May a co-owner perform the function of syndic themselves?
Luxembourg law does not create a specific status of "voluntary syndic". This expression generally refers to a co-owner who performs the function of syndic without being an external professional.
The exemption from a business permit concerns buildings comprising at most nine lots for residential use, provided that at least one of these lots belongs to the proposed co-owner syndic. The two conditions are cumulative.
The word "voluntary" does not necessarily mean that all remuneration is prohibited. The terms of remuneration are set by the general meeting by the majority provided for in Article 15. One must clearly decide whether the person acts free of charge, whether their expenses are reimbursed or whether an allowance is provided for.
The co-ownership regulations must also be checked: they may provide for specific conditions and, depending on their wording, reserve the function for a professional syndic.
Which expenses remain the co-ownership's responsibility?
The co-ownership must have a separate banking and accounting organisation. The sums received in the name of the syndicate are paid into an account opened in its name and the syndic keeps separate accounts.
To this are added the costs of postage, archiving, banking, insurance, advice or technical assistance. Management by a co-owner does not avoid the costs of a professional needed for a worksite, a dispute or an expert assessment.
How to measure the time actually devoted to management?
The visible time is that of the annual general meeting. The rest is spread over small tasks: checking payments, filing invoices, following up with a company, replying to an occupant, monitoring a loss or preparing a quote.
A quiet co-ownership may require few interventions for several months. A leak, an unpaid amount or major works may suddenly take up several evenings.
It is prudent to identify the tasks before the appointment and to decide what will be done directly, reimbursed or entrusted to a service provider.
When does this model work well?
It is suited above all to a simple building, well documented, with no major dispute and in which the co-owners cooperate.
It becomes fragile when the archives are incomplete, when the accounts are not closed, when heavy works are expected or when each decision provokes a conflict.
Three models can be compared: management by a co-owner, management with occasional assistance and a professional mandate.
How to ensure continuity?
The archives belong to the syndicate, not to the person who performs the function. The statements, contracts, invoices, minutes and access must be capable of being taken over.
In the event of the syndic being prevented or failing to act, any interested party may, after a formal notice that has remained unsuccessful for fifteen days, ask the president of the district court to entrust all or part of the task to a member of the supervisory board or to a provisional administrator. Where the syndicate finds itself deprived of a syndic, the chair of the supervisory board, or failing that any member of that board, convenes the general meeting with a view to the appointment of a new syndic. Until the latter takes office, the supervisory board carries out the acts of current management, including calls for funds, and the acts required by urgency. These mechanisms exist, but they do not replace usable documentation.
Who bears the risk of a management error?
A professional syndic normally holds professional civil liability insurance. A co-owner who accepts the function does not necessarily benefit from equivalent cover.
Before the appointment, the co-ownership should check with its insurer what is covered for management acts, payment errors, late declarations and the monitoring of works. This verification does not create an insurance obligation that would not appear in the law; it simply makes it possible to measure a risk that is often ignored.
How to avoid conflicts of interest?
Any agreement between the syndicate and the syndic, its employees or its relatives by marriage up to and including the third degree, or those of its spouse to the same degree, must be specially authorised by a decision of the general meeting. The same applies to agreements between the syndicate and a company of which those persons are owners or partners, or in which they act as manager, director, executive, employee or agent (Article 29 of the Grand-Ducal Regulation of 13 June 1975, Mémorial A No 34 of 20 June 1975).
In a small co-ownership, personal relationships are frequent. They must be declared and the decision documented.
Reference texts
- Guichet.lu, syndic activity and exemption
- Law of 16 May 1975 establishing the statute of co-ownership of built property (Mémorial A No 28 of 23 May 1975), in particular Article 22 (arrangements where the syndic is prevented, fails to act or is absent), as replaced by the Law of 22 April 1985 (Mémorial A No 22 of 9 May 1985)
- Grand-Ducal Regulation of 13 June 1975 (Mémorial A No 34 of 20 June 1975), in particular Articles 18, 19, 23, 24 and 29