Why does an unpaid amount become a collective problem?
Calls for funds serve to pay expenses that do not stop when a co-owner is late in paying their share. Insurance, electricity, heating, maintenance and ordered works remain due.
The first effect is a cash-flow gap. If the accounts are tight, the syndic may no longer have the funds needed to pay the suppliers.
The debt remains that of the co-owner concerned. The others do not automatically become debtors in their place, but they may suffer the practical consequences of the lack of liquidity.
What must the syndic check before following up?
The amount requested must be capable of being explained. The statement must distinguish the calls for funds, the payments, the adjustments and the balance.
The Grand-Ducal Regulation governs the sums the syndic may request: permanent advance, provisions linked to the budget, reimbursement of expenses incurred, special provisions and contributions to the works fund.
These requests are capped. The provision at the start of the financial year may not exceed a quarter of the voted provisional budget, or half if the regulations do not provide for a permanent cash advance. The quarterly provisions during the financial year may each not exceed a quarter of this budget. A call for funds that falls outside these categories or these limits may be discussed before being paid.
An error in the reference, a misallocated payment or an old address may sometimes explain the delay.
What is the difference between a reminder and a formal notice?
A reminder recalls a due date. A formal notice produces legal effects.
Unless a contrary rule of the regulations applies, the sums owed bear interest at the legal rate in civil matters from the formal notice.
The claim may also be secured by a legal mortgage on the lot. It is registered after a formal notice that has remained unsuccessful and ranks as of the date of its registration. No registration may any longer be requested for claims that have been due for more than five years.
How must recovery progress?
The syndic keeps a record of the requests and responses. The move from a reminder to a formal notice, and then to proceedings, depends on the amount, the age and the file.
An isolated delay is not handled like several unpaid financial years. The small size of the building does not justify letting a debt accumulate.
Must the other co-owners advance the sum?
Each co-owner remains liable for their own share. The co-ownership must nevertheless continue to pay its expenses.
If the cash position becomes insufficient, the general meeting may have to finance the operation temporarily. This decision does not definitively transfer the debt and the accounts must continue to show the claim.
Sums allocated to another purpose must not be used silently.
What can a co-owner in difficulty do?
Silence worsens the situation. A co-owner who anticipates a difficulty should contact the syndic promptly, check the amount and explain their situation.
A payment schedule does not remove the debt, but an early discussion can prevent the interest from being added.
What the syndic may and may not disclose
The accounts submitted to the general meeting must show the position of each co-owner in relation to the syndicate: the balances appear there, and it is an obligation that falls on the syndic. This does not authorise the syndic to comment in the meeting on the personal, professional or family situation of the debtor co-owner, which is not necessary for recovery.
Personal actions arising from the application of the law between co-owners, or between a co-owner and the syndicate, are time-barred after ten years. Disputes fall within the jurisdiction of the place where the building is located.
Reference texts
- Law of 16 May 1975 establishing the statute of co-ownership of built property (Mémorial A No 28 of 23 May 1975), in particular Articles 24, 34 and 35
- Grand-Ducal Regulation of 13 June 1975 (Mémorial A No 34 of 20 June 1975), in particular Articles 25 and 26