Amendment to the Declaration of the Owner

Legal Basis: Two Regimes for Amending the Declaration

The legal framework for amending an owner's declaration in the Czech Republic is primarily governed by the provisions of Section 1169 of the Civil Code (CC). This regulation underwent significant changes in 2020 intended to simplify the process, but interpretative ambiguities still arise in practice. To clarify how the process works, it is essential to distinguish between two qualitatively different situations.

The standard regime – Section 1169(1) of the CC applies when an amendment to the declaration affects the rights and obligations of any unit owner in relation to their ownership. Examples include changing the size of the share in the common areas or altering the definition of a unit. In such situations, the consent of the affected owner is required, along with the consent of a majority of votes of all unit owners. This regime protects ownership rights from the arbitrary will of the majority.

The simplified regime – Section 1169(2) of the CC is used for amendments that do not affect the rights and obligations of unit owners, such as changing the purpose of use of common areas. In these cases, the consent of a majority of votes of all owners is sufficient to amend the declaration, without the need for any other individual written consent.

Although this seems straightforward, legal practice is more complex. Distinguishing between what affects an owner's "rights and obligations" and what does not often leads to disputes that end up in court. The lawyers at the Prague-based law firm ARROWS can help you accurately determine which regime applies to your situation, ensuring the correct procedure is followed and preventing the amendment from being invalidated.

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The Majority Principle in Condominium Co-ownership

The majority principle is one of the fundamental pillars of how an association of unit owners functions. There is a good reason for this: without it, making any practical decisions in a building with a hundred units would be impossible. If the consent of all owners were required for every decision, the building would fall into paralysis.

An owner is bound by decisions made at the assembly, even if they were not present or voted against them. This is particularly important for the routine management of the building – for the maintenance of common areas, repairs, and operational matters. It would be untenable to require the consent of every individual for these issues.

However, this principle is not absolute. The legal system includes a number of exceptions and protections that make it difficult for a minority to dominate, but also prevent the arbitrary will of the majority. One of the most important of these protections relates precisely to amending the owner's declaration and protecting the ownership rights of individuals.

Protection of Ownership Rights: The Limits of Majority Rule

The Czech legal system is built on the principle that ownership is one of the most important subjective rights. The Constitution of the Czech Republic protects the right to property as one of the fundamental rights. This leads to a logical conclusion: neither the association of unit owners nor a majority of owners can restrict an individual's ownership right without a legitimate reason and without following the statutory procedure.

It is precisely in the context of amending an owner's declaration that this protection is most strictly applied. If an amendment affects the rights and obligations of a specific owner – for example, if a part of their unit is taken away, or if their share in the common areas is changed – this owner cannot be outvoted without their written consent. This protection stems directly from Section 1169(1) of the CC.

The most common practical situations where this protection applies include changing the size of co-ownership shares, altering the definition of a unit (e.g., attaching part of a hallway to an apartment), or changing the ratio of contributions to the management of the building if it is determined in the declaration otherwise than by shares. In all these cases, the consent of the affected owner is required.

This model creates a certain asymmetry: while routine decisions about building management are made according to the majority principle, decisions affecting the essence of ownership require the consent of the affected persons. The lawyers at the Prague-based law firm ARROWS regularly deal with precisely these situations where these two principles collide.

Conflict in Practice: The Majority vs. The Individual

In real-world practice, the conflict between the majority principle and the protection of ownership rights manifests itself very concretely. Imagine a typical situation: In a building with fifty units, the Association of Unit Owners decides to reconstruct the risers. However, the new technical solution requires appropriating a part of the space that, according to the declaration, is part of a specific unit.

Here, the owner of the unit whose property is affected by this change appears and expresses their disagreement. The assembly votes to approve the change by a majority – let's say 40 out of 50 owners vote in favor. The remaining ten vote against, and the legal question arises as to whether the assembly could outvote the dissenting owner whose unit is being reduced in size.

Under Czech legislation, the answer is no. This is an amendment that affects the rights and obligations of the unit owner (a reduction of their exclusive property). Such an owner has the right to provide written consent to such a change.

However, if it were a change that only alters technical equipment in the common areas and does not affect the definition of the units or the co-ownership shares, it would fall under the simplified regime, and the consent of the majority would suffice.

The lawyers at the Prague-based law firm ARROWS resolve these very practical dilemmas. It is often not immediately clear whether a particular change truly "affects" an individual's rights with the intensity that requires their consent. The Czech legal team at ARROWS helps clients with this assessment, which is crucial in such cases.

Judicial Review: How an Outvoted Owner Can Defend Their Rights

If you, as a unit owner, feel you have been wrongfully outvoted, you have the right to a judicial review. The legal system allows for this through Section 1209 of the Civil Code. However, judicial review is not automatic and is subject to a number of conditions.

The most important condition is that the judicial review is contingent on the existence of an "important reason." The court examines whether the assembly's decision is contrary to the law or the statutes and whether it unreasonably interferes with the rights of the owners.

The deadline for filing a petition is three months from the day the owner learned or could have learned of the decision (but no later than one year after the decision was made). This deadline is preclusive – missing it means the right to a review is extinguished.

The court with subject-matter jurisdiction for disputes arising from condominium co-ownership is, at the first instance, the district court. Previously, these disputes were handled by regional courts, but there has been a change in procedural regulations. Filing a lawsuit with the wrong court can lead to unnecessary delays.

The lawyers at the Prague-based law firm ARROWS have experience in handling precisely such legal disputes. If you find yourself in a similar situation and are considering a judicial review, write to us at consultation@arws.cz.

Practical Examples from Our Experience

To make it clear how these principles are applied in reality, let's go through a few typical situations that the lawyers at the Prague-based law firm ARROWS handle regularly.

Case 1: Merging units – A unit owner wants to structurally connect and legally merge two adjacent apartments they own. Even though both units belong to them, the change affects the definition of units in the building and usually also the co-ownership shares of all other owners. According to Section 1169, this requires the consent of the affected owners and the consent of a majority of votes of all owners.

Case 2: Changing the method of contributing to building management – It is discovered in a building that the current ratio of contributions (e.g., per person instead of per share) is unsuitable. The Association of Unit Owners wants to change the rules in the owner's declaration. Such a change affects the financial sphere of all owners, as their payment obligations are changing. Therefore, according to Section 1169(1), the consent of the affected owners is required, which in this case means the consent of all of them.

Case 3: Adding an elevator – A building wants to install an elevator in the stairwell. This means a change to the common areas of the building and their equipment. If the size of the co-ownership shares in the common areas does not change and the interior of the apartments is not affected, the simplified regime is used. Therefore, the consent of a majority of votes of all owners is sufficient, and no individual written consents are needed.

These examples show how the principles collide in practice. The lawyers at the Prague-based law firm ARROWS have experience with precisely these situations and can help clients analyze their specific case.

Decision-Making Framework: How to Proceed Correctly

If you want to avoid legal mistakes and ensure that the amendment to the owner's declaration is legally secure, you need to follow a certain procedure.

Step 1: Precisely identify what is being changed – First, you must precisely define what should be changed in the owner's declaration. Prepare the full text of the amendment. If the proposal is not precise, the Cadastre will not register it. The lawyers at the Prague-based law firm ARROWS will help you prepare a legally correct text.

Step 2: Determine the regime and obtain consents – Will the amendment affect the rights and obligations of the owners? If so (standard regime), secure a written agreement with officially certified signatures from the affected owners. Subsequently (or concurrently), have the amendment approved by the assembly of owners with the required majority.

Step 3: Form of voting – The consent of the owners can be obtained outside the assembly of the Association of Unit Owners, which generally does not have the authority for these amendments. For an amendment to the declaration that requires registration in the Cadastre, it is essential to adhere to the formal requirements of the Cadastral Act for proving consent.

Step 4: Registration in the Cadastre – An amendment to the owner's declaration is effective against third parties only upon its registration in the public register. You must file an application for registration in the Cadastre of Real Estate with the relevant attachments (full text of the declaration, consents of the owners). Without this registration, the amendment does not have full legal effect externally.

The lawyers at the Prague-based law firm ARROWS handle these procedures daily. The insurance coverage of the ARROWS law firm extends up to CZK 350,000,000. If you want to ensure that you are proceeding correctly, write to us at consultation@arws.cz.

Practical Risks and Common Mistakes

In practice, certain mistakes are repeatedly made by both Associations of Unit Owners and individual owners.

Mistake 1: The Association of Unit Owners thinks it decides – However, it is not the Association of Unit Owners as a legal entity (the statutory body) that decides on the amendment of the declaration, but the unit owners themselves. The Association of Unit Owners acts as the administrator of the process. The decision to amend the declaration is not made by the Association of Unit Owners as a legal entity, but directly by the unit owners.

Mistake 2: Insufficient form of consents – For registration in the Cadastre of Real Estate, a simple email or an ordinary signature on an attendance sheet is not sufficient if it concerns an agreement of owners under Section 1169(1). It is necessary to provide a document with officially certified signatures of the affected owners. Underestimating this formality leads to problems during registration.

Mistake 3: Incorrect determination of the regime – When an Association of Unit Owners, in uncertainty, chooses the simplified regime, but in fact, the standard regime should have been used (with the requirement of consent from those affected), the amendment is challengeable for illegality.

Conclusion

The collision between the majority principle and the protection of ownership rights is one of the most complex topics in condominium co-ownership. On the one hand, it is necessary to enable the management of the building; on the other hand, ownership must be protected. The legal system tries to balance these principles, but complex situations arise in practice.

The lawyers at the Prague-based law firm ARROWS know how to navigate these pitfalls safely. If you are unsure whether your planned amendment to the owner's declaration is legally correct, or if you are dealing with a conflict, it is safer to entrust the matter to professionals. Write to us at consultation@arws.cz – we will be happy to help you with a legal analysis.