Works funds set up in condominiums

The works fund is a pool of money set up to finance future works in condominiums.

The establishment of this fund allows:

• To better plan the maintenance of the building,
• Anticipate significant expenses for the condominium in case of works to be made in the common areas of the building
• To have available cash at the time when thegeneral assembly decides to carry out works.

The works fund will thus be used for works not included in the provisional budget, which are imposed by regulation or voted on at the general meeting.

The works fund shall be used to finance expenditure resulting from:

• Development of the draft multi-year works plan (MPP) and, optionally, global technical diagnosis (GTD)
• Implementation of the works set out in the TPP adopted by the general meeting of co-owners
• Urgent works decided by the syndic of co-ownership, necessary to safeguard the building (i.e. its preservation in good condition)
• Works necessary to safeguard the building, to preserve the health and safety of the occupants and to achieve energy savings not provided for in the TPP.

The general meeting may decide to allocate all or part of the sums deposited in the works fund to finance these expenses.

The use of these funds will, however, take into account the existence of special common areas or allocation keys charges imposed by the condominium by-law. This allocation makes it possible to prevent co-owners not concerned by the works from participating in it via the use of all or part of the works fund.

The syndicate of co-owners must set up a works fund when the immovable is at destination total or partial housing.

This fund must be set up at the end of a 10-year period from the date of reception building works.

The obligation to set up a works fund shall apply to theall buildings intended for total or partial residential use, irrespective of the number of batches, whether there are fewer than 50 batchesbetween 51 and 200 lots or more than 200 lots.

As the works fund is mandatory, it is not necessary to vote its creation in general assembly.

To set up the works fund, the syndicate of co-owners will only have to vote at the annual general meeting:

• The opening of a specific bank account, dedicated to the payment of contributions to the works fund
• And the annual amount of the works fund, as a percentage of the estimated budget.

This resolution is voted on at the absolute majority Article 25.

If the decision is not approved but received 1/3 of the votes, a new vote can be organized immediately. This resolution will then be voted on at the simple majority Article 24.

The works fund shall be financed by a compulsory annual fee.

Each co-owner must contribute to the mandatory annual fee.

The syndic of co-ownership thus establishes a special call for funds for the works fund, under the same conditions as those decided by the general meeting for the payment of the provisions of the provisional budget (periodicity of calls for funds) and on the same due date.

In principle, the amount owed by the co-owners is calculated according to its share common loads.

No. Works funds cannot be recovered by a co-owner who sells his condominium lot.

Indeed, the sums paid are attached to the lots and enter definitively, as soon as they are paid, into the patrimony of the syndicate of co-owners.

However, the parties (buyer and seller) may provide, in the deed of sale, for a refund of the sums paid in respect of the works fund, provided that they have not yet been used to make works. This amount has just added to the sale price of the property.

The law does not provide for any penalty in the event of non-establishment of a works fund or setting of a rate below the legal minimum.

But, in such a case, a co-owner absent or having voted in favor of the resolutions rejected can enter the court of justice the location of the building to obtain theannulment of the decision setting aside the establishment of a works fund or setting a lower rate. It is recommended to be accompanied by a lawyer for this procedure.

If the trustee's failure to set up the works fund is due to an error or omission, he must be contacted in order to inform him of this omission and request an explanation.

In the absence of regularization of the situation, it is then necessary to address a formal notice (by registered mail with acknowledgement of receipt) to register atagenda of the next general meeting of co-owners the establishment of the works fund.

If the trustee refuses, it is then possible to apply to the court of the location of the immovable to obtain the compulsory inclusion of the constitution of a fund of works on the agenda of the general meeting. It is recommended to be accompanied by a lawyer for this procedure.