Amending Declarations of Ownership in Czech Residential Co-ownership

In residential co-ownership, the decision-making of the majority often clashes with the protection of individual rights. When amending a declaration of ownership under Czech law, you must understand your rights as well as the risks of incorrect procedures. Our Prague-based attorneys at ARROWS law firm know how to navigate these complex matters safely to prevent conflicts or the invalidity of changes.

Quick Summary

• The majority cannot decide entirely freely: Amending the owner's declaration is governed by two regimes under Czech law – one with a strict requirement for written consent from affected owners and a simplified one where a majority of votes from all owners suffices.
• Property rights take precedence: If a change affects the rights and obligations of a specific owner in relation to their unit, that owner must explicitly consent in writing – the majority cannot outvote them.
• Judicial review exists but is exceptional: An outvoted owner may seek judicial review in Czech courts, but only if there is an "important reason" and the preclusive period (usually three months) has not expired.

Mgr. Karel Huneš

associate

• hunes@arws.cz

Mgr. Pavel Čech

associate

• pavel.cech@arws.cz

Legal basis: two regimes for amending the declaration

The legal regulation 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; however, interpretational ambiguities still arise in practice. To understand how the process works, it is essential to distinguish between two qualitatively different situations.

Basic regime – Section 1169(1) of the CC applies when an amendment to the declaration affects the rights and obligations of a unit owner in relation to their ownership. Examples include changing the size of the share in common areas or changing the definition of the 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 property rights against the arbitrary will of the majority.

Simplified regime – Section 1169(2) of the CC is used for changes 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 it seems simple, legal practice is more complex. Distinguishing between what affects the "rights and obligations" of an owner and what does not often sparks disputes that end up in court. Our attorneys in Prague at ARROWS law firm can ensure the correct procedure by precisely determining which regime applies to your situation, thus preventing the invalidity of the amendment.

Legal basis and regimes

1. How do I find out if a change falls under the basic or simplified regime?
The key question is: Will there be a factual or legal change to the rights or obligations of a specific owner regarding their unit (e.g., size, accessories, share)? If so, it is the basic regime requiring their consent. If only the general definition of common areas changes without affecting individual shares or exclusive rights, it is the simplified regime.

2. Can owners change these rules in the HOA (SVJ) statutes?
Partially. The statutes can tighten the requirements for the number of votes (quorum) for assembly decisions, but they cannot exclude the statutory requirement for the written consent of the affected owner under Section 1169(1) of the CC, as this concerns the protection of property rights.

3. What happens if the amendment to the declaration is not carried out using the correct procedure?
The amendment may be declared invalid, or the Land Registry may refuse to record the change. An owner whose rights have been violated may seek protection in Czech courts.

The majority principle in residential co-ownership

The majority principle is one of the fundamental pillars of the functioning of a unit owners' association (SVJ) in the Czech Republic. There is a good reason for it: without it, it would be impossible to decide on anything practical in a building with a hundred units. If the consent of all owners were required for every decision, the building would fall into paralysis.

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

However, this principle is not absolute. The Czech legal system contains a number of exceptions and protections that make it difficult for a minority to dominate, but also prevent the tyranny of the majority. One of the most important such protections concerns the amendment of the owner's declaration and the protection of individual property rights.

The majority principle

1. Does this mean I can seek review of every assembly resolution?
No. Judicial review is only possible under strict conditions – you must be an owner who was outvoted (or could not participate), and there must be an "important reason". Standard decisions on routine management are more difficult to review than fundamental interventions such as amending the declaration.

2. What exactly is an "important reason"?
This is a legal concept that Czech courts interpret individually. It could involve a breach of the law, a significant breach of the statutes, or a situation where the decision would lead to disproportionate harm to the owner. ARROWS attorneys can help you assess whether your case meets these criteria.

3. Am I bound by a decision I ignored?
Yes. If you did not participate in the voting and do not prove a serious reason for your absence (which would have prevented you from exercising your right), the decision is binding upon you. Passivity does not exempt an owner from the obligation to submit to the majority decision.

Protection of property rights: limits of the majority

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 property rights as one of the fundamental rights. This leads to a logical conclusion: neither the owners' association nor the majority of owners can restrict an individual's property rights without a legitimate reason and without following the statutory procedure.

This protection is applied most strictly in the context of amending the owner's declaration. If a change affects the rights and obligations of a specific owner – e.g., if part of their unit is taken away, or if their share in the common areas changes – 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, changing the definition of a unit (e.g., attaching part of a hallway to an apartment), or changing the ratio of contributions for building management if specified in the declaration differently than by shares. In all these cases, the consent of the affected owner is required under Czech legislation.

This model creates a certain asymmetry: while routine decisions regarding building management are made according to the majority principle, decisions affecting the essence of ownership require the consent of the affected persons. Our attorneys in Prague commonly resolve situations where these two principles clash.

Protection of Ownership Rights

1. What exactly does "written consent" mean?
For the purposes of amending a declaration to be recorded in the Cadastral Register, a simple email is insufficient. Ideally, it must be a document signed by the owner that meets the requirements for filing with the Czech Land Registry.

2. If an owner refuses to consent, is the change impossible?
Under the standard regime (where their rights are affected), yes – if the affected owner refuses, the change cannot be enforced against their will unless their refusal constitutes a manifest abuse of right (which is very difficult to prove). Under the simplified regime (Section 1169, Paragraph 2 of the Civil Code), they may be outvoted.

3. What are the consequences if the procedure was carried out without proper consent?
The change is invalid (relative or absolute invalidity depending on the nature of the defect) and the Cadastral Office should not record it. If the record is nevertheless made, one may seek a determination of invalidity and correction of the legal status in Czech courts.

Conflict in Practice: Majority versus the Individual

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

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

According to Czech legislation, the answer is no. This is a change that interferes with the rights and obligations of the unit owner (a reduction of their exclusive ownership). Such an owner has the right to provide written consent for such a change.

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

Our Czech legal team resolves these practical dilemmas. It is often not clear at first glance whether a specific change truly "interferes" with an individual's rights with the intensity required for their consent. Our attorneys in Prague assist clients with this assessment, which is crucial in such cases.

Judicial Review: How an Outvoted Owner Defends Themselves

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

Most importantly, judicial review is tied to the existence of a "serious reason." The court examines whether the assembly's decision is in conflict with the law or the articles of association and whether it disproportionately interferes with the owners' rights.

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 from the adoption of the decision). This deadline is preclusive – missing it results in the termination of the right to review.

The court with subject-matter jurisdiction for disputes arising from residential co-ownership in the first instance is 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 incorrect court can lead to unnecessary delays.

The Prague-based attorneys at ARROWS have extensive experience in handling such litigation in Czech courts. If you find yourself in a similar situation and are considering judicial review, write to us at office@arws.cz.

Questions on Judicial Review

1. What is meant by a "serious reason"?
This is an undefined legal concept. Case law suggests it is a matter that substantially affects the rights of the petitioning owner or the functioning of the association. Common disagreements over the color of the facade usually do not meet this threshold, but an amendment to the owner's declaration does.

2. What are the prospects for success?
This depends on the specific circumstances. If there has been a violation of Section 1169, Paragraph 1 of the Civil Code (absence of consent from the affected owner), the chances of success are high.

Practical Examples from Practice

To clarify how these principles are applied in reality, let's look at several typical situations that our Prague-based attorneys commonly handle.

Case 1: Merging units – A unit owner wants to structurally connect and legally merge two adjacent apartments they own. Even though both units are theirs, the change affects the definition of units in the building and usually 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 contribution ratio (e.g., per person instead of per share) is unsatisfactory. The SVJ wants to change the rules in the owner's declaration. Such a change affects the financial sphere of all owners because their payment obligations change. Therefore, under Section 1169, Paragraph 1, the consent of the affected owners is required, which in this case means the consent of everyone.

Case 3: Elevator Extension – The building owners wish to install an elevator into the stairwell. This constitutes 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 there is no interference with the interior of the apartments, a simplified regime applies under Czech law. In such cases, a majority vote of all owners is sufficient, and individual written consents are not required.

These examples demonstrate how legal principles can clash in practice. Our attorneys in Prague at the ARROWS law firm have extensive experience with these specific situations and can assist clients with an analysis of their particular case.

Decision-making framework: how to proceed correctly

To avoid legal errors and ensure that an amendment to the declaration of ownership is legally secure under Czech legislation, a specific procedure must be followed.

Step 1: Precise identification of the change – First, you must precisely define what should be changed in the declaration of ownership. Draft the full wording of the amendment. If the proposal is not precise, the Czech Land Registry will not record it. Our Prague-based attorneys at ARROWS law firm will help you prepare a legally correct text.

Step 2: Determining the regime and obtaining consents – Does the change affect the rights and obligations of the owners? If so (the basic regime), ensure a written agreement with officially verified signatures of the affected owners. Subsequently (or concurrently), have the change approved by the assembly of owners by the required majority.

Step 3: Form of voting – The consent of the owners can be obtained outside of the Unit Owners Association (SVJ) assembly, which generally does not have the jurisdiction for these changes. For an amendment to the declaration that requires entry into the Land Registry, it is essential to adhere to the formal requirements of the Czech Cadastral Act regarding the proof of consent.

Step 4: Registration in the Land Registry – An amendment to the declaration of ownership is effective against third parties only upon registration in the public register. You must submit an application for entry into the Czech Land Registry with the relevant attachments (the full text of the declaration, owners' consents). Without this registration, the change does not have full legal effect externally.

Our Czech legal team at ARROWS law firm handles these procedures daily. The professional indemnity insurance of ARROWS law firm reaches up to CZK 400,000,000. If you want to ensure that you proceed correctly, write to us at office@arws.cz.

Practical risks and common mistakes

In practice, certain mistakes are repeatedly made by both Unit Owners Associations (SVJ) and individual owners in the Czech Republic.

Mistake 1: The SVJ believes it makes the decision – However, an amendment to the declaration is not decided by the SVJ as a legal entity (the statutory body), but by the unit owners themselves. The SVJ merely acts as the administrator of the process. The decision on the amendment is not made by the SVJ as a legal entity, but directly by the unit owners.

Mistake 2: Insufficient form of consents – For registration in the Czech Land Registry, a simple email or a standard signature on an attendance list is not enough if it concerns an agreement of owners under Section 1169, Paragraph 1 of the Czech Civil Code. It is necessary to provide a document with officially verified signatures of the affected owners. Underestimating this formality leads to problems during the registration process.

Mistake 3: Incorrect determination of the regime – If an SVJ chooses the simplified regime due to uncertainty, but the basic regime should have been used (requiring the consent of those affected), the change is contestable for illegality under Czech law.

Conclusion

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

Our attorneys in Prague at ARROWS law firm know how to safely navigate these pitfalls. If you are unsure whether your planned amendment to the declaration of ownership is legally correct, or if you are dealing with a conflict, it is safer to entrust the matter to professionals. Write to us at office@arws.cz – we will be happy to assist you with a legal analysis.

FAQ – Most frequent legal questions regarding amendments to the declaration of ownership

1. Is it possible to change the declaration of ownership if not all owners agree?
Yes, in the simplified regime, a majority of votes from all owners is sufficient. In the basic regime (interference with rights), the consent of the affected owners is required; if only one owner is affected, the others do not need to consent (a majority suffices), but the affected owner must agree.

2. How much time do I have to challenge an amendment to the declaration of ownership?
As an outvoted owner, you generally have three months from the moment you learned (or could have learned) of the decision. After this period, the right to judicial review in Czech courts expires.

3. Must the written consent be officially verified?
For the purposes of registering the change in the Czech Land Registry, yes. The Cadastral Office requires officially verified signatures on the document amending the declaration.

4. What happens if a change was registered in the Land Registry without the correct legal procedure?
Such a change can be challenged by a lawsuit. A Czech court may rule on its invalidity, and subsequently, the entry in the Land Registry will be corrected. We recommend resolving such a situation with a lawyer as soon as possible. Contact us at office@arws.cz.

5. Can the SVJ committee decide on an amendment to the declaration of ownership on its own?
No. Amendments to the declaration are decided by the unit owners.

“Disclaimer: The information contained in this article is for general informative purposes only and serves as a basic guide to the issue. Although we ensure maximum accuracy of the content, legal regulations and their interpretation evolve over time. To verify the current wording of regulations and their application to your specific situation, it is essential to contact ARROWS law firm directly (office@arws.cz). We bear no responsibility for any damages or complications arising from the independent use of information from this article without our prior individual legal consultation and professional assessment. Every case requires a tailor-made solution, so do not hesitate to contact us.”

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