Challenging a housing association resolution – when and how can it be overturned?

Who can challenge a resolution of the housing community?

Any owner of a flat located in a building, regardless of whether the flat is residential or commercial, i.e. used for business purposes, may challenge a resolution of the housing community. It is sufficient to hold the title to the flat.

It is also worth noting that, in accordance with Article 1a of the Act Polish on Ownership of Premises, the term ‘owner’ also includes a co-owner holding a fractional share; therefore, if spouses hold shares in a property, each of them is entitled to bring an action to set aside a resolution of the housing community.

Every owner of a flat has standing to challenge a resolution of the housing community, regardless of whether they voted ‘for’ the resolution, ‘against’ the resolution, abstained, or did not take part in the vote at all. This is because the right to challenge a resolution is linked solely to the right of ownership of the flat, and not to any other circumstances.

Who cannot challenge a resolution of the housing community?

Tenants or persons residing with the owner of the premises, e.g. a member of the owner’s family, do not have the right to challenge a housing association resolution.

What is the time limit for challenging a resolution of the housing community?

The deadline for challenging a resolution of the housing community is 6 weeks from the date the resolution was adopted at a general meeting of owners or from the date the claimant (i.e. the owner of the premises) was notified of the content of the resolution adopted by individual collection of votes (Article 25(1)(a) of the Act Polish on Ownership of Premises).

In practice, this means that if a flat owner attended a meeting of owners (or voted via a proxy) at which a resolution was passed that they wish to challenge, they have six weeks to bring an action before the Polish court. The six-week period is a so-called ‘strict’ time limit, and therefore its expiry (i.e. filing the claim after six weeks) results in the right to challenge the housing community’s resolution lapsing.

However, where the time limit expires through no fault of the party bringing the action, and the failure to meet the deadline results in adverse procedural consequences for that party, the party may avail themselves of the institution of reinstatement of the time limit (Article 168 § 2 of the Polish Code of Civil Procedure). However, this is, as a rule, a right available only in exceptional circumstances, and in each case it must be carefully verified whether the conditions for invoking this mechanism have been met.

When can a housing community resolution be challenged?

A housing community resolution may be challenged if:

• the housing community resolution is contrary to the law,
• the housing community resolution is contrary to the agreement between the flat owners,
• the housing community resolution infringes the interests of a flat owner, including by breaching the principles of proper property management, or infringes the owner’s interests in any other way.

In practice, there are often not just one but several grounds for challenging a resolution of the housing association, for example, a breach of the law or a breach of the agreement between the flat owners. In such situations, the claimant (the flat owner) has a better chance of having the resolution overturned.

When can a housing community resolution be overturned on the grounds of a conflict with the law?

A housing community resolution may be overturned on the grounds of conflict with the law where the content of the resolution is inconsistent with mandatory provisions of Polish law, in particular the Act Polish on Ownership of Premises and the Civil Code.

A conflict with the law may arise not only from the content of the resolution itself, but also from defects in the procedure leading to the adoption of the resolution, i.e. the voting process by the members of the housing community. Importantly, formal objections regarding a flawed vote on a resolution may constitute grounds for its annulment only if the procedural defect had, or could have had, an impact on the content of the resolution. In practice, this means that the non-compliance was sufficiently significant to render the content of the resolution contrary to the law or the agreement between the flat owners, or to breach the principles of proper management of the common property, or otherwise infringe upon the interests of a flat owner.

Examples of situations where a resolution of a housing community was set aside due to a conflict with the law included:

• a resolution prohibiting the sale of alcoholic beverages with an alcohol content exceeding 18% by volume (judgment of the Regional Polish Court in Olsztyn, 1st Civil Division, dated 30 September 2021, case no. I C 20/21). This issue is discussed in greater detail in the publication “The obligation to obtain the housing community’s consent for the sale of alcohol”, where we also analyse other rulings concerning housing community resolutions regarding consent for the sale of alcohol;

• a resolution granting consent to cut off the hot water supply to a flat whose owner is in arrears with payments (judgment of the Polish Court of Appeal in Kraków, 1st Civil Division, dated 16 June 2020, case no. I ACa 84/20). In its ruling, the Polish Court held that a housing community cannot independently decide to disconnect the supply of any utilities to individual premises, and that powers in this regard are limited to the entities specified by law;

• a resolution approving the financial statements and granting discharge in a situation where the financial statements have not been properly prepared (judgment of the Regional Polish Court in Wrocław, 1st Civil Division, dated 29 November 2013, ref. no. I C 710/11);

• a resolution establishing a retroactive advance payment towards the costs of managing the common property for previous years by adopting unlawful ‘Rules for the settlement of hot water and central heating charges’ (judgment of the Polish Court of Appeal in Szczecin, 1st Civil Division, of 22 April 2020, ref. no. I ACa 67/20).

When can a resolution of a housing community be repealed on the grounds of conflict with the agreement between the owners of the premises?

A resolution of a housing community may be set aside on the grounds of conflict with the agreement between the owners of the premises, i.e. the agreement specifying the manner of managing the common property, in a situation where the resolution is disadvantageous to the claimant from a personal or economic point of view, or is intended to prejudice a member of the community.

A resolution may be deemed prejudicial if the intention to cause harm existed at the time the resolution was adopted, or if the content of the resolution meant that its implementation resulted in harm to the flat owner after the resolution was adopted.

Interestingly, case law indicates that a violation of the principles of proper management of the common property may also constitute grounds for challenging a housing community resolution, bearing in mind the overriding objective of the housing community, which is to maintain the property in a condition that is at least not deteriorated and to manage it efficiently, as well as the appropriateness, reliability and cost-effectiveness of the resolution adopted.

In this situation, the owner’s interests therefore coincide with the purpose of the housing association.

Examples of situations where a housing association resolution has been overturned on the grounds that it contravened the agreement:

• a resolution which obliged the owner of a flat to bear the costs of damage that might potentially be caused in the future by persons for whom they are not responsible (judgment of the Regional Polish Court in Wrocław, 1st Civil Division, of 14 July 2014, case no. I C 445/14);

• a resolution on the designation and allocation of parking spaces within the housing community, which allocated parking spaces in a manner blocking access routes (judgment of the Regional Polish Court in Warsaw, 3rd Civil Division, dated 25 June 2018, case no. III C 1638/17);

• a resolution obliging the owner of a flat to notify the community’s management board of the letting or leasing of the flat, specifying the lessee or tenant (judgment of the Regional Polish Court in Wrocław, 1st Civil Division, of 24 April 2013, case no. I C 1678/12).

When can a resolution of a housing community be set aside on the grounds of a breach of the flat owner’s interests?

A resolution of a housing community may be revoked on the grounds of a breach of the premises owner’s interests where the resolution is, from a personal or economic point of view, disadvantageous to the complainant.

Resolutions passed by housing communities often concern the operation of commercial premises where business activities are carried out, such as shops or catering establishments. An analysis of case law in such matters leads to the conclusion that it is impossible to define unequivocally what exactly constitutes the ‘interests of the premises owner’. A breach of the owner’s interest is therefore a matter subject to objective assessment and is evaluated, amongst other things, in the light of the principles of social coexistence. Consequently, it is impossible to draw up a list of resolutions that can be deemed to breach the owner’s interest at all times.

In practice, however, such resolutions restrict, hinder, and sometimes even effectively prevent the conduct of business by introducing bans on specific types of activity, restrictions on the premises’ operating hours, the manner of using the building’s common areas, or customer access to the premises.

It should be borne in mind that practically any resolution obliging a member of the housing community (the owner of the premises) to take any practical action, even to a minimal extent, may infringe upon their interests. The purpose of the provision allowing a resolution of the housing community to be challenged is therefore to counteract actions by the majority of the community’s members that are formally lawful but cannot be regarded as rational (see: judgment of the Polish Court of Appeal in Katowice, 1st Civil Division of 6 March 2015, case no. I ACa 854/14).

Importantly, a resolution may be deemed to infringe upon the interests of a flat owner even where the intention to prejudice a member of the housing community was not the basis for its adoption, but its content meant that its implementation led, or could hypothetically lead, to the prejudice of a specific flat owner.

Summary

Challenging a housing community resolution is an important means of protecting the rights of flat owners where the community’s decisions breach the law, the flat owners’ agreement or the individual interests of a flat owner. Every flat owner has the right to bring an action, regardless of how they voted on the resolution. However, this right does not extend to tenants or persons actually using the premises without title. It is of key importance to observe the statutory time limit of 6 weeks from the date of the resolution’s adoption or notification of its content, and this time limit is strict.

A resolution may be successfully challenged in particular where:

• it contravenes mandatory provisions of law,
• it conflicts with the agreement between the flat owners governing the management of the property,
• it infringes the interests of a flat owner or the principles of proper management of the common property.

In practice, these grounds often occur in combination, which increases the likelihood of the claim being upheld. The Polish court examines both the content of the resolution and the procedure by which it was adopted, provided that procedural irregularities may have influenced the outcome of the vote.