A negative decision by an Owners’ Association on an addition, extension or superstructure: what options does the apartment owner have?

When an apartment owner wants to expand his apartment with an addition, extension or superstructure, he almost always needs permission from the Owners’ Association to do so.This is almost always stipulated in Model Regulations for building plans that change the architectural appearance, the construction of the building and/or the relationship between apartment owners. But what options does the apartment owner have in the event of a negative decision by the Owners’ Association? Should the apartment owner simply abandon his building plans? Not always. He can initiate proceedings in court, asking the court to set aside the negative decision by the Owners’ Association and grant substitute permission for the building plans. In the following, I discuss various aspects of such application proceedings.

Annulment of the negative decision

An apartment owner faced with a negative decision by the Owners’ Association can initiate proceedings in court within one month to set aside the relevant decision. This is a hard deadline, after which the decision becomes irrevocable. The decision can be set aside on several grounds, including if there is a) a violation of legal or statutory provisions regarding the making of decisions or b) a violation of the reasonableness and fairness that owners must observe towards each other. An apartment owner often invokes ground (b), a violation of reasonableness and fairness. In that case, the court will assess whether the negative decision by the Owners’ Association was reached in a reasonable manner and whether the Owners’ Association could also reasonably make the decision given the interests involved.

Substitute authorisation

If the court finds that the decision was made in violation of reasonableness and fairness, it will set aside the decision. This does not mean, however, that the apartment owner can go ahead with his building plans. After all, he still does not have the required permission to implement his building plans. A request for a decision to be set aside is therefore often accompanied by a request for substitute authorisation. In its ruling, the court assesses whether the Owners’ Association had reasonable cause to refuse to grant permission for the building plans. It examines all the circumstances of the case. In its defence, the Owners’ Association must explain the reasons for its refusal to grant permission, such as a negative impact on the privacy of the other owners, loss of sunlight or daylight, or impairment of the architectural appearance of the building. The court will take into account the interests involved in the building plans.

If the court finds that the Owners’ Association had no reasonable cause to deny its permission, the court will grant a substitute authorisation for the building plans. The apartment owner can then carry out his building plans even if he does not have the permission of the Owners’ Association. Permission granted by the court supersedes the permission granted by the Owners’ Association.

Owners’ Association resolution appointing a representative ad litem

When an Owners’ Association is involved in application proceedings by one of its members, the question is often raised as to who is authorised to conduct the defence on behalf of the Owners’ Association and whether that person is allowed to engage an attorney to do so. The answer to this question can be found in the Model Regulations. These stipulate that the board is the body that represents the Owners’ Association. The board is obliged to put up a defence on behalf of the Owners’ Association and is authorised to engage an attorney to do so. No prior Owners’ Association resolution appointing a representative ad litem is required. This is because the conduct of defence is deemed to be in the interests of the Owners’ Association.

Please note that this differs if the Owners’ Association itself initiates proceedings. For example, if the apartment owner started his building plans before receiving permission from the Owners’ Association. In that case, the board of the Owners’ Association does need a resolution appointing a representative ad litem; a resolution by which the Owners’ Association grants the board a power of attorney to initiate proceedings and engage an attorney.

Administrative law

In addition to the difficulties of obtaining permission from the Owners’ Association or the subdistrict court, obtaining administrative permission from the municipality is also a tricky issue for the apartment owner. This is because construction of an addition, extension or superstructure almost always requires a permit under the Environment and Planning Act. Although the two ‘permissions’ are separate, the absence of one may have consequences for obtaining the other. This was shown in a recent ruling by the District Court of North Holland, dated 7 June 2022.

The ruling concerned an apartment owner who applied for a permit under the Environment and Planning Act for various construction activities in his apartment. The Owners’ Association had refused to grant permission, but the municipality granted the permit under the Environment and Planning Act. In application proceedings, the subdistrict court ruled that the Owners’ Association’s negative decision did not violate reasonableness and fairness and upheld the decision. The Owners’ Association subsequently objected and appealed against the permit granted under the Environment and Planning Act. Although its objection was rejected, the Owners’ Association was successful in appeal proceedings. The administrative court ruled that the apartment owner’s building plans could not possibly be realised since the Owners’ Association, in all reasonableness according to the subdistrict court, had not granted permission. The apartment owner therefore had no interest in the permit under the Environment and Planning Act he had applied for, which meant the permit should not have been granted. The administrative court revoked the permit granted under the Environment and Planning Act.

Conclusion

An apartment owner wishing to build an addition, extension or superstructure would be wise to obtain permission from the Owners’ Association before applying to the municipality for a permit. After all, the absence of permission from the Owners’ Association may lead to the permit application being rejected. If the apartment owner does not get permission from the Owners’ Association, he is at liberty to apply to the subdistrict court for a substitute authorisation. If he does not obtain this permission either, any permit already granted may be revoked.

Would you like more information?

Would you like to know more about proceedings to set aside an Owners’ Association decision? Or about substitute authorisation or the position of the Owners’ Association in such proceedings? Please do not hesitate to contact me or one of the other specialists at GMW advocaten.