Covid-19 | Measures for adapting the rules relating to co-ownership syndicate contracts, mandates of members of union councils and general meetings of co-owners

Ordinance No. 2020-1400 directly modifies the text of Ordinance No. 2020-304 of 25 March 2020, which had been issued at the time of the first lockdown and successively modified by Ordinance No. 2020-460 of 22 April 2020 and by Ordinance No. 2020-595 of 20 May 2020, in order to complete, adjust or extend some of its provisions (the “Co-ownership Ordinance”).

Its purpose is to adapt, in view of the state of public health emergency, the rules applicable to certain co-ownership syndicate contracts, to certain mandates entrusted to members of the syndicate council and to the general meetings of co-owners that were to be held during the Covid-19 epidemic period, and thus to ensure the continuity in the management of co-ownerships during the public health crisis.

The Co-ownership Ordinance also adapts the rules applicable to courts of law ruling in non-criminal matters (this part of the Ordinance is explained here).

FATE OF CO-OWNERSHIP SYNDICATE CONTRACTS

The Co-ownership Ordinance provides that co-ownership syndicate contracts that expire or expired between 29 October 2020 and 31 December 2020 inclusive “shall be renewed under the same terms until the new contract of the syndicate appointed by the next general meeting of the co-owners takes effect”.

The Co-ownership Ordinance thus derogates in particular from the principle according to which the co-ownership syndicate contract is a fixed-term contract, not subject to tacit renewal to allow its “automatic renewal” if it has expired or will expire between 29 October 2020 and 31 December 2020 inclusive, without the general meeting of the co-owners having been able to meet to decide on the conclusion of a new co-ownership syndicate contract. The Co-ownership Ordinance thus repeats the same rule as that which had been provided for co-ownership syndicate contracts that expired between 12 March 2020 and 23 July 2020.

In these circumstances and by virtue of the Co-ownership Ordinance, current co-ownership syndicate contracts will be renewed until the new contract of the syndicate appointed by the next general meeting of co-owners takes effect. However, it is specified that the new contract must take effect no later than 31 January 2021.

In addition, the Co-ownership Ordinance provides that the syndicate’s lump-sum remuneration during the current period must be calculated according to the terms provided for in the expired contract and in proportion to the duration of its renewal.

Lastly, it should be noted that the text specifies that the above-mentioned provisions “are not applicable when the general meeting of co-owners has designated, before [19 November 2020], a syndicate whose contract takes effect as from 29 October 2020″, the Co-ownership Ordinance not being intended to call into question the designation of a syndicate that could have intervened validly in the framework of a general meeting held before its publication.

EXPIRY OF THE TERMS OF OFFICE OF THE MEMBERS OF THE UNION COUNCIL

The Co-ownership Ordinance applies the same mechanism to the mandates of the members of the syndicate council, whose role is notably to assist and manage the syndicate, and who must be consulted for the competitive tendering of certain markets and contracts and for the conclusion of contracts by the syndicate of co-owners.

Thus, and following the example of what had been provided for mandates that expired between 12 March 2020 and 23 July 2020, “the mandate entrusted by decision of the general meeting to the members of the syndicate council, which expires or expired between 29 October 2020 and 31 December 2020 inclusive, shall be renewed until the next general meeting of co-owners”, it being specified that this general meeting must take place no later than 31 January 2021. Here again, the above-mentioned provisions are not applicable “when the general meeting of co-owners has appointed the members of the syndicate council before [19 November 2020]“.

ORGANISATION OF VIRTUAL GENERAL MEETINGS OF CO-OWNERS

Due to the Covid-19 epidemic and the prohibitions on groupings that it entails, many co-ownerships find themselves materially unable to hold general meetings under normal conditions.

The Co-ownership Ordinance therefore resumes and extends a certain number of measures taken at the time of the first lockdown, aimed at allowing the holding of virtual general meetings, which the law of 10 July 1965 and its implementing decree do not allow.

These measures are mainly the following:

• possibility for the managing agent to convene a general meeting without the physical presence of the co-owners, the latter being then able to participate in the meeting by videoconference or vote by mail before the general meeting is held, it being specified that:

  – in the event that the use of videoconferencing is not possible, the syndicate may provide that the decisions of the syndicate of co-owners will be taken by means of a postal vote only;

  – any syndicate that has already convened a general meeting may have recourse to these new possibilities, provided that the co-owners are informed at least 15 days before the meeting is held;

  However and by exception to the foregoing, for general meetings convened on a date between 29 October 2020 and 4 December 2020, the managing agent may, at any time, inform the co-owners, by any means allowing the date of receipt of this information to be established with certainty, that the decisions of the syndicate of co-owners are taken by postal vote alone.

  In this case, (i) the information letter must set a new deadline for receipt by the syndicate of the postal voting forms, which may not be less than 15 days from the receipt of such letter, (ii) a copy of the postal voting form must be attached to the information letter and (iii) the decisions of the syndicate of co-owners must be taken no later than 31 January 2021;

  – the rules for convening (information on the place of the meeting and the procedures for participation, etc.) and holding general meetings (certification of the attendance sheet, signing of the minutes of decisions, etc.) provided for by the decree implementing the law of 10 July 1965 are adjusted accordingly;
   

• possibility for a representative to receive more than 3 voting delegations if the total of the votes that he himself and his principals have does not exceed 15% of the votes of the syndicate of co-owners (as opposed to 10% under normal conditions);
   
• possibility for the managing agent to decide on the technical means allowing the organisation of a general meeting without physical presence (video conference, audio conference, etc.), without the need for the general meeting to have decided beforehand on the use of such means.

It should be noted that the period of validity of the measures referred to above relating to the organisation of fully dematerialised general meetings of co-owners, initially scheduled to expire on 31 January 2021, has been extended by the Co-ownership Ordinance to 1 April 2021.

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Gide’s Real Estate Transactions & Financing practice group is available to answer any questions you may have in this respect. You may also get in touch with your usual contact at the firm.

This legal update is not intended to be and should not be construed as providing legal advice. The addressee is solely liable for any use of the information contained herein and the Law Firm shall not be held responsible for any damages, direct, indirect or otherwise, arising from the use of the information by the addressee.

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