The management of extraordinary maintenance costs in a condominium can generate legal disputes, especially when the required regulations are not followed.
What happens if the condominium meeting approves a large expense without establishing the mandatory special fund?
An emblematic case is the one dealt with by the Court of Cassation with the order of 5 April 2023, n. 9388, which sanctioned the nullity of a meeting resolution due to the failure to establish this fund. This decision raised important questions on the legitimacy of condominium resolutions and the protection of the rights of individual condominium owners.
This article will delve into the details of the case and the legal implications of the Supreme Court's decision.
The case
The case in question concerns an owner of a property located in a condominium who received an injunction for the payment of approximately 2,600 euros as expenses for the extraordinary maintenance of the facades and balconies, as resolved by the condominium assembly in September of 2017.
The owner opposed the measure, objecting to the nullity of the meeting resolution because, despite approving extraordinary works for approximately 487 thousand euros, did not provide for the establishment of the special mandatory fund, as provided for by article no. 1135 c. 1 no. 4 cc
For extraordinary maintenance works and innovations, mandatorily establishing a special fund of an amount equal to the amount of the works (3); if the works must be carried out on the basis of a contract which provides for gradual payment based on their progressive state of progress, the fund can be established in relation to the individual payments due;
The judge of first instance accepted the objection of nullity raised by the owner, declaring the resolution null and void for the failure to provide the special fund, as required by art. 1135 c. 1 no. 4 cc
The decision was appealed, taking the matter all the way to the Court of Cassation. The Supreme Court confirmed the nullity of the resolution, underlining that the prior preparation of the special fund is an essential condition of validity for resolutions relating to extraordinary maintenance works.
The Supreme Court ruling
The Court of Cassation, with order dated 5 April 2023, n. 9388, established that the condominium resolution approving extraordinary maintenance works without the creation of the special fund is null and void. The reference standard is art. 1135 c. 1 no. 4 of the Civil Code, which obliges the assembly to establish a special fund to cover extraordinary expenses.
This fund can have an amount equal to the amount of the works or be established in relation to the individual payments due, if the works are to be carried out on the basis of a contract which provides for gradual payment based on their progressive state of progress.
The provision was introduced by the condominium reform law (law 220/2012), which modified the original text of the article, making the establishment of the fund mandatory.
Subsequently, Legislative Decree 145/2013 provided that the special fund does not necessarily have to be of an amount equivalent to the cost of the works but can be set up in relation to the individual payments due.
The Supreme Court ruling is clear in underlining that the prior preparation of the special fund is a condition of validity of the resolution approving the works.
The failure to establish this fund not only makes the resolution null and void, but also protects the collective interest of the condominium in the correct functioning of financial management and the interest of the individual condominium owner in avoiding the risk of having to guarantee creditors the payment due from defaulting condominium owners .
Furthermore, the Court of Cassation recalled that in the case of opposition to an injunction for the collection of condominium contributions, the judge can review both the nullity (deduced by the party or revealed ex officio) of the resolution underlying the injunction, and the annulability thereof. The nullity of the contested resolution can be detected ex officio or examined upon a party's objection also by the appeal judge, as happened in the case under scrutiny.
