Property seizure and co-ownership: recovering a lot's unpaid charges

A co-owner stops paying service charge calls. The property manager's (syndic) reminders go unanswered, the debt grows quarter after quarter, and the other co-owners are made to fund the shortfall in the forecast budget against their will. Beyond a certain threshold, seizure of the lot becomes the heaviest recovery tool available to the co-ownership association (syndicat des copropriétaires), but also the most effective. This guide explains when the association can bring it, how the association's special privilege ranks against other creditors, and how the price obtained at auction is then distributed.

When the co-ownership association can bring a property seizure

Property seizure is never the first reflex. It is the culmination of an entrenched default, once friendly reminders and conventional recovery procedures have been exhausted. Three conditions must be met before resorting to it.

Charges falling due and acceleration

Co-ownership charges fall due according to the timetable voted at the general meeting, call by call. But the law speeds up the mechanism in the event of default. Article 19-2 of Law No. 65-557 of 10 July 1965 setting the status of co-ownership of built property provides that, where an advance on the forecast budget is not paid on its due date, the following advances that have not yet fallen due become immediately payable.

Where an advance (...) is not paid on its due date, the other advances (...) not yet due become immediately payable following a formal notice (...) that has remained unanswered for more than thirty days.

In practical terms, a formal notice by registered letter with acknowledgement of receipt triggers, after thirty days without payment, acceleration of the debt (déchéance du terme). The property manager can then claim all the advances for the financial year at once, which swells the claim and makes heavier action justifiable sooner.

Obtaining an enforceable title, a mandatory prerequisite

No property seizure is possible without an enforceable title. Article L.311-2 of the French Code of Civil Enforcement Procedures (Code des procédures civiles d'exécution, CPCE) is categorical: the procedure may be pursued only under an enforceable title establishing a liquid and due claim. A mere invoice for unpaid charge calls is not enough.

The association must therefore first take its claim to court. Three routes are open depending on the amount and the degree of dispute:

• the order for payment (injonction de payer), a fast procedure on application to the judicial court, suited to claims that are not seriously disputed;
• interim payment proceedings (référé-provision), which make it possible to obtain a provisional title where the obligation is not open to dispute;
• a summons on the merits, which is longer but unavoidable as soon as the co-owner challenges the regularity of the calls or the validity of the meeting's decisions.

The judgment ordering payment, once served and enforceable, is the title that opens the door to property seizure.

The property manager can act without a special mandate from the general meeting

A common misconception is that the property manager must call a meeting to be authorised to seize a co-owner's lot. That is wrong for the recovery of charges. Article 55 of Decree No. 67-223 of 17 March 1967 requires authorisation from the general meeting to bring legal proceedings, but expressly exempts actions to recover debts. The property manager can therefore start the order for payment procedure, then the seizure, without a prior vote. The question of the authorisation the property manager needs in order to bring a property seizure against a debtor co-owner is examined in more depth in our dedicated article.

This flexibility has a counterpart: the property manager's liability. Bringing a property seizure for a modest claim, out of proportion with the value of the lot and the costs generated, exposes the property manager to criticism over its management. The decision must remain measured and documented, even though it does not require a formal resolution.

The stages of seizure of the lot

Once the title is in hand, the procedure follows Articles L.311-1 et seq. and R.311-1 et seq. of the CPCE. It takes place under the supervision of the enforcement judge (juge de l'exécution, JEX) of the judicial court for the place where the building is located, and requires representation by a lawyer.

The payment order constituting attachment

It all begins with service, by a commissaire de justice (bailiff), of a payment order constituting attachment (commandement de payer valant saisie) (Article R.321-1 CPCE). This instrument summons the debtor co-owner to pay and warns that, failing payment, the lot will be sold. It is then published at the land registry (service de la publicité foncière) within two months.

Publication has a major effect: the lot becomes unavailable. The co-owner can no longer sell it freely, and the fruits (rents, for example, if the lot is let) are likewise applied to the procedure. For a defaulting landlord, this effect is immediate and often decisive.

The orientation hearing before the enforcement judge

The debtor is then summoned to an orientation hearing (Article R.322-15 CPCE). This is the central moment of the procedure. The enforcement judge checks the regularity of the seizure, rules on the challenges raised by the co-owner (validity of the title, amount of the claim, limitation), and decides on the orientation:

• either the judge authorises a private sale, fixing a reserve price and a time limit;
• or the judge orders a forced sale by auction, fixing the starting price and the date of the sale hearing.

Limitation issues are also settled before the judge. Limitation of co-ownership charges is subject to a shortened period of five years, and the property manager must take care not to let time slip between the default and the action.

Private sale or auction

The forced sale takes place by auction at the sale hearing, the building being awarded to the highest bidder. The price paid by the successful bidder then feeds the distribution among creditors. Where a private sale has been authorised, it must be concluded at the minimum price fixed and recorded by the judge, failing which the forced sale resumes its course. The full course of a judicial property sale, from seizure to auction, is described in our guide to that procedure.

Take a residence of forty lots in which a co-owner, a landlord, has stopped paying calls for funds for several financial years. After formal notice, acceleration and an order for payment that has become enforceable, the property manager has a payment order constituting attachment served. At the orientation hearing, the debtor raises no serious challenge: the judge orders the forced sale and fixes the starting price. The lot is knocked down, and the question then becomes the association's rank on the price.

The rank of the association's privilege, a decisive weapon

Obtaining the sale does not guarantee payment. Everything depends on the association's position among the competing creditors. On this ground, the law gives it a powerful but little-known protection.

The association's two forms of security

The association has two distinct forms of security, which must be carefully distinguished.

The first is the statutory mortgage under Article 19 of the 1965 Law. It secures all of the association's claims, but requires registration at the land registry. Its rank depends on the date of registration, like any mortgage. A far-sighted property manager registers it early, as soon as the debt becomes significant, in order to fix a rank before other creditors arrive.

The second, more formidable, is the association's special privilege provided for by Article 19-1 of the 1965 Law, which now refers to Article 2402 of the French Civil Code. This privilege has two advantages: it attaches specifically to the debtor's lot and it operates without any registration formality. Historically described as a hidden privilege (privilège occulte), it takes rank by operation of law alone, regardless of any publicity, which makes it enforceable even without any step by the property manager.

The two-tier rank of the special privilege

The special privilege does not cover the whole debt indefinitely. It is limited in time and ranked according to the age of the claims. It secures the charges of the current year and of the last four years that have fallen due, with two-tier treatment:

• for claims of the current year and of the last two years that have fallen due, the association's privilege ranks immediately above the seller's privilege and that of the lender of funds (prêteur de deniers);
• for claims of the two years before that period, it ranks immediately after the seller's privilege and that of the lender of funds.

This architecture is strategic. It means that, for recent charges, the association takes priority over the bank that financed the acquisition of the lot, which is exceptional in the landscape of French security. In other words, on the auction of the lot, the association will be paid before the mortgage lender for the most recent part of its claim. This statutory favour rewards the collective function of the charges: without their payment, the building deteriorates and the value of the security of all creditors collapses.

Hence a practical consequence for property managers: it is better to act quickly. A debt spread over six or seven financial years will see its oldest portions fall outside the scope of the privilege and become a mere unsecured claim, with no guarantee of recovery.

The impact of the reform of security law

Ordinance No. 2021-1192 of 15 September 2021 reforming the law of security, which entered into force on 1 January 2022, abolished the category of special real-estate privileges and converted them into special statutory mortgages, now grouped in Article 2402 of the French Civil Code. The association's privilege is one of them. The reform maintained the substance of the arrangement, in particular the preferential rank for recent claims and the previous time scope. In substance, the association therefore retains its favoured position, only the vocabulary having moved from privilege to special statutory mortgage. The regime of the special statutory mortgage of the co-ownership association for unpaid charges is dealt with separately in our article on that security.

Distribution of the auction price

The auction turns the lot into a sum of money. That sum, often below the market value of the property, almost never suffices to pay everyone. The distribution of the price, governed by Articles R.331-1 et seq. of the CPCE, follows a strict order.

The order of creditors

The auction price is distributed according to a statutory ranking. Paid first are the court costs incurred in the common interest of the creditors, then claims benefiting from a privilege or security according to their respective rank, and finally unsecured creditors (créanciers chirographaires), that is, those with no guarantee at all, who share any remainder pro rata (au marc le franc), often reduced to nothing.

Where a single creditor is pursuing, distribution is simple. As soon as several creditors compete, a draft distribution is prepared and notified, and may be challenged before the enforcement judge before it becomes final.

The association's position among the competing creditors

This is where the rank of the association's privilege takes effect. For the recent portion of its claim (current year and last two years that have fallen due), the association is allocated payment before the lender of funds and the seller. Returning to the example of the forty-lot residence: if the auction yields too little to pay both the bank and the association, the association will nevertheless be paid first for its recent charges, ahead of even the lending institution.

For the older portion (the two earlier years), the association ranks after the seller and the lender, which reduces its chances of being paid if the price is too low. As for unpaid charges going back more than five financial years, they lose all security and become unsecured. The message for property managers is constant: the value of the privilege is measured by the speed of action.

The fate of charges arising after the sale

The successful bidder becomes a co-owner and must pay the charges from its acquisition. In parallel with the distribution of the price, the property manager must therefore exercise its right of objection (droit d'opposition) with the notary or court officer in charge of the sale, on the basis of Article 20 of the 1965 Law. This right of objection makes it possible to block, out of the price, the sums owed by the former co-owner, in conjunction with the privilege. Neglecting this formality amounts to letting part of the recovery slip away.

Resolving a property seizure in co-ownership: alternatives and points to watch

Seizure is not an end in itself. The right resolution of a property seizure in co-ownership often consists in obtaining payment without going as far as the auction, or in securing each stage so that the sale actually results in the association being paid.

Alternatives to forced sale

Before tying up a lot through a long and costly procedure, several levers deserve examination. Attachment of earnings or attachment of the debtor's bank accounts (saisie-attribution) may suffice where the debtor has income. Where the lot is let, attachment of rents in the hands of the tenant captures the fruits directly. Early registration of the statutory mortgage under Article 19 makes it possible to fix a rank without immediately launching the sale, and carries considerable weight in a negotiation.

Property seizure retains its full meaning where the debtor is otherwise insolvent but owns a lot of value, or where the debt has reached a level that only the sale of the property can clear. It remains the last resort, to be reserved for situations where other routes are futile.

Errors that weaken the procedure

Several weaknesses recur and ruin recovery. The first is slowness: letting the debt exceed five financial years means losing the benefit of the privilege on the older portions. The second is irregularity of the title, where the meeting decisions underlying the charge calls are open to challenge or have been annulled. The third is failure to exercise the right of objection on the price, which lets the sums due slip away at the time of the transfer. The fourth is disproportion between the cost of the seizure and the amount recoverable, a source of liability for the property manager.

A preliminary audit of the claim, financial year by financial year, makes it possible to identify precisely the portion covered by the special privilege and the portion no longer covered, before deciding to incur the costs of a seizure.

Conclusion

Property seizure is the heavy weapon for recovering charges, and the co-ownership association does not come to it empty-handed: the special privilege under Article 2402 of the French Civil Code places it, for its recent claims, ahead of the mortgage lender itself. This favour has value only if the property manager acts early. Each financial year that passes without a title or action erodes the statutory protection and turns a privileged claim into an unsecured claim, statistically sacrificed in the distribution of the price.

The real know-how lies not in launching the seizure, but in the tempo: prompt formal notice to trigger acceleration, taking the claim to court without delay, a reasoned choice between attachment of income and seizure of the lot, and systematic exercise of the right of objection on the price. Before launching the sale of a lot, have a dated statement drawn up financial year by financial year and check what part of the debt still falls within the special privilege: it is this diagnosis, and not the procedure itself, that determines what the association will actually recover.

Frequently asked questions

Must the property manager obtain the general meeting's approval to bring a property seizure? No. Article 55 of Decree No. 67-223 of 17 March 1967 exempts the property manager from meeting authorisation for actions to recover debts, which includes a property seizure for unpaid charges. The property manager can therefore act alone. It nonetheless remains bound to assess the proportionality of the measure in light of the claim and the costs incurred.

Which unpaid charges does the association's privilege secure? The special privilege covers the charges of the current year and of the last four years that have fallen due. Claims of the current year and of the last two years that have fallen due rank ahead of the privilege of the seller and of the lender of funds; those of the two earlier years rank after them. Beyond five financial years, the debt is no longer secured and becomes unsecured.

Does the association rank ahead of the bank that financed the purchase of the lot? Yes, for the recent portion of its claim. The special privilege under Article 2402 of the French Civil Code, for the current year and the last two years that have fallen due, ranks immediately above the lender of funds' privilege. This is a rare advantage, justified by the collective role of the charges in preserving the building.

Must the association's privilege be registered for it to take effect? Not the special privilege under Article 19-1 of the 1965 Law, which has become the special statutory mortgage under Article 2402 of the French Civil Code: it takes rank by operation of law alone, without any publicity formality. The statutory mortgage under Article 19, on the other hand, requires registration at the land registry and ranks from its date of registration.

How long does the association have to act before its claim is time-barred? Co-ownership charges are subject to a five-year limitation period. The property manager must therefore start recovery before that period expires for each call for funds. The period may be interrupted by a formal notice followed by legal proceedings or by the co-owner's acknowledgement of the debt.

What happens if the auction price is not enough to pay the association? The price is distributed in the statutory order: court costs, privileged and mortgage creditors according to their rank, then unsecured creditors. The association is paid according to the position of its privilege, which has priority for its recent charges. The uncovered portion remains owed by the former co-owner, but its actual recovery depends on the latter's residual solvency.

What happens to the charges debt when the lot is sold to a new buyer? The property manager must exercise the right of objection provided for in Article 20 of the 1965 Law, with the notary or court officer in charge of the sale, in order to block out of the price the sums owed by the seller. Failing an objection within the time limits, the association risks losing the benefit of this retention and having to pursue the debtor by other routes.