Fines related to the accounting of the JVU

A unit owners’ association does not usually have a trained accountant in its ranks. However, it should be all the more concerned about the accuracy of its accounting. For incorrect accounting or its complete absence, it is subject to relatively high fines. They are threatened by the failure to submit or the submission of incorrect accounts.

Vlastníci bytu obdrželi vyúčtování od SVJ
5 minutes of reading

Chapters of the article

A unit owners’ association does not usually have a trained accountant in its ranks. However, it should be all the more concerned about the accuracy of its accounting. For incorrect accounting or its complete absence, it is subject to relatively high fines. They are threatened by the failure to submit or the submission of incorrect accounts. Similar principles also apply to tenants of flats by landlords.

Responsibility for billing to apartment owners

The HOA, headed by its committee, is accountable not only to the state but also to the unit owners for timely and accurate accounting. They should be the first to receive the timely and correct accounts from the HOA. The HOA is also obliged to allow the recipients of the accounts to inspect the accounting documents. Failure to comply with these obligations may result in the payment of a fine or the right of the unit owners to demand payment of the fine.

Timely delivery of bills

The first legal obligation is that bills must be delivered on time. This is met if it is demonstrably sent within 4 months of the end of the calendar year. In case of doubt, the HOA committee should be able to prove that delivery actually took place. This can be done, for example, at a meeting of the HOA where the delivery is recorded in the minutes or confirmed by the signatures of the apartment owners.

In our law practice, we have dealt with a case where the courts did not accept as evidence the claim of the chairman of the HOA that the bill was dropped in the mailbox. The apartment owner disputed his claim and argued that nothing had been delivered to him. The HOA committee was unable to substantiate its allegations and was therefore obliged to pay the fine. The court concluded that certified mail would be conclusive evidence.

Correctness of the billing

It may have occurred to someone reading the preceding lines that if the SVJ committee had failed to send the bills on time, it could get around this shortcoming by sending out “some numbers” which it would later correct with the correct version.

However, as the Czech courts have also held, in terms of a claim for a fine, even a defective billing is an error to which the homeowner’s claim for payment of a fine is linked. They are viewed essentially as if the HOA had not fulfilled its obligation to bill at all. Moreover, in such a case, any arrears of service are not due.

Consultation of billing documents

Another of the legal obligations associated with a potential penalty is to allow the landlord (and similarly the tenant on the landlord’s side) to check the accuracy of the billing by being allowed to inspect any billing documents.

However, the inspection should be allowed on a realistic basis, not just “pro forma”.

As the court noted in one of the cases we have won, the mere formal offer of a date for inspection of documents is not considered to be compliance with that obligation if the counterparty has no real opportunity to appear for inspection, for example because the dates were set only during working hours and only for part of the documents at any one time. Such conduct was considered to be harassing.

The amount of the fine

Failure to deliver (the correct one) on time entails an obligation to pay a fine to the other party, which is legally 50 CZK per day, but can be agreed at a lower rate.

Liability insurance for the members of the JAC committee

It is definitely worthwhile for the members of the SVJ committee to have liability insurance. Liability for damage or injury caused by a natural or legal person in connection with the performance of the duties of a committee member, chairman or member of the control committee of the community of owners can be insured in this way. This typically covers damage to property, non-pecuniary damage and costs necessary for the insured’s legal defence.

However, members of the HOA committee are usually out of luck in terms of paying any fines in this way. It is necessary to carefully study the exclusions from the insurance claim, which may be slightly different for each insurance company.

Standard ones include:

  • damage caused intentionally,
  • damage caused by intentional wrongful conduct or damage caused by conduct in connection with which the insured has received a personal benefit or has received remuneration not granted by prior approval of the owners’ meeting,
  • damage caused by failure to exercise or late exercise of rights,
  • damage in the form of fines or penalties or other contractual administrative or criminal sanctions.

Do you need a lawyer for your condominium or housing cooperative?

We will review the contract submitted for you or draw up a new one, represent you in court or with the authorities, analyse a thorny legal problem or draw up the minutes of a membership meeting or assembly.

Tip: We have discussed the general principles of accounting for JVUs in our separate article on the website.

Tip: We have discussed the topic of liability insurance for members of the JVU committee in our article on the website.

Are you solving a similar problem?

Dostupný advokát team of online lawyers will solve it for you.

Lawyer for HOA and housing cooperatives

We will provide you with a lawyer for HOA or housing cooperative for 6 or 12 months. He or she will be available at any time to represent you in court or with the authorities and help you with any legal issue. All this for a price you know in advance and the option to pay after the service is completed.

Preset Prices
All services pre-priced for no surprises.
We Do Everything Online
Save time, money and the hassle of travel.
We Work Fast
90 % of issues get solved by the following day.
Experienced Team
We have specialists for every field of law.

Has this content helped you? Give it a rating

No rating yet. Be first to rate and help others.

Article topic:

Author of the article

JUDr. Ondřej Preuss, Ph.D.

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.

Education
  • Law, Ph.D, Pf UK in Prague
  • Law, L’université Nancy-II, Nancy
  • Law, Master’s degree (Mgr.), Pf UK in Prague
  • International Territorial Studies (Bc.), FSV UK in Prague

Reviews of the Dostupný advokát service

Recenze služby

Štěpán Mičunek, Vsetín district

before 4 years

I contacted Dostupný advokát because I needed help with a non-payer. Dostupný advokát gave me advice on how to proceed. The dispute became a court issue, where I was represented by Dostupný advokát. I won the court case and I can fully recommend their service.

Recenze služby

Filip Rufer, Prague

before 4 years

Dostupný advokát updated the terms of a contract for our web portal studentino.cz, to insure that they were in strict accordance with the GDPR (General Data Protection Regulation). The entire process was done online and for reasonable price.

Recenze služby

Jan Sekanina, Prague

before 4 years

My grandparents wanted to give me an apartment, but I was extremely busy at the time and couldn’t afford to put any time into finding out what I needed to do. I also had no idea how to get the transfer of ownership handled at the Land Registry. Dostupný advokát arranged everything for me, and (zobrazit více) the apartment transfer was legally arranged with no issues. Thank you and thumbs up!

View All Testimonials

You could also be interested in

About us in public media
Logo Česká advokátní komora Logo Advokátní kancelář roku 2023 a 2024
Follow the news
Facebook Dostupný advokát Twitter / X Dostupný advokát