Can the VvE claim compensation on behalf of its members?
An Owners’ Association (VvE, Vereniging van Eigenaren) has the task of managing the communal building. However, the VvE does not own the building. The VvE is the different apartment owners together. Within the limits of its powers, the VvE may represent the owners. But does that also mean that the VvE can claim compensation for leakage damage and loss of rent on behalf of the owners? Robert van Ewijk, an attorney specialized in VvE and property law, explains how it works.
Representation powers of the VvE
The provisions of Section 5:126 of the Dutch Civil Code) state that the individual owners may represent the individual owners in legal and extrajudiciary matters. However, an important limitation applies. Representation is limited to the the scope of the VvE’s powers. As the task of the VvE is to manage the communal sections of the building, this forms the limit of its power of representation. This means that the VvE has no power of representation for matters concerning the privately owned sections. If there is a leak that causes damage to both the communal and privately owned sections (this includes loss of rent issues), the VvE does not have the right to claim compensation for damage from the party responsible for the leak.
This can be problematic, as damage and losses often occur with overlap or concurrence in both the VvE managed communal sections and the privately owned sections. Last summer, the Court of Appeal of Arnhem-Leeuwarden rightly ruled that this in itself is not yet sufficient ground to assume that the VvE is entitled to bring a claim for losses suffered by the individual owners.
Is the VvE permitted to represent the owners in proceedings?
Nevertheless, it may be desirable for the VvE to institute the claims (also) on behalf of the owners. Not only so that the costs of proceedings can then be borne by the VvE, but also to enable the Court to immediately include all losses in the assessment. Additionally, it improves the efficiency of a procedure, for example when there are many owners and the VvE’s attorney needs the approval of all clients in the case to perform certain actions.
Solution: assignment, power of attorney or mandate
However, there is a solution to this a problem. The apartment owners may assign their claim to the VvE (assignment), or may instruct the VvE to assert the claims on their behalf (power of attorney). In both cases, the VvE may bring a claim on its own behalf. Alternatively, the VvE can be granted power of attorney to institute proceedings. In that case, the apartment owners remain the formal parties to the proceedings. For advice about which solution would be the best in your specific case, please contact AMS Advocaten to speak with a attorney specialized in VvE matters.