Co-owner unpaid charges: reminders, formal notice and the justice of the peace

One call for funds goes unpaid, then the next. The co-owner concerned stops replying, or promises to sort it out "next month". Meanwhile the building's invoices keep arriving, the working capital fundGlossaryTotal of the advances paid by the co-owners, as provision, to cover recurring expenditure such as heating and lighting of the common parts or management fees. It is held in a separate account in the association's name. See the glossary shrinks, and the property manager (syndic) ends up issuing an extra call for funds to the co-owners who do pay. Co-owner unpaid charges put the whole co-ownership under strain.

Our advice fits in one sentence: send a reminder from the first unpaid call for funds. Old arrears are harder to recover than a delay dealt with straight away. The good news is that Belgian law gives the syndic the means to act on his own initiative, without waiting for the general meeting (GM). What matters is following the right order: reminder, formal notice, the justice of the peaceGlossaryJudge with jurisdiction, since 1 January 2019, over all disputes relating to the co-ownership of buildings, whatever the amount claimed. A clause in the articles that would refer such disputes to an arbitrator is deemed unwritten. See the glossary if necessary, and as a last resort the sale of the unit, which often allows the debt to be recovered.

Can the syndic act without the general meeting's prior consent?

Yes. Article 3.86, § 3, of the Civil Code is clear:

“The syndic may take all judicial and extrajudicial measures to recover the charges.”

Art. 3.86, § 3, Civil Code

This power comes on top of the syndic's general task of representing the owners' association (VME/ACP)GlossaryLegal entity that brings the co-owners together and whose sole purpose is the preservation and management of the building. It acquires legal personality as soon as a first unit is transferred, provided the deed of division and the co-ownership regulations have been transcribed. See the glossary in court. On 19 March 2021, the Court of Cassation held that the syndic can bring proceedings for payment of advance charges and arrears without obtaining the consent or ratification of the general meeting.

In practice, then, no vote is needed to instruct a lawyer or to have a defaulting co-owner summoned. The syndic remains responsible for his management: he must be able to justify his steps and their cost, and account for them at the general meeting that approves the accounts. In a co-ownership with a co-ownership council, informing the council as soon as the file is opened avoids a good deal of tension.

A volunteer syndic has the same power as a professional syndic. The difference lies in the workload and in the more frequent need to rely on a lawyer.

Reminders and formal notice: the amicable stage

Court proceedings are prepared from the first delay. Everything turns on proof.

The first reminder can go by letter or by email. It sets out the unpaid call for funds, its amount, its due date and the association's bank account. A neutral tone is enough: many delays come from a change of bank, a cancelled direct debit or a lost letter.

If the reminder has no effect, send a formal notice by registered post. It must set out the detail of the sums due, restate the basis of the claim (calls for funds decided by the general meeting, approved statement), set a deadline for payment and announce that proceedings will be brought otherwise. In principle this letter starts late-payment interest running, and it shows the court that the co-owner was warned.

A co-owner in temporary difficulty may offer to spread the debt. The syndic can accept, in writing, with precise instalment dates and a clause making the balance payable at the first missed payment. Offering a reasonable payment plan often costs less than proceedings.

One thing, however, is ruled out. We say it plainly: cutting off a unit's water or heating to apply pressure is not a recovery measure. The syndic has legal remedies, and he should use them.

Possible penalties must appear in the articles. The co-ownership regulations contain "where applicable, the clauses and penalties relating to non-payment of these charges" (Article 3.85, § 1, para. 4, 2°, of the Civil Code). A penalty that does not appear there cannot be invented by the syndic. And a penalty clause whose amount clearly exceeds the loss suffered can be reduced by the court.

Interest and costs: what to claim on top of the principal?

Justice of the peace: how do the proceedings work?

The justice of the peace has jurisdiction over disputes concerning the forced co-ownership of buildings, whatever the amount of the claim (Article 591, 2°bis, of the Judicial Code). The action is brought before the justice of the peace of the canton where the building stands.

A typical case runs as follows.

1. The syndic puts the file together: articles, minutes of the general meetings approving the budget and the accounts, calls for funds, individual statement, extract of the co-owner's account, copies of the reminders and the formal notice with proof of sending.
2. A bailiff serves the summons on the co-owner, stating the hearing date. The action is brought in the name of the association, represented by its syndic.
3. At the hearing, the co-owner can appear and dispute the claim. If he does not appear, the court can give judgment by default.
4. In its judgment, the court orders payment of the principal, the interest and, where applicable, the penalty clause, and rules on costs.
5. If payment does not follow, the bailiff serves the judgment and can then levy an attachment, for example on the bank account, on rent received or on the debtor's assets.

A co-owner who disputes an approved statement cannot simply suspend his payments. It is up to him to take action against the general meeting's decision within the legal deadlines: the page challenging a GM decision explains that remedy, and the page on the justice of the peace explains how that court works.

What happens to the arrears when the unit is sold?

A sale is often the moment when the co-ownership finally recovers what it is owed, thanks to three mechanisms.

Prior information

Before the preliminary sale agreement is signed, the syndic discloses, among other things, the amount of any arrears owed by the seller, including the costs of judicial or extrajudicial recovery (Article 3.94, § 1, of the Civil Code). The notary then requests a further statement, to which the syndic replies within thirty days (Article 3.94, § 2). The documents to gather are set out in documents required for a sale.

Deduction by the notary

When the notarial deed is signed, the notary must withhold from the sums due the arrears of ordinary and extraordinary charges, including recovery costs, owed by the seller, as well as the costs of providing the information (Article 3.95 of the Civil Code). He does, however, first pay the preferential, mortgage or garnishing creditors.

If the seller disputes these amounts, the notary notifies the syndic by registered post within three working days of the deed. The association then has twenty working days from that notice to serve a protective or enforcement garnishment. Without a garnishment within that period, the notary can validly pay the withheld amount to the seller. A syndic who receives this registered letter therefore has those twenty working days to have the garnishment served, with the help of a lawyer or a bailiff.

The association's preferential right

Since the 2018 reform, Article 27, 7°, of the Mortgage Act grants the owners' association a preferential right over the unit for arrears of charges for the current and the previous financial year. This preferential right covers neither late-payment interest, nor penalties, nor recovery costs. It ranks after legal costs and previously registered preferential rights, which limits its reach when the unit is heavily mortgaged.

The buyer does not take over the seller's personal debt. He bears ordinary charges from the day he actually uses the common parts, and extraordinary charges falling due after the date of the transfer of ownership, under the rules of Article 3.94 of the Civil Code.

How can you stop one non-payer from unbalancing the whole co-ownership?

Prevention comes down to a few management habits. Regular calls for funds, quarterly for example, make a delay visible straight away. A realistic annual budget avoids sudden catch-ups that push the most vulnerable co-owners into arrears. A properly sized working capital fund, explained in the page on working capital and reserve fund, absorbs a delay without blocking payments to suppliers.

Finally, monthly monitoring of individual accounts, presented to the co-ownership council, makes it possible to deal with each delay before it turns into a dispute. To place this subject within the building's finances as a whole, see the page on co-ownership service charges.