is related to his debt or about distribution of expenses a commonholder is entitled to contest in spite of not being up-to-date. CA ruling in Madrid 10-11-2004 CA ruling in Zaragoza 14-03-2006

However cf the contrary approach was held by the CA ruling in Madrid 26-12-2002.

Where a defaulting owner wants to challenge, he may pay his outstanding debts into court before bringing a lawsuit challenging a resolution. CA ruling in Málaga 27-05-2005

 

18.9 Revocation of resolutions

 

As a general rule to revoke a resolution, it shall be necessary the same majority as required for its approval. SC 19-05-2006 CA ruling in Madrid 10-10-2006 CA ruling in Zaragoza 24-02-2004

 

There are some limits in revocation based on the rules of good faith provided in section 7 (1) of the Civil Code.

Applying the maxim that ‘no one could stand against his own previous acts’ commonhold is not entitled to revoke those resolutions previously passed if this revocation is against any commonholder’s concretely acquired rights CA ruling in Madrid 04-06-2007  ; whereas, it would be valid to revoke resolutions which affects to all the commonholders considered as a whole. CA ruling in León 21-01-2005

It is not lawful to revoke later, resolutions in which was granted permission for works. CA ruling in Madrid 12-11-2001

Therefore the rule is that it is according to the law to revoke those resolutions in which the rights of any of the unit-holders are not affected.  CA ruling in León 01-02-2007 CA ruling in Seville 19-03-2004

 

It is also permitted to suspend passed resolutions. CA ruling in Zaragoza 03-06-2002