Housing cooperatives had to adapt their articles of association to the new Business Corporations Act (ZOK) by mid-2015.
Housing cooperatives had to adapt their articles of association to the new Business Corporations Act (ZOK) by mid-2015.
The latter requires housing cooperatives to regulate in their statutes in detail the rights and obligations of their members relating to the rental and use of their cooperative flats. To approve the statutes, the ZOK requires the consent of all members of the BD, which is often not met in practice. The courts are now starting to strike down the statutes of these cooperatives.
This spring, the Municipal Court in Prague heard a lawsuit brought by some members of a Prague housing cooperative against the new statutes. The bylaws contained passages that interfered with the members’ rights to use their cooperative flats and which the members protested against during the hearing. For example, the by-laws contained a ban on keeping pets without the permission of the board of directors, an obligation to appear before the board of directors when summoned by the cooperative, a ban on “working” in the cooperative flats, and many other restrictive obligations that extremely strengthened the role of the board of directors and placed the members of the cooperative below the level of ordinary tenants.
The affected members, however, did not stand for it and challenged the co-op’s bylaws in a lawsuit, claiming that the necessary quorum for their adoption had not been met. The municipal court agreed with them, ruling that a housing cooperative could not modify the use of apartments in a building without the consent of all its members. It then declared the bylaws invalid.
We will review your HOA or housing cooperative bylaws or we will write them up for you from scratch. We will always ensure that they comply with current legislation. Our bylaws are always tailored to the needs of the residents of the building. We can also set up your HOA or housing association on a turnkey basis. We will arrange everything quickly, flawlessly and at pre-determined prices. You can pay only after the service has been provided.
The purpose of the Act is to ensure that a majority cannot be abused to enforce bylaws that disproportionately restrict cooperative members’ use of their apartments.
The Association of Housing Associations opposes the amendment, arguing that it will be essentially impossible to change the bylaws. There will always be someone who disagrees, often for querulous reasons. In our view, however, this regulation may make sense, because the members of the housing association are de facto tenants in their flats. It is similar to entering into a lease agreement, but the landlord could change it unilaterally at any time.
This leaves housing associations with no choice but to carefully negotiate each change with their members and not to force changes.
Download the free readable ebook for HOA and BD presidents and their members and avoid the legal risks that accompany the management of your building.
We will review your HOA or housing cooperative bylaws or we will write them up for you from scratch. We will always ensure that they comply with current legislation. Our bylaws are always tailored to the needs of the residents of the building. We can also set up your HOA or housing association on a turnkey basis. We will arrange everything quickly, flawlessly and at pre-determined prices. You can pay only after the service has been provided.
Ondřej is the attorney who came up with the idea of providing legal services online. He's been earning his living through legal services for more than 10 years. He especially likes to help clients who may have given up hope in solving their legal issues at work, for example with real estate transfers or copyright licenses.
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