Alterations of sectional title regime (“Propriedade Horizontal”): Law no. 8/2022, of 10 January

With the purpose of reviewing and updating the sectional title regime (propriedade horizontal), Law no. 8/2022 was published on the 10th January, introducing changes in matters such as the operation of condominium assemblies, the powers and obligations of the condominium manager and the constitution of sectional title regime (propriedade horizontal).

This diploma, which amends the Civil Code, the Notaries’ Code and Decree-Law 268/94, of 25 October (Sectional Title Regime), came into force on 10th April 2022 – except for the amendment relating to the representation of the condominium manager in court, which came into force on 11th January 2022.

In this article we briefly review the main novelties brought by Law no. 8/2022 and the problems they raise, such as:

I. Amendments to the Incorporation Title Deed;

The sectional title regime (propriedade horizontal) established that the lack of agreement of all the condominium members prevented the amendment to the Incorporation Title Deed of a building, under penalty of nullity.

The Law 8/2022 allows that the lack of unanimity can be overcome in court, when the intended amendments are related to the common parts of the building, as long as the votes of the condominium members against the amendments of the building consent are less than 1/10 of the invested capital and the changes of the building consent do not modify the conditions of use, the relative value or the purpose of the building units.

II. Maintenance and use charges;

The responsibilities of the condominium members for expenses related to the maintenance of the common areas of the buildings were also clarified, as follows:

The expenses necessary for the conservation and fruition of the common parts and for services of common interest will be the responsibility of the unit owners at the time those expenses are deliberated and must be paid in proportion to the permillage of each of the fractions, unless otherwise provided by the condominium bylaws.

However, the expenses of the common services (e.g., gardener, caretaker, security guard, etc.) can be shared equally or proportionally to the use of one or more unit-owners, if the condominium’s by-laws provide for it and specify the criteria for its allocation as well as such provision has been approved, without opposition, by most of the condominium-owners representing the total capital of the building.

As for the expenses of the common parts of the building which are for the exclusive use of one or more unit owners, the general rule is that these expenses should be borne by those who use them. However, if the maintenance of the common parts of the building affects the maintenance or use of other common parts of the building, the owner who has the exclusive use of those common parts shall bear the repair expenses according to the proportion of his fraction, except if the need for repair is due to his own fault. In these cases, he will be responsible for the entire cost of repairing the areas of exclusive use and the common areas affected.

The Law 8/2022 also clarified what is meant by indispensable and urgent repairs, which can be promoted by any unit owner in the absence or impediment of the condominium administration. These are the necessary repairs for the elimination, in a short period of time, of defects or pathologies existing in the common parts and that may, at any time, cause or worsen the damage to the building or group of buildings, or to property, or endanger the safety of people.

III. Liability for condominium charges on disposal of building units;

An important alteration promoted by this diploma has to do with the fact that, in case of alienation, by any means, of an autonomous fraction of a building organised as sectional title regime (propriedade horizontal), it will be necessary to submit a written statement, issued by the condominium manager, detailing all the condominium charges in force in respect of the fraction in question, specifying (i) its nature, (ii) respective amounts and (iii) payment deadlines.

In addition, the debts attributed to the unit to be sold must be detailed, also specifying (i) their nature, (ii) the amounts owed, (iii) the constitution dates and (iv) the due dates, if any.

This declaration must be issued by the condominium manager within a maximum period of ten days from the date of the request made by the seller unit-holder.

This declaration will only not be compulsory in cases where the buyer of the fraction waives it. In this case, the buyer will become responsible for the amounts owed for the fraction in question, even if prior to the date of acquisition of the property.

This legislative alteration has finally safeguarded the interests, not only of the condominium, but also of the future owners of the fractions, since it is very common for these to be faced with large condominium debts that fell due prior to their acquisition, concealed by the respective vendors and previous owners.

Although we applaud this initiative of the legislator, it is important to highlight that since this declaration will be mandatory for any real estate purchase and sale agreement, it will be absolutely necessary to verify the identity and capacity of the person signing it. For this purpose, a simple document will not be sufficient – the risk of forgery of documents of this nature is significant, with prejudice to legal security.

Another aspect to consider is the deadline given by law to the administrator to issue such a statement: 10 days from the request made by the alienating condominium member.

As the issuance of such declaration is an obligation of the condominium manager, in case of non-compliance he may be held liable. However, it is questionable whether there is causality between the breach of the obligation to issue such a statement and the loss of opportunity of the unit-holder who, due to such omission, is unable to sell his unit.

On the other hand, if the buyer of the condominium unit agrees to sign completion without the declaration of the administration of the condominium attesting the inexistence of debts at the date of the purchase, the law provides that the buyer will be liable for all the condominium charges and debts attributable to the unit sold, regardless of the date they became due.  In this case, the possible right of the buyer to claim back the seller for charges prior to the date on which he acquired the fraction will be discussed.

Also with implications for the alienation of building units, the new law foresees that the vendor has the obligation to inform the administration of the Condominium, by registered mail sent within 15 days after the date of the sale, of the full name and Portuguese fiscal number of the new owner, under penalty of being responsible for the expenses inherent to the identification of the new owner and for the costs incurred with the late payment of charges that fall due after the alienation.

Despite being a solution that protects the legal security and the interests of the condominium, it is strange that the legislator has not considered the possibility that such information can be provided by e-mail, in line with the spirit of simplifying the communication procedures between the unit-holders and the administration present throughout the diploma.

IV. The unitholders' meeting: flexibility and digitalisation;

Generally, the Condominium Assembly meets in the first fortnight of January to discuss and approve the accounts for the previous year and to approve the budget for expenses to be incurred during the year.

However, the law now provides the possibility, exceptionally, for this meeting to be held in the first quarter of each year, if the condominium’s by-laws or the unit-holders’ meeting so decides by simple majority.

As for the convocation of the assembly, it becomes possible for the owners to receive it by e-mail, a possibility that had already been temporarily admitted within the legislative package approved during the Covid-19 pandemic.

To do this, it is necessary that the concerned owner expresses this wish at the previous Assembly and this wish be recorded in the minute as well as his/her e-mail address. The owner should send an acknowledgement of receipt by the same means.

The second announcement of the condominium meeting may be made thirty minutes after the meeting time at the same place if the owners representing ¼ of the total value of the building are present on the same day. In other words, if the owners of the building do not attend the meeting at 9.00 a.m. but only ¼ of the total value of the building, the meeting can be held at 9.30 a.m.

This is an important legislative change because, being a reiterated practice, it was still controversial and used to justify actions for annulment of resolutions of the condominium assembly adopted in this context.

In the same way as the notice of meeting, the resolutions of the meeting can be sent to the absent owners by e-mail, if they have been previously agreed. The maximum period of 30 days is maintained. Similarly, if the owner has received the e-mail with the resolution and does not say anything within 90 days, his silence will be considered as approval of the communicated resolution.

Finally, and without prejudice to the legislation already published during the pandemic that temporarily allowed the holding of Condominium Assemblies by remote communication means, this possibility is no longer temporary and is here to stay.

Therefore, the meeting can be held by remote communication, preferably videoconference, if the building management or the owners’ majority request it.

However, if any owner informs the building management, with justifiable reason, that he is not able to attend the meeting by remote communication, it is the responsibility of the building management to provide the necessary means, otherwise the meeting cannot be held.

Finally, the law also clarifies that the minutes of the unit-holders’ meeting must be drawn up and signed by the person who acted as chairman and signed by the unit-holders present. Regarding the collection of such signatures, the qualified electronic signature is expressly permitted, as well as the statement sent by e-mail by the unit-owner to the building management approving the content of the minutes, which should be attached to the original, replacing the formal signature of the document.

V. Powers and duties of the condominium manager.

The Law 8/2022 further clarifies and completes the list of duties of the unit-holder manager, which are true duties and which, if not exercised, may give rise to civil and criminal liability.

We draw particular attention to the duty to charge legal interest and the penalties provided in the condominium bylaws to the unit-holders who are in breach of their obligations to pay the contributions due to the condominium, as well as the need to collect and submit, at least, three proposals (quotations) from different service providers whenever extraordinary maintenance works or innovations are to be carried out in the building (unless otherwise provided in the building regulations).

The information provided herein is generic, does not constitute legal advice and does not exempt the reader from obtaining it in a specific case.

Catarina Pereira Dos Santos, Joana Neto Mestre | MATLAW