After a major incident, two questions arise, in this order: what is decided, and what becomes of the insurance money? The Law answers both, and does so in a way that is quite protective of the condominium.
The decision to rebuild or to reinstate
“In the event of total or partial destruction, the general meeting of co-owners may decide by a majority of the votes of the co-owners to rebuild the building or to reinstate the damaged part.” (article 32 of the Law).
Co-owners who contribute to the maintenance of the buildings that suffered the damage must contribute to the cost of the works in the same proportions and according to the same rules.
One case where reinstatement is compulsory
The Law protects those in the minority who suffer the loss: “Where the destruction affects units representing less than half of the votes of all the co-owners whose private parts make up the damaged building, reinstatement is compulsory if a majority of the co-owners affected request it.” (article 32). A building’s majority cannot, therefore, leave a handful of damaged units to their fate.
The compensation is earmarked
This is the essential point, and a reassuring one: “Where the association decides to rebuild, the sums representing the destroyed building shall, subject to the rights of registered creditors, be applied as a priority to the rebuilding or the repair, and payments in discharge may be made only on production of supporting documents.” (article 32).
The insurance money cannot, therefore, be spent on anything else, and it is released as the supporting documents for the works come in. Where the sums are not applied to the rebuilding or repair of the insured building, they are applied to paying preferential and mortgage claims, according to the rank of each.
If the decision is not to reinstate
“If the decision is taken […] not to reinstate the damaged building, the rights in the condominium are wound up and those co-owners whose unit is not reinstated are compensated.” (article 33). The exit is therefore not a dispossession: it is an organised process.
Your right to compensation while works are under way
This is a little-known and often useful provision. “Co-owners who suffer loss as a result of the carrying out of the works, by reason either of a permanent reduction in the value of their unit, or of serious interference with their enjoyment of it, even if temporary, or of damage, are entitled to compensation.” (article 31 of the Law).
That compensation is payable by the co-owners as a whole. It is apportioned:
- for works resolved upon under article 26: in proportion to each co-owner’s contribution to the cost of the works;
- for the additional-storey works under article 30: according to the initial proportion of each co-owner’s rights in the common parts.
A shop closed for several weeks because of scaffolding, a flat made uninhabitable by building work: these are the situations this provision is aimed at. Have the loss recorded and quantified at the time it occurs.
The other side of the bargain: letting the works proceed
“No co-owner, nor anyone claiming through them, may obstruct the carrying out — even within their own private parts — of works duly and expressly resolved upon by the general meeting” under articles 16 d) and 26 (article 28). The right to compensation and the duty to let the works proceed go together.
Handling a claim file and overseeing the reinstatement works may give rise to remuneration for the syndic (the managing agent), the basis of which is set by the mandate voted by the meeting and, for delegated project management, by the meeting’s decision approving the works. We publish no scale of charges here: ask for the basis applicable to your condominium to be confirmed before the file is opened.
The deadlines not to let slip
Personal actions arising from the application of the Law, between co-owners or between a co-owner and the syndicat de copropriété (the co-owners’ association), are time-barred after ten years. But challenges to decisions of the general meeting — including the decision to rebuild, the apportionment of the cost of the works, or that of a payment of compensation — must be brought by co-owners who voted against or were absent and unrepresented within two months of notification of the minutes, failing which the right is lost (article 34). The contractual deadlines for notifying and claiming under your insurance policy are shorter still.
An open file in your building
If you are suffering loss connected with an incident or with building work, write to us with the evidence and the figures. We will tell you which route applies — notifying a claim, placing an item on the agenda, or making a claim for compensation — and the timetable to follow.
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.