Co-ownership in difficulty: intervention of a temporary administrator

Verified 12 April 2024 - Directorate for Legal and Administrative Information (Prime Minister)

Trustee of general interest

Published on 17 April 2024

The law of 9 april 2024 establishes the creation of a trustee of collective interest to intervene in condominiums in difficulty.

An implementing decree must be issued.

Our page will be updated as soon as this text is published.

Is your condominium in serious financial difficulty or is the condominium union no longer able to ensure the conservation of the building? A temporary administrator may be appointed by a judge to take the necessary steps to restore the normal functioning of your condominium. We are taking stock of the regulations.

A condominium is said to be “in difficulty” in any of the following :

  • The financial balance of the joint owners' union is seriously compromised
  • The condominium union is unable to keep the building in good condition

In this case, the use of a provisional administrator is necessary.

The following people can enter the president of the court of jurisdiction of the location of the immovable to appoint a provisional administrator:

The President of the Court of Justice shall give its decision on the merits in accordance with the accelerated procedure (in interlocutory) or on request. L'subpoena is issued to the syndicate of co-owners.

The interim administrator shall be appointed by order of the President of the Judicial Tribunal.

The President of the Judicial Tribunal shall determine the duration and the extent of the provisional administrator's duties. This duration isone year minimum.

The remuneration of the temporary administrator is fixed and varies according to the number of lots in the condominium. But when the co-ownership consists of 500 lots or more, the full remuneration of the interim administrator is fixed by the judge on the basis of the costs incurred and the missions accomplished.

Warning  

If the liquidator has not applied to the judge for the appointment of a ad hoc trustee, the president of the court may charge all or part of the costs of the provisional administration to the liquidator.

The order shall be notified to the joint owners within one month of its delivery.

The provisional administrator may be a judicial administrator, a natural person (an individual), a legal person with particular experience or qualification or the ad hoc representative if appointed under the preventive measures.

The existing trustee cannot be appointed as the interim administrator of the condominium.

Warning  

the interim administrator must be independent of the trustee, the co-owners' union and the creditors (no financial link, advice, subordination and no interest in the mandate). The interim administrator cannot be appointed trustee of the condominium within 5 years of the end of his assignment.

Within one month of being appointed, the interim administrator shall notify the joint owners of the appointment by one of the following means:

  • Discount against sign-in
  • Registered letter with notice of receipt
  • E-mail

The interim administrator must attach a copy of the order that designated him or her.

A copy of the designation order is also sent by the registry of the judicial court to the public prosecutor, the prefect, the mayor of the commune and the president of the municipalityEPCI: titleContent .

The President of the Judicial Tribunal may, at any time, modify the remit of the interim administrator, extend it or terminate it at the request of the interim administrator.

Scope of missions

The provisional administrator shall be responsible for taking the necessary measures to restore normal operation co-ownership.

Please note

A provisional administrator may also be appointed for liquidate the debts of the condominium in the event of expropriation or dissolution of the trade union.

To carry out his duties, the President of the Judicial Tribunal entrusts him all powers of the joint-ownership trustee and all or part of the powers of the general meeting of the co-owners and the trade union council.

The Trustee's Mandate cease automatically and without compensation.

The trade union council and the general meeting of the co-owners, convened and chaired by the interim administrator, continue to exercise the other functions powers that would not be included in the duties of the interim administrator.

The decision-making of the interim administrator requires the prior advice of the union council, except as a matter of urgency.

The interim administrator may also summon the co-owners to inform and hear them.

The interim administrator must specify the funding method for the implementation of the planned decisions.

The interim administrator shall personally carry out the task assigned to him. However, where the proper conduct of the mission so requires, he may be assisted by a third party appointed by the President of the Judicial Tribunal on his proposal and paid from his remuneration.

In addition, the condominium trustee must provide the interim administrator with all the documents necessary for the accomplishment of his mission. The transmission of these documents must be made within 15 days of the notification of the judge's order to the trustee.

As soon as the interim administrator makes a decision on the condominium, the interim administrator must indicate it on the register of minutes of general meetings. It must also send a copy of the decision(s) to each co-owner, with the corresponding call for funds if necessary, by one of the following means:

  • Registered letter with notice of receipt
  • Discount against sign-in
  • E-mail

Mission Report

The administrator shall report on his work in a mission report transmitted to the President of the Judicial Tribunal, at his request, at least once a year.

This document must indicate all the measures to be taken to rectify the financial situation of the condominium.

The administrator can also forward a pre-report of mission to the President of the Judicial Tribunal.

The provisional administrator must file his report with the registry of the court, which sends a copy to the public prosecutor, to the trustee of co-ownership, to the president of the trade union council when there is one or in his absence, to each of the members of the trade union council. If the prefect, the mayor of the commune, the president of theEPCI: titleContent upon request, the registry of the tribunal must also send them a copy of the interim administrator's report.

These people have no later than 2 months after receipt of copy of report of the provisional administrator for their comments. These observations must be transmitted to the Registry of the Judicial Tribunal, which communicates them to the President of the Judicial Tribunal and to the Provisional Administrator.

If no report has already been prepared by a ad hoc trustee under a preventive procedure in the previous year, the interim administrator shall, no later than the end of the first six months of his mission, submit an interim report setting out the measures to be adopted to redress the financial situation of the syndicate of co-owners.

The trustee must inform each co-owner the possibility of view report mission, at its office or at any other place fixed by the general meetingduring working hours within one month of the submission of the report.

This information should be provided to them by one of the following means :

  • Registered letter with notice of receipt
  • Discount against sign-in
  • E-mail

An excerpt from the report may be attached to the mail.

A copy of the report may be given to any co-owner who so requests and at his own expense, including by electronic means.

If the conclusions of the report recommend that certain matters be submitted to the general meeting of the co-owners, they must be included on the agenda of that meeting or of a general meeting specially convened for that purpose.

The appointment of the interim administrator has the following consequences:

  • Suspension of the liability of debts prior (excluding public or corporate debt) for a period of 12 months (or up to 30 months at the request of the provisional administrator)
  • Interruption or prohibition of legal actions by all creditors seeking to order the debtor union to pay a sum of money or to terminate a contract for failure to pay a sum of money
  • Termination or prohibition of enforcement proceedings by such creditors or of distribution proceedings (foreclosure proceedings) which did not have an attributive effect before the appointment of the provisional administrator
  • Suspension of contractual provisions providing for surcharges or penalties for delay and automatic termination of the contract
  • Suspension of repayments of a collective loan

Warning  

No Execution Procedure as of april 11, 2024of any kind on the sums paid to the Caisse des Dépôts et Consignations by the administrator in the exercise of his or her term of office as interim administrator shall not be admissible.

Within 2 months of its designation, the provisional administrator shall take publicity measures to enable creditors to produce the information necessary to assess the amount of their claims.

Creditors have 3 months to report their debts from the appointment of the administrator.

The declaration of claim shall be made to the administrator by registered letter with acknowledgement of receipt. It shall contain the following particulars:

  • Identity of the creditor and contact details of the person representing him
  • Amount of the debt due on the date of the Director's designation order
  • Any evidence capable of proving the claim
  • Method of calculating interest
  • Nature of any security attached to the claim
  • Indication of the court seised if the claim is the subject of a dispute

Claims relating to a contract of employment do not have to be declared (e.g. back wages of the guardian).

The provisional administrator shall verify the claims declared and draw up a list of those claims and their amounts and deposit it at the Registry of the Court. The Clerk shall cause to be published in the Bodacc: titleContent an insertion to indicate this deposit.

Creditors have 2 months from the publication of the list to challenge its contents to the president of the court.

Claims not reported on time shall not be enforceable against third parties (unless the creditor demonstrates that the non-declaration is not his fault).

A draft timetable shall be notified by registered letter with notice of receipt to creditors who have 2 months on the basis of the notification to submit their comments.

This document shall include the overall schedule and the detailed schedule for the creditor concerned.

Reminder

No Execution Procedure as of april 11, 2024of any kind on the sums paid to the Caisse des Dépôts et Consignations by the administrator in the exercise of his or her term of office as interim administrator shall not be admissible.

The Interim Administrator shall deposit the final clearance plan (final payment schedule) to the court registry for certification by the judge.

The plan shall contain the following information:

  • Statement of debts (declared and not recoverable)
  • Forecast cash flow of the union over the duration of the plan (including expenses necessary to preserve the building and possibly to reduce expenses and to comply with the plan)
  • Timeline for calls for funds from co-owners
  • Detailed schedules by creditor

Certain documents must be attached as an annex:

  • List of works necessary for the financial recovery of the condominium and the preservation of the building
  • Indicative list of management measures and friendly or litigation procedures envisaged
  • Comments of the trade union council and creditors
  • Co-owners' unpaid bills detail report
  • Inventory of goods that can be sold
  • Draft enhanced provisional administration agreement if it exists

The final clearance plan submitted to the judge may not exceed 5 years. It must be notified to all creditors, the trade union council and each co-owner by one of the following means:

  • Registered letter with notice of receipt
  • Discount against sign-in
  • Electronic channel

If the financial situation of the condominium does not allow the necessary works to be carried out for the conservation and safety of the building, the protection of the occupants, the preservation of their health and the reduction of the condominium charges allowing its financial recovery, the judge may place the building under enhanced interim administration.

The request for placement under enhanced provisional administration may be requested by:

  • Mayor of the municipality of the location of the building
  • President of theEPCI: titleContent housing authority
  • Prefect
  • Or interim administrator already appointed.

The applicant must draw up a file setting out the reasons for the request for placing under enhanced provisional administration and the public support and accompanying measures mobilized to ensure the success of the procedure.

In the context of the enhanced provisional administration, the judge authorizes the provisional administrator to enter into a fixed-term agreement, on behalf of the co-owners' union, with one or more operators competent in the field of project management and the development of financing for works operations.

The judge's decision shall be notified to the following persons:

  • Interested parties
  • Mayor of the municipality
  • President of theEPCI: titleContent
  • Prefect

The agreement with the operator shall provide in particular for:

  • List of legal, financial and technical studies necessary to define the content of the work and to make the resulting technical choices
  • Estimated timetable for studies, choice of service providers and work
  • Nature of the work envisaged
  • Associated forecast financial envelope
  • Etc.

The judge approving the convention concluded between the operator and the interim administrator.

The execution of the agreement may continue even if the interim administrator's assignment is completed.

The agreement shall expire on the expiry of the term fixed by it.

Please note

The mayor of the municipality or the president of theEPCI: titleContent may engage at any time the procedure for declaring the absence of the condominium. The conclusion of the agreement is then suspended pending the judge's decision, but the interim administrator's mission continues.

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