OGH on the Formation of Will in Owners’ Associations

Jul 14, 2023 Benn-Ibler Rechtsanwälte

The formation of will in an owners’ association may also consist of an act of will by the dominant majority owner, according to the Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH). A prescription by the dominant majority owner (‘dominator’) or the administrator on the basis of an act of will is binding for the other owners.

The defendant was a co-owner of a property in a residential building. The remaining shares in the property were owned in equal parts by the co-owners, a married couple. On the initiative of the two owner-partners, an owners’ meeting was held to discuss the organisation of the administration. The owners present (the co-owners) decided that no administrator should be appointed. The wife had authorised her husband to represent her in matters relating to the management of the common property. In a subsequent letter, the husband informed the defendant of the need for renovation work and of the intention to finance the projects by means of a special advance. The defendant then received a special advance. However, this was not preceded by a resolution of the co-owners. The plaintiff couple is now seeking payment of the amount of the advance.

The plaintiffs argued that the community of owners was represented by the majority of homeowners, calculated on the basis of co-ownership shares. The defendant argued that the renovations proposed by the plaintiff were not necessary.

The issue to be resolved was whether an administrative measure that was not based on a decision taken at a general meeting or in any other way, but on an exercise of the will of the majority of the owners (‘dominator decision’), could be valid at all.

The OGH ruled: The formation of the will in a community of owners can also consist of an act of will by the dominant majority owner. However, if a notice triggering a time limit is issued, a minority owner can challenge this decision under the law on resolutions.

The imposition of reserve contributions by the dominant majority owner on the basis of a resolution that can no longer be challenged is therefore binding on the unit owners.

OGH 5 Ob 12/23k (18 April 2023)