Home Owners’Association (VVE): How to have a VvE decision annulled in time

If an individual VvE member cannot agree with a VvE decision, this person has the option of requesting the subdistrict court judge to have the decision in question annulled. Recently, the Supreme Court has provided more clarity about the period within which such a request must be made. In this blog we take a brief look at the legislation on this subject and discuss the Supreme Court ruling .

VvE decision annulment

Suppose your VvE has made a decision that you have major objections to. In that case, there are various reasons why you could have such a decision annulled (Section 2:15 of the Dutch Civil Code):

  • The decision is contrary to the legal or statutory rules of the making of the decision (eg meeting not convened correctly);
  • The decision is contrary to reasonableness and fairness;
  • The decision is contrary to the rules of procedure.

A request to have a VvE decision annulled must be submitted to the subdistrict court judge within one month after the applicant has taken cognizance or has been able to take cognizance of the decision (Article 5: 130 paragraph 2 of the Dutch Civil Code). With regard to a decision to amend the division deed, a different period of three months applies to claim the annulment of the relevant decision (5: 140 sub b BW). If a request is submitted too late, the sub-district court will declare the apartment owner inadmissible.

Moreover, a voidable decision should not be confused with a void decision. A decision may, for example, be void because it violates the deed of division, the law or the articles of association. Unlike a voidable decision, a void decision is deemed not to exist and therefore no annulment can be requested.

Case                                                         

The rules regarding the time limit for requesting annulment seem simple and unambiguous, but practice has proved more difficult. However, the Supreme Court recently issued a judgment providing the necessary tools for assessing issues related to this period.

In the case in question, the apartment owner had taken note of a VvE decision on the day, 10 December, that the VvE had announced the decision via its website and by sending an e-mail. The owner did not attend the meeting of November 23 where the decision was originally taken. The owner therefore stated that the period for requesting the annulment of the decision had only started to run on 10 December because he had only then taken note of the decision.

Not only the subdistrict court judge, but also the court of appeal ruled wrong with the owner in question. The court of appeal states that an owner / member of the VvE can generally be expected, if he cannot be present at the meeting, to find out as quickly as possible which decisions have been taken , so that the one-month period already starts one day after the meeting. However, the owner did not leave it at that and brought the case before the Supreme Court.

 Judgment of the Supreme Court

First of all, the Supreme Court states that the period starts as soon as the owner has reasonably been able to take cognizance of the decision. The circumstances of the case are decisive. The Supreme Court is of the opinion that if it is customary within the VvE to make decisions known through publication on a website, or through the distribution of an e-mail, that the owner could only reasonably have been informed of the decision from the moment when the announcement has taken place. This of course only applies if the owner has not attended the meeting himself. If it is not customary within the VvE to announce decisions among its members, it can be expected that information will be obtained about the decisions taken within one week after the meeting. In that case the period starts one day after the expiration of that week.

Explanation HR schematically shown:

Present at a meeting (or proxy) → 1 month after the meeting

Not present, no VvE announcement of decisions → 1 week to retrieve a decision, then 1 month 

Not present, but permanent VvE announcement of decisions → 1 month after the decision was announced

Conclusion

If we look at the literal text of article 5: 130 paragraph 2 “within one month after the applicant has become aware or has been able to take cognizance”, the last part of this sentence seems to imply that quite a bit can be demanded of the individual VvE member to find out decisions as quickly as possible. With the judgment of the Supreme Court this picture is nuanced, so that in some cases the period will only start later. Moreover, this does not affect the fact that if an owner finds out earlier in another way that the period starts from that moment (eg because another member had already informed the owner). In that case it is up to the VvE to prove that the relevant owner was already aware.

If you also disagree with a decision of your VvE or you want to defend yourself as a VvE against objections from individual members, you can contact M2 Advocaten.

 

Lawyer Ginio Beij (beij@m2advocaten.nl)

Owners Association (VvE): Owner of crawl space by statute of limitations?

Earlier we discussed the situation in which an apartment owner wants to excavate an existing crawl space in order to turn it into a fully-fledged basement, for example. But what if a previous owner has enlarged his basement by adding an existing crawl space and the Owners Association (OA, in Dutch “Vereniging van Eigenaren”, abbreviated: VvE) has failed to act against this for 25 years?  Can an apartment right be enlarged by statute of limitations? In this blog we describe a practical case in which this issue arose and then discuss the court’s verdict.

Case study

A buyer has bought an apartment with attached basement space. The previous owner has enlarged the basement space by creating a passage to the crawl space below. The crawl space originally belongs to the communal area of the VVE. According to the previous owner, for 25 years the VVE has never made a problem of using this crawl space as storage space. He is therefore convinced that this space has become his property because of the statute of limitations. The buyer, on the other hand, finds it better to write to the VVE and proposes to buy the space from the VVE. Enquiries with neighbours had taught him that in similar cases the VVE had sold common parts without problems.

However, the buyer doesn’t get the outcome that he expected. The VVE refuses to sell him the crawl space. In addition, he is asked to deliver the crawl space within two weeks in the original state. The buyer did not comply with the request of the VVE and then defended himself by stating that the crawl space in question had become part of his apartment right as a result of prescription.

Limitation period

Although there there are various opinions about this, a common part of the VVE can, in principle, be transferred to a private part of a separate apartment owner due to statute of limitations. This requires that the apartment owner actually behaves for a certain period of time as if he is the owner of the common part and the VVE is aware that the statute of limitations has begun to run. Furthermore, this period must be uninterrupted. How long this period should be before prescription depends on each case.

In the case above, in principle, two forms of prescription may apply; acquisitive prescription or liberating prescription. Acquisitive prescription is when a person has owned an immovable property in good faith for a continuous period of 10 years. You are only in good faith if you could not have known that the property in question was not your property. Because ownership of real estate in the Netherlands is recorded in the land register, this form of prescription is rare. If there is no good faith then a period of 20 years of uninterrupted possession is required before the person who has appropriated the property can legally call himself owner. Incidentally, this possession may be interrupted if the VvE gives notice in good time that it does not agree to the possession.

Court ruling

The court took into account that the VVE had not been informed about the crawl space being used by the previous owner. This owner created a passageway from his own basement space that could not be observed by the VVE. If there is no public ownership, the limitation period will only start to run when the VVE has been informed of the situation, according to the court. In this case there was no reason to assume that the VVE had become aware of the use of the crawl space earlier. The fact that a local resident was able to confirm that the previous owner had actually been using this passageway for 25 years does not alter the fact that the VVE was not necessarily aware of this. The District Court’s judgment is therefore that there is no question of prescription. The crawl space remains the property of the VVE.

Conclusion

Although it turned out differently in this case, it can be deduced from this judgment that the ownership of a common space can in principle be transferred to a separate apartment owner by statute of limitations.  It is therefore important for an VVE to respond in good time if it becomes aware of the occupation of a communal area. For an apartment owner who wishes to invoke prescription, it may be wise to have the new situation included in the deed of division in order to avoid discussions later. This case shows that sometimes it is better not to let a sleeping dog lie. It might bite if you do.

Do you have questions about prescription within the apartment law or are you looking for advice in a similar situation? If so, please feel free to contact M2 Advocaten.

Lawyer Marius Rijntjes (rijntjes@m2advocaten.nl)

 

warning sign mind your neighbors thank you

Apartment law: Nuisance caused by room rental

Unfortunately, neighbors and nuisance often turn out to be a recurring combination. Not in the least when the adjacent house has been made available for room rental to students. In a case handled at the District Court of Amsterdam, the neighbour of the floor below appealed to the deed of division, which states that the apartment may only be used as a dwelling. The question is whether room rental does or does not fall under the term ‘dwelling’.

An apartment owner rents out separate rooms of his house to four students. As a result, the sub-neighbour experiences quite a lot of noise nuisance. The neighbour states that the students play loud music and receive a lot of visitors in the evening hours, causing noise in the apartment and stairwell late at night. These complaints are substantiated with an expert report and statements from the ground floors.

Are you fighting with a deed of division?

The neighbour states that the apartment owner does not comply with the deed of division which states that the apartment must be used as living space. According to the neighbour, the term ‘living space’ in this case means an ‘independent living space’ (just like in the administrative housing act) and room rental is therefore not allowed. If room letting is prohibited according to the demerger deed, the neighbour can take this as an opportunity to apply for a ban. In this case, however, such a ban on room rental was not directly included in the demerger deed or the demerger regulations. The definition in the Housing Act simply does not apply in this case, according to the District Court.

What the District Court can do is to examine whether it can be ruled according to objective standards that the parties have agreed that renting rooms is not permitted. This objectivity is an important condition because third parties must also be able to rely on the contents of the deed of division when inspecting it. In this case, the District Court did not find any leads in the deed of division and the demerger regulations that would show that it was once intended to prohibit room letting. In short, the neighbour could not demonstrate that the apartment owner with room rental was in violation of the demerger deed.

Unlawful nuisance?

Fortunately for the neighbour, he had also held the apartment owner responsible for unlawful nuisance (Article 5:37 of the Civil Code & Article 6:162 of the Civil Code). According to established case law of the Supreme Court, in order to determine whether unlawful annoyance actually occurred, the nature, seriousness and duration of the annoyance and the damage caused by it in connection with the further circumstances of the case are taken into account. According to the District Court, neighbours in an apartment complex will experience nuisance more quickly because they share several walls and floors with different neighbours. This requires, on the one hand, that one should take more account of each other, but, on the other hand, that one should also tolerate some nuisance from each other.

In this case, however, the apartment owner failed to take adequate measures against the nuisance despite knowing about it. The nuisance has also been substantiated by an expert report and is also confirmed by other neighbours. The District Court therefore ruled that there was unlawful nuisance caused by noise. The apartment owner will therefore have to take measures to prevent future nuisance.

If owners of the OA are in agreement, it is safest to include a ban on room rental in the demerger deed in order to prevent a lawsuit such as this.

Are you also struggling with nuisance from neighbours or would you like to rent out your apartment room by room and are you looking for advice? Please feel free to contact M2 Advocaten.

Lawyer Marius Rijntjes (rijntjes@m2advocaten.nl)

 

Roof terrace

Owner’s Association (VvE): Amend the deed of division when constructing a roof terrace or basement?

Space is scarce in the Netherlands, and people are often looking for ways to expand their current apartment, for example by building a terrace on the roof or converting the crawl space into a fully-fledged basement. However, such renovations will probably require permission from the VVE and possibly even modification of the deed of division. When should you and when shouldn’t you do this?

Permission from the VvE

In principle, a person is free to make changes within the limits of his private area as long as these changes do not put others’ private area or the common space at a disadvantage (5:119 BW). Nevertheless, the model regulations state that any way of alteration, without permission from the VVE is prohibited. In more recent model regulations, the prohibition of additional construction has also been added. In addition, most unbundling regulations stipulate that no changes may be made to the building that alter its architectural appearance or construction. In short, for the vast majority of apartment owners, even in the case of a private section, permission will have to be requested from the VVE for the construction of, for example, a roof terrace or a basement. This may be different if model regulations are not used or if deviating provisions are included. Of course, permission must always be obtained for changes to common areas. Incidentally, it should be noted that an environmental permit (formerly a building permit) will often first have to be applied for from the municipality before the VVE want to grant its permission.

Amendment of splitting deed

As soon as permission has been obtained for the conversion, the next question is whether an amendment to the deed of division is required. The main rule is that if the conversion is within the boundaries of the private area, no amendment of the deed of division is required. If, on the other hand, construction takes place outside the boundaries of the private section, the deed of division does in principle have to be amended. It is important here to realise that normally all parts of an apartment complex that are not precisely defined in the demerger deed as being a private part belong to the common area. The following will describe how these rules work out in practice when constructing a roof terrace or basement.

Roof terrace placement

If an apartment owner is allowed to include the roof on his apartment in his private area, the deed of division will not have to be changed at the moment he wishes to place a roof terrace on that roof. However, even in the case that this roof belongs (partly) to the common parts, an amendment of the demerger deed is not necessarily required. The Supreme Court has ruled that if an amendment lends itself to restoration, an amendment of the demerger deed is not necessarily required. When a roof terrace is installed, it is generally assumed that this situation can be reversed fairly easily.

The bottom line therefore is, that the construction of a roof terrace does not quickly require a modification of the demerger deed. Nevertheless, it may be wise to include the construction of the roof terrace in the demerger deed. In this way, the builder can obtain a transferable exclusive right of use, while it can also be arranged that the VVE is no longer jointly responsible for the maintenance of the roof terrace.

Excavated crawl space/cellar

What if an apartment owner on the ground floor decides to dig out the crawl space under his apartment and turns it into a fully-fledged basement? Crawl spaces are usually not included in the deed of division. This new cellar therefore falls outside the private boundaries and this means that it belongs to the common parts. The construction of a new space such as a cellar can also be regarded as a structural change of a non-temporary nature. Therefore, if this apartment owner wishes to obtain the exclusive right of use of the cellar, the deed of division will have to be amended. In the situation that an apartment owner wishes to deepen his existing basement, in principle no amendment to the deed of division will be required provided that the original basement was already included in the deed of division as his private part.

Conclusion

If a model regulation is used, permission from the VVE is almost always required for the construction or substructure of a roof terrace or basement. Whether or not it is necessary to amend the deed of division depends on whether the boundaries of the private area are violated. If so, the next question is whether the change is of a structural nature. If this is not the case, no amendment of the deed of division will be required. Nevertheless, there may be good reasons for both the apartment owner concerned and the VVE to want to include the change in the demerger deed, but this does not constitute an obligation in that case.

 

Are you still in doubt as to whether an amendment to the deed of division is required, or do you have other questions in connection with this article? Please do not hesitate to contact us.

 

Lawyer Ginio Beij (beij@m2advocaten.nl)

 

reserve fund

LEGISLATIVE IMPROVEMENT OF FUNCTIONS OF THE OWNERS ASSOCIATION (VvE) effective 1 January 2018

On 1 January 2018, the Improvement of the Functioning of Owners’ Associations Act came into force. OA’s (in Dutch “VvE”) do not save enough for maintenance and can hardly borrow money for such maintenance. As the name of the Act indicates, the purpose of the Act is to improve the functioning of associations of owners and to increase the possibilities for the necessary maintenance. We have listed the most important consequences of this law for you.

A mandatory minimum reservation

As of 1 May 2008, it was already mandatory for VVEs to hold a reserve fund, but there was subsequently no minimum amount to be held in cash. At the time, the legislator was of the opinion that there were sufficient incentives for VVEs to maintain a sufficiently high reserve fund, but in practice this turned out to be different. According to research, it still appears that 51% of the VVEs have no or insufficient resources to carry out the necessary maintenance.

Therefore, as of 1 January 2018, a minimum annual reservation of at least 0.5% of the rebuilding value of the building will apply to VVEs. For the time being, this obligation only applies to apartment owners of a building intended for residential use, but also in the event that the building is only partially used for residential purposes, this obligation will apply.

Should the VVEs believe that this will lead to an excessive reservation, they are free to make reservations based on an MYMP (multi-year maintenance plan) in the future, whereby a lower annual reservation than 0.5% can also be chosen, provided that the maintenance plan meets the requirements that are set for it.

It is important to mention that the VVEs have up to three years after the entry into force of this Act at the latest to comply with the new legal requirements.

Enforcement

Incidentally, compliance with this statutory regulation will not be monitored by the government and therefore no enforcement will take place. The government is (once again) counting on the independence of the VVEs. Nevertheless, this standard does make it easier for individual owners to legally enforce the minimum reservation. For example, failing to make sufficient reservations may lead to improper management and directors’ and officers’ liability.

Incidentally, according to a ruling under the old law, an VVEs could also become obliged to increase the reserve fund in order to be able to meet the expected maintenance, but the new law makes it a lot easier to prove that an VVEs does not meet its obligations.

VVEs now authorised to get a loan

On the basis of the model regulations up to 2006, there was previously a great deal of uncertainty as to whether VVEs could get loans for maintenance. Even among lawyers, there were different views on this matter. The main reason for this was that banks were reluctant to grant loans to the VVEs for fear of nullity or annulment of the loan. The new law puts an end to this lack of clarity and stipulates that the VVEs may take out loans for management purposes. Moreover, it can still be stated in the demerger regulations that the relevant entity is not competent to do so.

No joint and several liability for loans

As just mentioned, under the old circumstances, banks were reluctant to lend to VVEs. When they did, they usually did so on a joint and several liability basis. In other words, each member of the VVE could be held individually liable by the bank for the entire loan. It will now need little explanation that in practice only few VVEs members were prepared to do so, so loans were rarely granted. The new law solves this problem by treating the loan from the VvEs as a severable debt. This means that an individual member can only be held liable for his or her share in the community. Incidentally, this severable debt cannot be deviated from contractually.

In addition, the new law contains a provision stating that debts contracted by the VVEs are transferred upon sale to the new owner. The new owner must, of course, be informed of this debt. Incidentally, loans already existing prior to the entry into force of the new law on 1 January 2018 will not automatically be transferred to the new buyer. In that case, the lender of the loan will have to give its consent.

Ginio Beij

 

Does your VVEs have to deal with overdue maintenance or are you looking for more information about the new legislation? M2 lawyers is specialised in UvE cases and can advise you on this.

Attorney at law Ginio Beij (beij@m2advocaten.nl)

 

service costs

Living space service costs: Can the OA (VvE) contribution be charged on to the tenant?

It regularly happens that a landlord passes on the Owners Association (OA, in Dutch “VvE”) contribution to his tenant as part of the service costs, but is this actually allowed? For example, in a recent judgment of the Amsterdam Subdistrict Court it was ruled that a landlord had wrongly charged the VVE contribution of 200 euros per month to its tenant as service costs. As a result, the landlord had to repay no less than €5500 in undue VVE contributions to the tenant. However, this does not mean that a VVE contribution can never be passed on to a tenant. When can the VVE contribution be passed on to the tenant and when can it not be?

Not charging VVE costs one-to-one

In the case as described above, the landlord had included in the lease that the tenant was due a monthly fee in respect of the ‘service costs VVE. However, the court ruled that VVE costs cannot be passed on to a tenant on a one-to-one basis. VVE costs may only be passed on to a tenant to the extent that they are directly related to the use of the property.

A landlord is therefore better advised to specify these VVE costs in more detail in order to make it clear that they are indeed user costs. It does not suffice to simply include a cost item ‘service costs VVE, since service costs for the VVE will normally not consist entirely of user costs. Incidentally, it should be noted that in this court case, the lessor could not subsequently prove that these were operating costs.

In some cases, it will not be immediately clear to the landlord what specific amounts the monthly remittance to the VVE consists of. In that case, a more detailed cost specification will have to be requested from the VVE in order to find out which parts of it can be passed on to the tenant. The tenant is therefore also entitled to such a cost specification.

 

Which costs within the VVE contribution can a lessor pass on?

Examples of costs that can be passed on to the tenant are:

– Heating costs

– Glass cleaning of windows that the occupant cannot reach without risk.

– Electricity consumption of communal areas

– Cleaning costs of common areas

– Sweeping of chimneys and drains

What costs within the VVE contribution can a landlord not charge to his tenants?

Examples of costs that cannot be passed on to the tenant are:

– Required maintenance costs for the complex (e.g. maintenance of the lift and/or existing lighting installations).

– Repairs to the building

 

How do you charge these costs to the tenant?

If a landlord wishes to pass on certain VVE costs to the tenant, these costs must first be specified and agreed in the tenancy agreement. Subsequently, the landlord is legally obliged to provide the tenant annually with a specified(!) overview of these service costs (article 7:259 paragraph 2). The tenant may require the lessor to substantiate the costs with statements of account. The lessor is not permitted to make a profit on recharged costs. Therefore, a lessor may not charge more for user costs than it has actually incurred.

The annual service costs overview must be provided within six months after the end of the calendar year at the latest. In short, before July 1st, the lessor must have provided the lessee with an overview of the costs for the previous calendar year. In addition, the provision of a service charge overview is necessary if a lessor wishes to increase the advance payment amount (Article 7:261).

In short, if user costs are included in your VVE payment, these costs may be passed on to your tenant provided this has been agreed in the lease agreement. Subsequently, provide a clear and specified service costs overview on time and annually. If the tenant does not agree with the service costs, the rent commission and otherwise the subdistrict court may be requested to rule on the service costs.

 

Ginio Beij

 

Do you have further questions about charging service costs or other questions?

Please feel free to contact M2 Advocaten.

Multiple door bells in an apartment building

Dissatisfied with Owners Association (VvE)-manager? There is something you can do.

In my practice, I come across it regularly. Complaints about VVE managers. The complaints vary, but there are a number of recognisable elements, such as poor communication, slow reaction to complaints and inefficient use of financial resources.

Although there is a lot of dissatisfaction lurking, it is not (yet) common for real action to be taken. As a result, the VVE manager remains and continues working the same way, while the service provision leaves much to be desired.

That is why it ss special that I recently had the opportunity to deal with a case in which a number of VVE residents no longer accepted it, which eventually led to proceedings. It is interesting how the judge has assessed the manager’s actions.

Quality procedure of VVE-Manager

What on earth was going on? In a VVE in Amsterdam of approx. 280 apartments, a housing corporation owns the majority. A party affiliated with the housing corporation has been appointed as manager.

In practice, however, there are many complaints about the conduct of the manager. A selection of the complaints:

– Slow response to repair requests from residents: There were cases known of residents who literally had fungal problems for years because of leaks, without any actions being taken;

– Insufficient check on suppliers’ invoices: Typical example of this is that an order was given to mop up some dirt on one of the stairs in the stairwell. € 800,- was invoiced for this, according to the specification 10 man-hours and 10 hours of parking. Not only was this out of proportion, it was also free parking that day so this was not correct either. Nevertheless, the manager paid for it without asking questions;

– Lack interest with procurement: A new building insurance was taken out, where the premium went over five times, from ca € 10.000,- to € 50.000,-. Upon enquiry it appeared that the manager had not asked for more than one offer.

Another factor was that the manager was not independent of the housing corporation. For this reason, there was too little opposition to plans of the housing corporation that were not in the interest of other members. For example, a neighbourhood manager was appointed at the expense of the VVE for € 18,000 per year, who was employed by the housing corporation but had little added value for the VVE.

A number of VVE members were distressed by these developments and collected the various complaints and also discussed them with the manager. After no improvement was made, a meeting of the VVE was proposed to terminate the management agreement. This was blocked by the majority vote of the housing corporation.

Subsequently, the VVE members submitted this decision to the Subdistrict Court. On the initiative of the Subdistrict Court, a committee was even set up to examine the actions of the manager. The majority of this committee advised negatively on the continuation of the management relationship,

In the end it weighed heavily on the Subdistrict Court that there were many different complaints about the manager, this in combination with the non-independent position. The court therefore annulled the decision that the manager could remain and ruled that the board was authorised to terminate the management agreement.[1] In the meantime, the management agreement has indeed been terminated and a new manager is ready to take over his place.

5 steps in the event of under-qualified management by the VVE

The lessons learned from this are the following:

  1. Collect the complaints and substantiate them with documentation: It is of course important if there is dissatisfaction about the manager that you underpin your complaints. Just “not being satisfied” without clarifying the why will not change the situation. It is therefore essential to provide good insight into what is going wrong.
  2. Firstly, start a conversation with the manager: It is important that the manager gets a chance to improve first. Use the documentation to make clear what complaints there are and make measurable agreements to improve management. If this goes well, then the problem is solved. Otherwise it is time for the next step.
  3. Check the cancellation options in the management agreement and prepare a good alternative: If the VVE already wants to appoint a new administrator, it must be clear by what deadline this can be done. It is also important to have selected a good alternative, or preferably more than one, so that it is possible to switch to a new administrator immediately.
  4. Ensure support within the VVE: The possible transfer to a new administrator is a major decision. That is why it is important to inform and keep the VVE members informed as much as possible. In practice, there are always members of the VVE who hardly ever concern themselves with VVE matters, but at the same time want good management. It is also necessary to keep them well informed so that they know what is going on.
  5. Submit the termination of the management agreement and the appointment of a new administrator to the VVE meeting: Based on the documentation and possibly the (unsuccessful) improvement process, the reasons for proposing a new administrator can be explained in the VVE meeting. In order to be able to proceed quickly, it is a good idea to vote on the alternative in the same meeting, or in a meeting shortly afterwards.

In case a member of the VVE blocks the decision-making with a majority vote because of links with the administrator or for any other reason, it is possible to submit this to the subdistrict court within 1 month after the VVE meeting.

Would you like to know more?

Contact Ginio Beij (beij@m2advocaten.nl).

1] Subdistrict Court of Amsterdam 28 June 2017 Case no. 5453726 v. EA-VERZ 16-1264 (unpublished)

maarten van den heuvel

From the practice of M2 Advocaten: VvE law

It sometimes happens that a new owner presents himself within a HOA who has certain plans and requests permission for this. This was also the case in a case in which M2 Advocaten was involved.

This case involved a hotel owner who had bought a residential apartment on the first floor and wanted to add this floor to his adjacent hotel and exploit four hotel rooms. The HOA did not think this was a good plan and did not give permission to change the purpose of the apartment from “living” to “hotel/lodging”.

The owner did not agree and requested a replacement authorization from the Subdistrict Court to operate a hotel in the apartment. One of the arguments put forward by the owner was that it was unfair that another owner had been given (conditional) permission to rent out his salvage through Airbnb, while operation as a hotel was not allowed. The Subdistrict Court saw this differently and judged that operation as a hotel was not comparable to renting through Airbnb. The replacement authorization was not granted.

The owner did not give up and appealed. On behalf of the HOA, M2 Advocaten argued, among other things, that there are risks to a commercial party in the building and that – by extension – depreciation of the apartments would be possible. The Court of Appeal agreed. Another implication to a commercial operation is that the hotel may be transferred or changed in concept at any time. According to the Court of Appeal, this makes the apartments less attractive when they are sold – compared to apartments to which this uncertainty does not apply.

It was also argued on behalf of the HOA that the operation of four hotel rooms on the first floor cannot be equated with the rental of a storage room via Airbnb. Hotel operation is a permanent situation, in which the public-law destination is also converted into “hotel/lodging”, while rental through Airbnb is a temporary situation, which can be discontinued at any time by the HOA and in which the public-law destination remains “living”. This was also upheld by the Court. The replacement authorization was not granted.

It is good to know for HOA that a replacement authorisation can be granted if a requested authorisation has been refused without reasonable grounds. In this case, the HOA’s grounds for refusing a hotel were reasonable. In the case of a change of purpose, it is good to know that literature suggests that a change of purpose should only be possible if the change is 1) personal, 2) temporary and 3) recoverable. In this case, this was not the case for the desired hotel destination.

Would you like to know more? Feel free to contact us.

Marius Rijntjes (rijntjes@m2advocaten.nl)

Error in splitting deed. Are the next owners protected?

Owners are protected as third parties in good faith after they bought a property. They can invoke this protection against the person who should have known about the error but did not ensure that the registers corresponded to reality (i.e. registration of a deed with the correct content). This was recently the case in a Supreme Court case. It concerned the following case.

The division of an apartment complex, consisting of houses and shops, had been declared subject to the model regulations of 1973. As an exception to this, the deed of division stipulated that the costs for the communal areas of the residences were to be borne solely by the owners of the residences.

Following an amendment to the deed of subdivision in 1994, this exception was (inadvertently) no longer included. In subsequent years, however, the costs of communal areas were borne by the owners of the dwellings. In 2009, the new VVE administrator discovered that this did not correspond to the amended deed of subdivision of 1994.

Subsequently, a dispute arose between the owner of the shops and the owners of the dwellings – most of whom became owners after the amendment of the demerger deed – as to whether the owners could rely on the accuracy of the 1994 demerger deed and whether the owner of the shops would still have to contribute to the costs for the communal areas of the dwelling.

The law provides that third parties enjoy protection in good faith against incorrectly recorded facts. This protection can be invoked against the person who could reasonably have ensured that the registers corresponded to reality. According to the Supreme Court, this means that the protection can also be invoked against the person (does not know but) who should have known the inaccuracy of the fact recorded by himself, but failed to ensure that the registers corresponded to reality.

In this case, the deed of division had been amended on the initiative of the shop-owner, whereby the shop-owner was provided with notarial and legal advice. Under these circumstances, the shop-owner could reasonably have ensured at the time that a deed with the correct content was registered, according to the Supreme Court. That did not happen.

Moreover, the later owners had no reason to doubt the legal validity of the 1994 deed. They could rely on the correctness of that deed. According to the Supreme Court, the fact that the ‘old’ cost system was used for many years after 1994 does not make this any different.

The conclusion is therefore that homeowners are protected against the error in the demerger deed. Whether or not the shop-owner actually has to contribute to the costs for the communal areas of the residential area remains to be seen. The shop-owner had appealed to the Court of Appeals in that respect – which the Court of Appeal had ignored – and this will still have to be investigated.

For apartment owners it is good to know that they, as third parties, are protected in good faith against inaccuracies in the demerger deed and that they may rely on the correctness of the deed.

Would you like to know more? Feel free to contact us.

Marius Rijntjes (rijntjes@m2advocaten.nl)

Can a VvE ban AirBnB or Short Stay?

A previous blog has already extensively discussed the requirements to start a bed-and-breakfast (read this blog here).

A situation that also regularly occurs is that within an apartment building properties are used for AirBnB or short stay. Especially during short stays this can be a nuisance. A group of tourists spending a long weekend in Amsterdam can usually be a bit noisier than the average resident. For example, we are aware of cases where the common areas (corridors, elevator, stairwell) have been damaged.

The question is whether the VvE can prevent such use and how. Most split certificates (based on the model regulations) state that the owner may only use the apartment according to the purpose stated in the deed. If the apartment’s purpose is living, then the question is whether renting for AirBnB or Short Stay is contrary to that purpose.

Case law shows that especially with regular short stay rentals this is contrary to the purpose of living. In several judgments it has been determined that living is a matter of ‘permanent residence’ and that a short stay does not fit in with this. See, for example, this judgment.

For an VVE, it is advisable to explicitly include the ban on renting out for AirBnB or Short Stay in the demerger deed or the internal regulations (the latter is easier to achieve in practice than amending the demerger deed). In this way, there is clarity for all apartment owners. The VVE often also has the possibility to impose fines in case of violation of this prohibition, in order for an extra means of pressure to prevent unwanted rentals. These fines must also be recorded.

However, it is not always the case that a rental on the grounds of AirBnB or short stay is in conflict with the purpose of living. If, for example, an apartment owner is abroad once for 3 months and rents out once for that period, this does not have to detract from the sustainable use as a home. In that case, such an occasional rental does not conflict with the purpose of living. An example of this in this ruling.

It must therefore always be taken into consideration whether a rental for short stay or AirBnB purposes is prohibited. Usually, this rental will be in conflict with the living purpose, so that the VVE can prohibit this use and even impose fines. If it is an occasional rental, it may be different in some cases, but that is an exceptional situation.

Does this situation look familiar to you or would you like to discuss the situation in your home office? Feel free to contact us.

Lawyer Ginio Beij (beij@m2advocaten.nl)