The condominium’s invoices are paid out of the cash built up from everyone’s advances. An unpaid charge therefore does not fall on the syndic (the managing agent): it falls on the other co-owners, and it can put a maintenance contract or the building’s insurance at risk. That is why the Law gives the syndicat de copropriété (the co-owners’ association) real remedies.
Default interest
Unless the règlement de copropriété (the condominium regulations) provides otherwise, sums due by way of advances bear interest for the benefit of the association. That interest, set at the statutory civil rate, runs from the formal demand sent by the syndic to the defaulting co-owner (article 26 of the Grand Ducal Regulation).
The statutory mortgage over the unit
This is the most powerful security. The association’s claims of every kind against each co-owner — whether for advances or for final payment — are secured by a statutory mortgage over that co-owner’s unit. It is registered once a formal demand to pay a debt that has fallen due has gone unanswered, and takes its rank from the day of registration (article 24 of the Law).
The syndic has authority to have that mortgage registered for the benefit of the association and may, once the debt is extinguished, release it and apply for its removal from the register without any involvement of the general meeting. The co-owner concerned may, even where substantive proceedings are pending, apply to the president of the district court for a full or partial release, on condition of a sufficient offer of payment or an equivalent security. Finally, no registration or further registration may be applied for in respect of claims that have been due for more than five years.
The lien, and its transfer to the rent
These claims also have the benefit of the lien conferred on landlords by article 2102-1° of the Civil Code, over the contents of the premises. Where the unit is let unfurnished, that lien is transferred to the rent owed by the tenant (article 24). A letting co-owner in default is therefore exposed on their rental income as well.
Proceedings, without prior authorisation
As a rule, the syndic may not bring proceedings in the association’s name without being authorised to do so by the general meeting. But the Law expressly carves out the recovery of a debt, including by enforcement: no authorisation is then required (article 14). Recovery therefore does not wait for the next meeting.
And if the unit is sold
On a transfer of a unit for value, if the seller has not produced to the notary a certificate from the syndic less than one month old confirming that they are free of all obligations towards the association, the buyer must give notice of the transfer to the syndic by registered post with acknowledgement of receipt. The syndic may then, within eight days of receiving that notice, lodge an objection to the release of the funds in order to obtain payment of the sums still owed by the former owner. The buyer is also jointly and severally liable with the seller for the charges still outstanding in respect of the closed financial year and of the elapsed months of the current one (article 25).
The costs
Reminder, recovery and legal costs are borne by the defaulting co-owner, on the terms laid down in the syndic’s mandate as voted by the meeting and in the meeting’s decisions. They are added to the debt and the interest: one of the reasons why arrears dealt with early cost a great deal less.
If you cannot meet a call for funds, write to us before the due date rather than after the formal demand. Payment by instalments is often possible; it must be put in writing, and it is not a write-off of the debt. Silence, by contrast, leads mechanically to escalating costs.
If you see arrears building up in your building
The statement of debts and receivables is sent to you with the accounts before the meeting (article 5 of the Grand Ducal Regulation), and the conseil syndical (the co-owners’ supervisory board) can examine the detail. The level of arrears is the most telling indicator of a condominium’s health: if it is rising, that is an item to place on the agenda. Let us discuss it.
General information on Luxembourg condominium law (the amended Law of 16 May 1975 and the Grand Ducal Regulation of 13 June 1975, in their consolidated version applicable as at 1 August 2023). Your own règlement de copropriété may lay down specific rules, which prevail within the limits set by the law. This content is not legal advice.