The Property Unit Ownership Act
The Property Unit Ownership Act
Law | Date: 2013-12-31 | Ministry of Local Government and Modernisation
Originally published by: Ministry of Local Government and Regional Development
Act of 23 May 1997 No. 31 relating to ownership of property units (Property Unit Ownership Act). Cf. previous Act of 4 March 1983 No. 7.
Act of 23 May 1997 No. 31 relating to ownership of property units (Property Unit Ownership Act). Cf. previous Act of 4 March 1983 No. 7.
The english verson of the lawtext is not approved by the Storting (Parlament), and can not be considered as a formal lawtext.
Chapter I. Introductory provisions
Section 1. Scope; definitions
This Act applies to property units established pursuant to the provisions of chapter II or established in a corresponding manner prior to the entry into force of the Act. For the purposes of this Act, property unit shall mean a co-ownership share in a developed property with an associated sole right to the use of one of several dwellings or other units in the property.
The Act shall apply correspondingly to a co-ownership share in a developed property with an associated special right of ownership to a dwelling or other unit in the property when the arrangement is lawfully established and registered prior to the entry into force of this Act, cf. section 3.
For the purposes of this Act, dwelling shall refer to both permanent dwellings and recreational dwellings.
Section 2. Other forms of co-ownership
Unless the property has been divided into property units, it may not be validly agreed that a co-owner of a developed property with two or more units shall have sole right of use to a dwelling in the property for more than ten years. If the user acquires a co-ownership share in the property by agreement after the right of use is established, the right of use may only be claimed for the remainder of the ten-year period following from the first sentence.
When a co-owner has sole right to the use of a dwelling in a developed property with two or more units, a lien in a co-ownership share in such a property may not be validly agreed unless the property has been divided into property units as referred to in section 1, first or second paragraph, of this Act. This shall apply although the right of use has been established for a shorter period than ten years.
If right of use as referred to in the second paragraph is established after the co-ownership share is mortgaged, the mortgagee may claim redemption of the mortgage. The lien lapses unless the mortgagee within three months after the mortgagee learned or ought to have learned of the right of use requests enforcement, sends a notice of enforcement proceedings or takes legal steps to obtain the necessary grounds for enforcement and pursues the demand for enforcement without undue delay. The lien will nevertheless not lapse if the right of use is terminated or the property is divided into property units before the enforcement is carried out.
If the building is owned by a partnership as referred to in section 1-1 of the Partnerships Act, participation in the partnership is deemed equivalent to co-ownership in relation to the provisions of this section.
The provisions of this section do not apply to recreational dwellings or to properties that are used or may be used for agriculture or forestry, cf. the Land Act of 12 May 1995. Nor do these provisions apply to agreements between two or more owners of a property unit concerning the sole right to the use of the unit or parts of it unless it is a multiple dwelling unit as referred to in section 6, fourth paragraph, second sentence.
Section 3. Special right of ownership to part of a building
A special right of ownership to a dwelling in a building with two or more units may only be established, transferred or mortgaged after partitioning off or lease of the part of the site that the dwelling is associated with.
Section 3a. Prohibition against discrimination
The bylaws may not provide conditions for co-ownership that pay regard to ethnicity, national origin, extraction, colour, language, religion or view of life. Such circumstances may not be deemed objective grounds for refusal of approval of a co-owner or user of the property or be taken into account in connection with the exercise of any right of pre-emption. In the event of such discrimination, the provisions of the Discrimination Act shall apply.
Nor may the bylaws provide conditions for co-ownership that pay regard to homosexual orientation. Such circumstances may not be deemed objective grounds for refusal of approval of a co-owner or user of the property or be taken into account in connection with the exercise of any right of pre-emption.
If there are circumstances that give reason to believe that discrimination has taken place in contravention of the second paragraph, such discrimination shall be deemed to be proved unless the person who carried out the act proves on a balance of probabilities that no such discrimination has taken place.
As regards liability for compensation for unlawful discrimination pursuant to the second paragraph, the ordinary rules of compensation shall apply.
The Equality and Anti-Discrimination Ombud and the Equality and Anti-Discrimination Tribunal shall monitor compliance with and help to implement the second paragraph, cf. the Equality and Anti-Discrimination Ombud Act.
Section 4. Derogation
The Act shall be mandatory unless otherwise expressly stated or implied by the context.
Chapter II. Division into property units
Section 5. Division into property units
Property units are established by registration of an application to divide the property into property units pursuant to the provisions of this chapter.
Section 6. What the division into property units may involve
Each co-ownership share shall be associated with the sole right to the use of a unit. The principal part of the unit shall be a clearly delimited and integral part of a building on the property. The principal part shall have a separate entrance. The unit may in addition include other parts of the property. The division shall provide an appropriate delimitation of the individual units.
A sole right to the use of common areas may not be associated with any co-ownership share. By common areas is meant parts of the property that are not included in the individual units. Parts of the property that are necessary for the use of other units in the property or which, pursuant to provisions, decisions or permits issued in or pursuant to the Building and Planning Act, are designated to serve the common needs of the residents or the building shall be common areas. On establishment of a multi-unit co-ownership, caretaker’s housing, common garage and similar areas intended to serve the common needs of the co-owners or management of the property shall also be common areas. Dwellings let out for other purposes than caretaker’s housing on the date of the division into property units may however only be made common areas if the tenant does not hold a purchase option pursuant to chapter III.
The division into property units shall apply only to a single subestate number unless consent is otherwise granted pursuant to section 8, fourth paragraph.
The division into independently owned units shall apply to all of the units in the property. In the case of properties only partly used for residential purposes, the requirement regarding full division of the property shall not preclude that all of the dwellings may constitute a multiple dwelling unit, and/or that all remaining units may constitute a multiple dwelling unit.
A planned building may not be divided until planning permission has been granted. In existing buildings division into property units may only apply to finished units.
It shall be decided whether the individual unit is to be used as a dwelling (dwelling unit) or for another purpose (commercial unit). The purpose shall comply with the current land-use plan unless a permit for other use has been granted pursuant to planning and building legislation.
Each dwelling unit shall have a kitchen, bathroom and lavatory in the principal part of the unit. The bathroom and lavatory facilities shall be located in a separate room or rooms. The provisions of this paragraph do not apply to recreational dwellings or dwellings that are part of a multiple dwelling unit.
A co-ownership fraction shall be established for each property unit.
Section 7. Application for division into property units
An application to the municipality for permission to divide a property into property units may be submitted by the property’s title holder and shall contain the following information:
a) the property’s designation,
b) the purposes of the individual units,
c) the co-ownership fraction of each unit and
d) the bylaws of the co-ownership.
A site plan of the property and plan drawings of the floors of the building including the cellar and the attic shall be enclosed with the application. The boundaries of the units, the proposed unit numbers and the use of each room shall be clearly indicated on the plan drawings. The boundaries of undeveloped parts of the property to be included in units shall be clearly indicated on the site plan.
It shall be confirmed in the form of a declaration that the condition of the Act concerning division into property units have been satisfied. A list of the names and addresses of all tenants of dwellings in the property shall be enclosed with the application.
The Ministry may decide that standard forms shall be used for the division application and for enclosures.
For permission to divide a property into property units, the municipality may charge a fee, which must not exceed three times the standard court fee or five times the standard court fee if an on-site inspection is necessary. The municipality shall decide the size of the fee on the basis of the average cost of processing such cases. In addition, the municipality may charge a fee pursuant to the provisions of the Land Subdivision Act for survey certificate maps that must be drawn pursuant to the provision laid down in section 9, second paragraph. Moreover, fees for registration of the division application shall be paid to the municipality. The fees shall be paid within a time-limit to be set by the municipality in the individual case. If the division permission is not granted, the registration fee and half of the fee for the division into property units shall be repaid.
Section 8. The municipality’s processing of the division application
The municipality may refuse permission to divide a property into property units if, at the latest six months after the division application is received by the municipality, the property is made the subject of a decision regarding an improvement programme, a decision to zone an area for renewal or a temporary prohibition pursuant to section 33 of the Building and Planning Act.
The municipality shall refuse permission to divide a property into property units if:
a) the conditions of section 6 are not satisfied,
b) the division application is not in compliance with section 7, or
c) the fee pursuant to section 7, fifth paragraph is not paid within the time-limit.
The municipality shall set a time-limit for correction or alteration of an division application if it would be possible to carry out a division of the property after such correction or alteration.
In special cases, the municipality may consent to inclusion of more than one subestate number in the division of property into property units. Such consent shall not be granted unless written consent is given by the real property register.
Section 9. Permission for division into property units
The municipality’s permission to divide a property into property units shall include the boundaries of the individual units, the purposes of the individual units as well as the number and co-ownership fraction of each unit. The municipality shall prepare a final site plan and plan drawings with content as referred to in section 7, and the plan and drawings shall comply with the permission for division into property units.
If any of the units are to include undeveloped parts of the property and such areas can be delimited by parts of buildings or as portions of such parts, the boundaries shall be marked on the site plan. If such areas cannot be delimited in this manner, the boundaries shall be indicated on survey certificate maps, which shall also comply with the division permission. The survey certificate map shall be drawn by the municipality in accordance with the provisions of the Land Subdivision Act without a special application.
The municipality shall send the tenants included in the list accompanying the application a copy of the division permission without the enclosures, including information regarding the tenants’ right of appeal and their rights pursuant to chapter III, cf. section 7, third paragraph.
The Ministry may issue regulations concerning the content of the division permission and may stipulate standard forms to be used for this purpose.
Section 10. Appeals
The municipality’s decisions concerning permission or refusal of permission to divide a property into property units may be appealed to the Ministry. The Ministry may delegate the authority to make decisions to the County Governor. However, rejections of applications pursuant to section 8, first paragraph, may not be appealed against.
Section 11. Registration
On expiry of the time-limit for appeals by tenants who have received a copy of the permission pursuant to section 9, third paragraph, and any appeals against such permission have been decided, the municipality shall send the division application with the permission and enclosures for official registration. The municipality shall ensure that the property units are registered in the Norwegian Land and Property Register.
On registration of the division application, a separate page in the land and property register shall be established for each property unit.
Co-ownerships with nine or more property units shall be registered in the Register of Business Enterprises. The board shall notify the co-ownership for registration at the latest six months after the division application has been registered. Co-ownerships with eight or less property units may be registered in the Register of Business Enterprises.
Section 12. Division and merger of property units
A property unit may be divided into two or more property units on registration of a separate division application which shall be submitted by the property unit’s title holder. Similarly, two or more property units may be merged to one or more property units. The conditions and limitations that pursuant to section 6 apply to division into property units shall apply correspondingly to redivision. In the case of redivision pursuant to this section, sections 7–11 shall apply correspondingly in so far as they are appropriate.
If a division involves the establishment of new common areas, such division may only be carried out with the consent of the board. If a division involves the establishment of new property units and this results in an increase in the total number of voters, this requires the consent of the general meeting of the co-ownership.
Redivision pursuant to this section does not change the co-ownership fractions for property units not affected by the redivision.
Redivision pursuant to this section may only be carried out with the consent of all persons who have registered mortgage in the property units concerned.
Section 13. Redivision in other cases
An application for redivision in other cases other than those referred to in section 12 shall be submitted to the board. The conditions and limitations that pursuant to section 6 apply to division shall apply correspondingly to redivision. In the case of redivision pursuant to this section, sections 7–11 shall apply correspondingly in so far as they are appropriate.
An application for permission to change a unit’s purpose from residential to other purposes or vice versa shall be submitted by the property unit’s title holder with the consent of the general meeting of the co-ownership, cf. section 30, second paragraph (e). The conditions of section 6, sixth paragraph, second sentence, shall apply correspondingly.
Redivision pursuant to this section may only take place with the consent of all persons who have registered mortgage in the property units concerned.
Chapter III. Purchase option for tenants
Section 14. Purchase option
Tenants of dwellings in the property on the date of the registration of the division application, cf. sections 5 and 11, shall be entitled to purchase the unit concerned pursuant to the provisions of this chapter.
However, the following tenants shall not hold a purchase option:
a) tenants with tenancy agreements which according to their content will expire without notice before the lease has lasted for two years,
c) tenants as referred to in sections 11-1, 11-2 and 11-3, fourth and fifth paragraphs, of the Tenancy Act
d) tenants in multiple dwelling units and
e) tenants of caretaker’s housing in common areas.
The purchase option may not be waived before the division application is registered.
The purchase option does not apply in the case of redivision pursuant to sections 12 and 13. However, the purchase option applies in the case of registration of an application for redivision involving division of a multiple dwelling unit into individual dwelling units and in connection with conversion of a caretaker’s housing that was previously a common area to a separate property unit.
Nor shall the purchase option apply to division into property units of a rental apartment house in connection with the exercise of right of pre-emption pursuant to section 3 of the Act relating to municipal right of pre-emption to rental apartment houses of 29 April 1977 No. 34 or in connection with acquisition of the property by a majority of the residents if the tenant has had a right to or has received an offer to participate as a purchaser. Nor does the purchase option apply on conversion of housing associations or housing cooperative stock corporations (cf. section 1-4, first paragraph, of the Housing Cooperatives Act).
Statutory or agreed right of pre-emption may not be exercised in connection with sale to a tenant with a purchase option pursuant to this chapter.
The provisions of this chapter do not apply to recreational dwellings.
Section 15. Sale offer
The owner of the property shall as soon as possible after registration of the division application submit a written sale offer to all tenants with purchase options. The offer shall contain:
a) a binding proposal regarding the purchase price and
b) information concerning the owner’s rights and obligations pursuant to this chapter.
Section 16. The purchase price
The tenant shall be entitled to purchase the property unit at a purchase price equivalent to four-fifths of the property unit’s market value after deduction of that part of the value that is due to improvements and investments by the tenant or previous tenants subject to the same tenancy agreement. Deductions shall be made for encumbrances that must be taken over by the tenant which are not financial encumbrances.
The tenant may request that valuation be conducted by a valuation board consisting of three members appointed by the district court. The provisions of sections 106 and 108 of the Courts of Justice Act shall apply to the valuation board in so far as they are appropriate. The valuation board shall base its valuation on the value obtaining on the valuation date.
Each of the parties may submit a request for a new valuation board valuation within fourteen days after the party is notified of the valuation pursuant to the second paragraph. The court shall comply with the request if the valuation:
a) is based on unsatisfactory procedures or an incorrect perception of the factual circumstances, and this must be deemed to have considerably affected the valuation, or
b) the valuation is clearly incorrect.
The court fixes the remuneration of the members of the valuation board. The court may decide that a person who requests a valuation board valuation pursuant to the second and third paragraphs shall deposit an amount as security for the remuneration. When the valuation is final, the court shall decide on the liability for costs. The owner shall bear the costs if the final valuation is lower than the owner’s offer to the tenant, and the costs shall otherwise be borne by the tenant.
The decisions of the court pursuant to the third and fourth paragraphs are rulings which can be appealed pursuant to the provisions of the Civil Procedure Act.
The purchase price falls due for payment one month after the purchase option is exercised, and any valuation by the valuation board is final. However, the part of the purchase price equivalent to financial encumbrances on the property unit does not fall due until such encumbrances are redeemed unless the parties agree to settle the purchase price by the purchaser taking over the encumbrances.
The purchaser shall only be obliged to pay the purchase price in return for the registered title deeds of the property unit. The purchaser shall have a right to the title deeds on payment of the purchase price less any financial encumbrances on the property unit. If the encumbrances exceed the purchase price, the tenant may claim the title deeds immediately.
Section 17. Time-limits. Lapse of the purchase option
The purchase option lapses if it is not exercised within a time-limit that expires three months after a written offer pursuant to section 15 is received by the tenant when no request for valuation by the valuation board is made within the time-limit pursuant to section 16.
If a request for a valuation board valuation is submitted, the purchase option may be exercised until one month after the tenant is notified of the final valuation or until one month after a request for a new valuation by the valuation board is legally rejected.
The purchase option is protected against the owner’s creditors without registration. In respect of acquisition in good faith by way of agreement, the purchase option is protected without registration provided that the tenant is in possession of the unit.
Section 18. Tenants who do not purchase a property unit
Tenants who do not purchase a property unit in the property retain their rights according to the tenancy agreement. However, the right of exchange pursuant to section 32a of the Tenancy Act of 16 June 1939 lapses on the first transfer of the property unit after the division into property units.
Chapter IV. The relationship between the co-owners. Form of liability
Section 19. Right of use
The individual co-owner holds the sole right to the use of his unit and the right to use common areas for the purpose for which they are intended or are generally used and for other purposes in keeping with the time and circumstances.
The use of the unit and the common areas must not in an unreasonable or unnecessary manner cause damage or nuisance for other co-owners.
The unit may only be used in accordance with the purpose, cf. section 6, sixth paragraph. Change of use from residential to other purposes or vice versa must not take place without redivision pursuant to section 13, second paragraph.
If so agreed by the co-owners concerned, further provisions may be laid down in the bylaws concerning the use of commercial units.
Provisions may be laid down in the bylaws concerning a temporary sole right for one or more co-owners to the use of specific parts of the common areas and concerning the conditions for such a sole right. The restriction laid down in section 6, second paragraph, third sentence, shall apply correspondingly.
The general meeting of the co-ownership may decide normal house rules for the property. Even if prohibition against the keeping of animals in the multi-unit co-ownership is prohibited, the user of the property unit may keep animals if there are good reasons for doing so and the keeping of animals is of no inconvenience to the other users of the property.
Section 20. Maintenance
The individual co-owner shall properly maintain the unit so that no damage or nuisance arises for the other co-owners.
Common areas shall be properly maintained. If so agreed by the co-owners concerned, it may be laid down in the bylaws that the owners of specific property units shall be obliged to maintain parts of the common area.
Section 21. Installations, etc.
Wiring, piping and similar necessary installations may be led through the unit unless this gives rise to major inconvenience for the co-owner. The co-owner shall allow access to the unit for necessary inspection and maintenance of such installations.
A co-owner may with the approval of the board implement measures in the common areas that are necessary owing to disability of the co-owner or a member of his household. Such approval may not be refused without objective grounds.
Section 22. Legal disposition
The individual co-owner has the property unit at his disposal as an owner.
If so agreed by the co-owners concerned, provisions may be laid down in the bylaws restricting the legal disposition over the property unit. If it is decided that the acquirer of a property unit or tenant of a unit shall be subject to approval, approval may only be refused if there are objective grounds for such refusal.
With the exception of recreational dwellings, no-one may acquire more than two dwelling units in a co-ownership. This does not however apply in connection with expropriation, inheritance, advance on inheritance or cases where a creditor acquires property units in order to secure his credit which is secured by a mortgage in the property unit. Housing associations, the state, county authorities, municipalities, undertakings and organizations owned or controlled by the state, a county authority or a municipality whose purpose is to obtain dwellings may acquire more property units. The same applies to institutions or socially beneficial associations whose purpose is to obtain dwellings and employers who intend to let the property units to their employees.
Even though legal persons are prohibited from acquiring property units or a limit is laid down on the number of property units a person may own, the following legal persons may collectively acquire a maximum of 10 per cent but in any case a minimum of one property unit in a multi-unit co-ownership consisting of five or more property units:
a) the state,
b) county authorities,
d) undertakings managed and controlled by the state whose purpose is to obtain dwellings, a county authority or a municipality,
e) foundations established by the state, a county authority or a municipality whose purpose is to obtain dwellings and
f) undertakings, foundations or other persons that have entered into collaboration agreements with the state, a county authority or a municipality on obtaining dwellings for disadvantaged persons.
A person who exercises a purchase option pursuant to chapter III shall not be bound by provisions of the bylaws as referred to in the second paragraph if the provisions are laid down before the property unit is taken over.
Section 23. Division of joint costs and joint income
Costs associated with the property that are not associated with individual units shall be divided between the co-owners according to the co-ownership fraction unless special grounds indicate division of the costs according to the benefit to the individual unit or according to consumption.
If so agreed by the co-owners concerned, a different division may be laid down in the bylaws than that referred to in the first paragraph.
The individual co-owner shall pay an amount on account decided by the co-owners at the general meeting of the co-ownership or by the board to cover his share of the joint costs. The amount paid on account may also cover allocation of funds to future maintenance, improvements or other joint measures on the property if such allocation is decided by the general meeting of the co-ownership.
A co-owner who has borne greater costs than follow from the first, second or third paragraph is entitled to reimbursement of the excess amount.
Income from the property not associated with the individual unit shall be divided between the co-owners according to the co-ownership fraction unless otherwise provided by the bylaws if so agreed by the co-owners concerned.
Section 24. Form of liability
In respect of joint liabilities and obligations, the individual co-owner shall be liable in accordance with his co-ownership fraction.
Section 25. Lien for co-owners’ obligations
In respect of claims against the co-owner deriving from matters relating to the co-ownership, the other co-owners hold a lien in the property unit. The secure claim may not exceed an amount that for each unit is equivalent to the national insurance basic amount on the date that enforcement is decided.
The lien expires at the latest two years after the secured claim should have been paid unless a demand for enforced settlement is received by the district court or unless the claim is settled without undue delay.
If so agreed by the co-owners concerned, a more extensive lien in relation to the co-owners than that laid down in the first paragraph may be established in the bylaws. Such a lien is protected pursuant to normal rules.
The lien referred to in this section may be claimed by the board and the individual co-owner who has covered more than his share, cf. section 23, fourth paragraph.
Section 26. Sale order
If, despite a warning, a co-owner seriously breaches his obligations, the board may order the member to sell the property unit. The requirement regarding a warning shall not apply in cases where eviction may be demanded pursuant to section 27. The warning shall be issued in writing and shall inform that a serious breach of contract entitles the board to demand the sale of the property unit. A sale order shall be issued in writing and shall inform that enforced sale of the property unit may be demanded if the order is not complied with within a time limit that shall be set at no less than six months from the date such an order is received.
If the order is not complied with within the time limit, the board may demand that the property unit be sold through the enforcement authorities pursuant to the provisions concerning enforced sale in so far as they are appropriate. Sections 4-18 and 4-19 of the Enforcement Act shall apply correspondingly. If within the time-limit pursuant to section 11-7 of the Enforcement Act, first paragraph, objections that are not clearly groundless are raised against the enforced sale, the demand for enforced sale shall not be upheld without being heard according to the rules of civil procedure. The provisions of section 11-20 of the Enforcement Act regarding the lowest acceptable bid shall not apply in connection with enforced sale pursuant to the present section.
Section 27. Eviction
If a co-owner behaves in such a manner that there is a risk of destruction or considerable degradation of the property or such behaviour constitutes a serious nuisance or inconvenience to other users of the property, the board may demand eviction from the property unit pursuant to chapter 13 of the Enforcement Act. A demand for eviction may at the earliest be submitted at the same time as a sale order is issued pursuant to section 26. The demand shall be submitted to the district court. If within the time limit pursuant to section 13-6 of the Enforcement Act objections are raised against the eviction that are not clearly groundless, the demand for eviction shall not be upheld without being heard according to the rules of civil procedure.
Pursuant to the provisions of this section, eviction of users who are not co-owners may also be demanded.
Section 28. Bylaws
All co-ownerships shall have bylaws. These shall at least state the designation of the property in the real property register and the number of members the board shall have.
The bylaws may, with the exception of the original bylaws, cf. section 7, first paragraph (d), only be adopted or amended by the general meeting of the co-ownership. Unless more stringent requirements are provided by the Act, such decisions may only be made with at least a two-thirds majority of the votes cast. Section 30, third paragraph, shall also apply here.
Obligations that follow from the co-ownership, and that are laid down in registered provisions of the bylaws, are legally protected without registration against the co-owners’ creditors and against rights subsequently established in good faith in the property unit. The provision of this paragraph does not apply to mortgage.
Chapter V. Decision-making authority
Section 29. The authority of general meeting of the co-ownership
The general meeting of the co-ownership has the highest authority in the co-ownership.
Section 30. Requirements regarding majorities and special limitations in the authority of the general meeting of the co-ownership
With the exceptions that follow from the Act or the bylaws, all decisions of the general meeting of the co-ownership require a simple majority of the votes cast.
A majority of at least two-thirds of the votes cast is required for decisions of the general meeting of the co-ownership concerning:
a) rebuilding, extension or other alterations to buildings or land that under the circumstances in the co-ownership fall outside normal management and maintenance,
b) conversion of common areas to new units or extension of existing units,
c) sale, purchase, letting or renting of real property, including property unit in the co-ownership that belong to or will belong jointly to the co-owners,
d) other legal transactions in respect of real property that fall outside normal management,
e) consent to change in the purpose of one or more units from residential purposes to other purposes or vice versa,
f) consent to redivision as referred to in section 12, second paragraph, second sentence,
g) measures associated with the co-owners’ residential and use interests which fall outside normal management and maintenance when such measures involve financial liability or outlays for the co-owners amounting to over 5 per cent of the annual joint costs.
Decisions concerning sale or lease of the whole or major parts of the property and decisions involving major changes in the character of the co-ownership require the agreement of all of the co-owners.
Section 31. The decision-making authority of the board
Decisions requiring only a simple majority of the general meeting of the co-ownership may also be made by the board unless otherwise provided by statute or bylaws or a decision of the general meeting of the co-ownership in the case concerned.
Section 32. Protection of the minority
The general meeting of the co-ownership, the board or other persons who pursuant to section 43 represent the co-ownership may not make a decision likely to provide certain co-owners or other persons with an unreasonable advantage at the expense of other co-owners.
This rule shall apply correspondingly to provisions included in the original bylaws, cf. section 7, first paragraph (d).
Chapter VI. The general meeting of the co-ownership
Section 33. The general meeting of the co-ownership
All co-owners shall be entitled to participate in the general meeting of the co-ownership with a right to submit proposals, to speak and to vote. In respect of dwelling units, the co-owner’s spouse, cohabitant or another member of the co-owner’s household also has the right to attend and to speak.
The board members, business manager and tenants of dwelling units shall be entitled to attend the general meeting of the co-ownership and to speak. The chairman of the board and the business manager are obliged to attend unless it is clearly unnecessary or they have valid grounds for absence.
A co-owner may be represented by a proxy. The proxy may be withdrawn at any time. The co-owner shall be entitled to be accompanied by an adviser at the general meeting of the co-ownership. The adviser may only speak if so permitted by the general meeting of the co-ownership with a majority as referred to in section 30, first paragraph.
The ordinary general meeting of the co-ownership shall be held before the end of April each year. The board shall in advance notify the co-owners of the date of the meeting and of the last date for submission of matters for inclusion in the agenda.
An extraordinary general meeting of the co-ownership shall be held when the board finds necessary or when so demanded by at least two co-owners who jointly hold at least one-tenth of the votes, who shall at the same time state what matters they wish to raise.
Section 34. Notice of the general meeting of the co-ownership
The general meeting of the co-ownership shall be convened by the board with notice at least eight and at the most 20 days before the meeting is to be held. An extraordinary general meeting of the co-ownership may if necessary be convened at shorter notice, which shall nevertheless be at least three days.
If the general meeting of the co-ownership that is to be held pursuant to the Act, the bylaws or previous decisions of the general meeting of the co-ownership is not convened, the district court shall as soon as possible and at the joint cost of the co-owners convene a general meeting of the co-ownership when if so demanded by a co-owner, board member or business manager.
The notice shall be given in writing. It may be provided in the bylaws that the notice shall instead or in addition be given in another manner. Co-owners who do not themselves occupy a property unit shall in any case be entitled to receive written notice.
The matters to be dealt with at the general meeting of the co-ownership shall be specifically stated in the notice. If a proposal must be adopted by at least a two-thirds majority pursuant to statute or to the bylaws, the main content must be included in the notice.
Matters that a co-owner wishes to raise at the ordinary general meeting of the co-ownership shall be stated in the notice when a request to this effect is received by the board before the final date for submission of matters pursuant to section 33, fourth paragraph.
Section 35. Matters that the general meeting of the co-ownership shall and may deal with
The general meeting of the co-ownership shall deal with matters listed in the notice of the meeting.
Regardless of whether the matters are mentioned in the notice, the ordinary general meeting of the co-ownership shall,
a) consider the annual report of the board,
b) consider and, if appropriate, approve the board’s abstract of accounts for the previous calendar year and
c) elect board members.
The annual report, accounts and any auditor’s report shall, at the latest one week before the ordinary general meeting of the co-ownership, be sent to all co-owners whose addresses are known. These documents shall moreover be available at the general meeting of the co-ownership.
With the exception of the cases referred to in the second paragraph, the general meeting of the co-ownership may only decide matters listed in the notice of the meeting pursuant to section 34, fourth paragraph. Non-inclusion of the matter in the notice shall not however preclude a decision to convene a new general meeting of the co-ownership to decide proposals submitted in the meeting.
Section 36. Chairing of meetings. Minutes
The general meeting of the co-ownership shall be chaired by the chairman of the board unless the general meeting of the co-ownership elects another chairman, who need not be a co-owner.
The chairman of the meeting shall ensure that minutes are kept of all matters dealt with and all decisions made by the general meeting of the co-ownership. The minutes shall be signed by the chairman of the meeting and at least one co-owner, who shall be elected by the general meeting of the co-ownership from the co-owners attending. The minutes shall at all times be kept available for the co-owners.
Section 37. Decisions of the general meeting of the co-ownership
In co-ownerships that only contain dwelling units, the majority is calculated on the basis of the number of dwelling units in such a way that each unit provides one vote. In other co-ownerships, the majority is calculated on the basis of the co-ownership fraction unless otherwise provided by the bylaws, if so agreed by the co-owners concerned.
When counting votes, blank votes shall be regarded as not cast. When votes are tied, matters shall be decided by drawing lots.
No-one may himself or by proxy or as a proxy for another co-owner vote on an agreement with himself or close relatives or concerning his liability or that of close relatives. The same applies to voting on a sale order or demand for eviction pursuant to sections 26 and 27.
Chapter VII. The board and the business manager
Section 38. The board
The co-ownership shall have a board. The board shall have three members, unless otherwise provided by the bylaws.
The general meeting of the co-ownership shall elect the board by a simple majority of the votes cast. The chairman of the board shall be elected separately. No person who is not of legal age and capacity may be a board member. The bylaws may provide that only natural persons may be elected as board members. If persons other than natural persons are elected as board members, this shall take place by election of an appointed representative for such a person.
The general meeting of the co-ownership may also elect deputy members of the board. Further provisions concerning this may be laid down in the bylaws.
A board member shall serve at term of two years unless otherwise decided by the general meeting of the co-ownership.
When special circumstances exist, a board member shall have the right to retire before his term of office expires. The board shall receive reasonable advance notification of such retirement. The general meeting of the co-ownership may with a majority as referred to in section 30, first paragraph, decide to remove a board member from office.
In co-ownerships with eight or less property units, if so agreed by all co-owners, it may be laid down in the bylaws that all co-owners shall be members of the board. When a co-owner is not a natural person of full age and legal capacity, a representative shall be appointed as a board member. The same applies when a property unit has two or more owners. The general meeting of the co-ownership shall elect a chairman.
Section 39. Board meetings
The chairman of the board shall ensure that the board holds meetings as often as necessary. A board member or the business manager may demand that the board be convened.
The chairman of the board shall chair the board meeting. If the chairman of the board is not present and no vice-chairman has been elected, the board shall elect a chairman of the meeting.
The board has a quorum when more than half of all board members are present. Decisions may be made when more than half of the votes are cast. When votes are tied, the chairman of the meeting shall have the casting vote. Decisions nevertheless require that at least one-third of all of the board members vote in favour
The provisions of the third paragraph do not apply to a board consisting of all the co-owners, cf. section 38, sixth paragraph. In the case of such boards, votes shall be counted in the same manner as provided by section 37, first and second paragraph, and the board has a quorum when board members representing more than half of the votes are present.
The board shall keep minutes of its proceedings. The minutes shall be signed by the board members attending.
Section 40. Responsibilities of the board
The board shall be responsible for maintenance and management of the property, and otherwise conduct the affairs of the co-ownership in accordance with statutes, bylaws and decisions of the general meeting of the co-ownership. In this connection, the board shall, in accordance with section 31, make all decisions that are not assigned by the Act or the bylaws to other bodies.
Section 41. Business manager, etc.
The general meeting of the co-ownership may with a majority as referred to in section 30, first paragraph, decide that the co-ownership shall have a business manager.
Unless otherwise provided by the bylaws, it shall be the responsibility of the board to appoint a business manager and other executive staff, issue their instructions, fix their salaries, ensure that they carry out their duties and dismiss them with or without notice.
Appointment may shall be terminable with a period of notice that must not exceed six months. With a two-thirds majority, the general meeting of the co-ownership may consent that the agreement concerning business management shall be non-terminable by the co-ownership for a longer period, but not for longer than five years.
Section 42. Legal incapacity
A board member must not be involved in dealing with or deciding any matters in which the member himself or a close relative has a clear personal or particular financial interest. The same applies to the business manager.
Section 43. Representation
The board represents the co-owners and may sign on their behalf in matters concerning the co-owners’ joint rights and obligations, including implementation of decisions made by the general meeting of the co-ownership or of the board and rights and obligations regarding common areas and real property otherwise. If so agreed by all the co-owners, it may be provided in the bylaws that two or more board members shall be required to sign jointly on behalf of the co-owners.
In matters concerning normal management and maintenance, the business manager may represent the co-owners in the same manner as the board.
Legal action may be brought by or against the chairman with binding effect for all co-owners in matters as referred to in the first paragraph, first sentence. If the chairman has not been elected, legal action may be brought against any board member with the same effect.
If the board, board members or business manager have exceeded their authority, the disposition shall not be binding for the co-owners if the co-owners prove that the co-contractor understood or should have understood that his authority was exceeded and that it would be a breach of honour and good faith to uphold the disposition.
Chapter VIII. Accounts and audit
Section 44. Accounts
The board shall ensure the maintenance of proper and adequate accounts. The accounts for the previous calendar year shall be presented at an ordinary general meeting of the co-ownership.
In co-ownerships with 21 or more property units, the board shall ensure that accounts are maintained and annual accounts and an annual report are prepared in compliance with the provisions of or pursuant to the Accounting Act. The same applies to co-ownerships with nine or more property units when less than three-quarters of the property units are dwelling units.
Section 45. Audit
Co-ownerships with 21 or more property units shall have one or more state authorized or registered auditors. The same applies to co-ownerships with nine or more property units where less than three-quarters of the property units are dwelling units. In other co-ownerships with more than eight property units, the accounts shall be audited by a person elected by the general meeting of the co-ownership. The general meeting of the co-ownership with a simple majority of the votes cast may otherwise decide that the co-ownership shall have an auditor.
The auditor shall be appointed by the general meeting of the co-ownership. The auditor shall serve until another auditor is appointed.
The auditor shall be entitled to attend the general meeting of the co-ownership and to speak.
If the co-ownership has a state-authorized or registered auditor, the provisions of the Auditors Act shall apply in so far as they are appropriate.
Chapter IX. Entry into force, transitional provisions, repeal and amendment of other Acts
Section 46. Entry into force
This Act shall enter into force on the date decided by the King1.
From the same date, the Act of 4 March 1983 relating to property units shall be repealed.
1) From 1 January 1998 pursuant to the Royal Decree of 5 December 1997 No. 1256.
Section 47. Transitional provisions
The provisions of section 2, first and second paragraph, shall not apply when the right of use was established prior to the entry into force of this Act. Enlargement, renewal or extension is deemed establishment of a new right of use if the user does not hold a right to the alteration. The provisions of section 2, second and third paragraph, shall not apply when the lien has been afforded legal protection against the co-owner’s creditors prior to the entry into force of this Act.
The provision of section 3 does not apply to a special right of ownership that is lawfully established prior to the entry into force of this Act.
The provisions of sections 5–13 do not apply to division into property units carried out in compliance with an application submitted prior to the entry into force of this Act. The application shall be considered pursuant to the Act of 4 March 1983 No. 7 relating to property units. Multi-unit co-ownerships to which this Act applies may be registered in the Register of Business Enterprises.
The provisions concerning purchase option in sections 14–18 shall not apply when division into property units is carried out in compliance with an application submitted prior to the entry into force of this Act. In connection with such division, the provisions concerning purchase option of the Act of 4 March 1983 No. 7 relating to property units shall apply.
The provision of section 22, fifth paragraph, shall not apply when division into property units is carried out in compliance with an application submitted prior to the entry into force of this Act.
Statutory liens pursuant to section 25 of the Act, cf. section 6-1, third paragraph, of the Act of 8 February 1980 No. 2 shall rank behind encumbrances afforded legal protection against the co-owner’s creditors prior to the entry into force of this Act unless otherwise provided by the ordinary rules of priority.
The provision of section 37, first paragraph, involves no amendment of the voting rules in co-ownerships where division into property units has been carried out in compliance with an application submitted prior to the entry into force of this Act. In such co-ownerships it may however be provided in the bylaws, if so agreed by all the co-owners, that the above-mentioned provision shall apply.
Agreements or provisions that are in contravention of this Act shall cease to apply at the latest one year after the entry into force of this Act unless otherwise provided by the Act.
Section 48. Amendment of other Acts
From the entry into force of this Act, the following provisions in other Acts shall be amended as follows: - - -