4 September 2024
It's not an uncommon situation: a member of the Homeowners Association (HOA) expands their garden or rooftop terrace beyond the boundaries of their private section and later asks the HOA to legalize this change.
Essentially, this means that the portion of the common area that has been taken over must be transferred to the member’s private property. To do this, the deed of division must be amended with the consent of all apartment owners. This requirement was reaffirmed by the Supreme Court of the Netherlands on February 24, 2023, in the case ECLI:NL:HR:2023:286. If not everyone cooperates, the court can be asked for authorization.
A similar case recently came before the Amsterdam District Court (ECLI:NL:RBAMS:2023:6999). In this case, an HOA member had annexed a piece of the HOA’s garden, and the issue was brought to court after the HOA meeting decided that this piece of land would be added to the member’s private property for a symbolic price of €1. This change would also be incorporated into an amendment to the deed of division. However, one HOA member disagreed, arguing that the acquiring member should pay compensation based on the appraised value per square meter, as if the member were to sell their apartment.
The court ruled that the decision of the HOA was void because it was contrary to the deed of division, which stated that the piece of garden was common property, not private. Since there wasn’t 100% support for amending the deed of division, the requirement set by the Supreme Court was not met. The court also refused to grant authorization for the amendment, noting that the price of €1 did not reflect the actual situation. The court stated that the price should reflect the value taken away from the HOA, representing the value of the land to all the joint owners. This is certainly not the same as the price per square meter the acquiring member would receive if they sold their apartment.
The members of the HOA now need to renegotiate the amount to be paid for the land. Hopefully, this will lead to a solution, possibly with the help of a jointly appointed expert or through mediation.
Do you have questions about the situation within your HOA, or do you need advice on the correct procedures for decision-making? Don’t hesitate to contact our HOA specialists in the real estate section.
