The Supreme Court recently ruled on the question of whether the court should have been allowed to rule on applications to set aside an association resolution and to grant substitute authorisation to amend the division deed without summoning all flat owners.

What was at stake here?

This case involved a dispute between owners of flat rights in an apartment complex. The three owners of the flats on the top floor wanted to extend their flat with a superstructure with an associated terrace on the roof of the complex. The owner of the business premises on the ground floor wanted to split the business premises into five separate flat rights. An absolute majority of votes at the meeting of the CoE had given permission for the realisation of these plans, but the required amendment of the subdivision deed did not obtain the required 80% of votes.

The proceedings before the subdistrict court

The three owners of the flats on the top floor and the owner of the business premises on the ground floor then requested the subdistrict court to grant a substitute authorisation (Section 5:140(1) of the Civil Code) to amend the subdivision deed. The owners of four other flats opposed this and they requested the subdistrict court to annul the VvE resolution under Art 5:130 of the Civil Code. Other flat owners were members of the VvE, but they were not involved in the proceedings.

The subdistrict court granted the substitute authorisation, rejecting the request to annul the VvE resolution.

Appeal

On appeal, the court of appeal set aside the order of the subdistrict court, annulled the VvE resolution and rejected the request for granting a substitute authorisation to amend the subdivision deed.

To this end, the court considered, among other things, the following:

"After the hearing, it appeared to the Court of Appeal that the [other flat owners], although invited through the aforementioned lawyers as “interested parties” to be present at the oral hearing, had not been summoned “by name”, contrary to the provisions of Sections 5:130(3) and 5:140(4) of the Civil Code. The court of appeal will return to this later in this judgment.

(…)

The court of appeal is aware that [the other flat owners] were erroneously not summoned ‘by name’ to be heard on the requests of the proponents and naysayers (to issue a substitute authorisation, respectively to nullify the VvE resolution). The minutes of the VvE meeting held on 28 February 2022 show that they both agreed to the resolutions at that time. However, the cooperation shown by these flat owners, who incidentally did not join the requested court authorisation as co-applicants, cannot lead the court to the opinion that the naysayers refused to cooperate with the proposed amendments to the division deed without reasonable cause. Referring to what has been considered above, the court of appeal is of the opinion that the interest of the naysayers outweighs this in any case. Since the situation existing between the flat right owners remains unchanged by the court's opinion, the court sees no reason to hear the two flat right owners‘ requests as yet.’

Judgment of the Supreme Court

It was complained in cassation that the court of appeal had failed to recognise that it should not have judged and decided without summoning the other flat owners to be heard on the requests. This cannot be altered by the court's considerations that the cooperation shown by the other flat owners cannot lead the court to the opinion that the naysayers refused, without reasonable cause, to cooperate with the proposed amendments to the division deed, that the court is of the opinion that the interest of the naysayers outweighs the interest of the flat owners in any case, and that the situation existing between the flat owners remains unchanged by the court's judgment, the complaint said.

According to the Supreme Court, the application to set aside the VvE resolution concerns the determination of rights and obligations of the flat owners, and the decision on that application binds them all. The same applies to the request for granting the substitute authorisation for the purpose of amending the subdivision deed, and the decision to be made thereon. This means, according to the Supreme Court, that the court can only decide on these requests in proceedings involving all flat owners. Accordingly, Article 5:130(3) of the Civil Code prescribes, inter alia, that all persons entitled to vote (including, in principle, all flat owners) are to be summoned by name to be heard on a request for nullification, and Article 5:140(4) of the Civil Code in conjunction with Article 5:139(1) of the Civil Code prescribes that all flat owners are to be summoned by name to be heard on a request for the granting of a substitute authorisation. For the cases addressed therein, these regulations give expression to the principle of hearing and argument contained in Article 6 ECHR and Article 19 Rv. The court must ensure ex officio that these regulations are complied with.

Conclusion

It follows from the foregoing that the complaint succeeded. The court should not have decided on the applications without first summoning the other flat owners to be heard on those applications. This could not alter the fact that with the court's decision to refuse the substitute authorisation and annul the VvE resolution, the existing factual situation remained unchanged.

Would you like to know more or do you have questions about your position as flat owner? If so, please feel free to contact one of our lawyers without any obligation. We will be happy to assist you!