Stentors recently represented a client, a member of a land ownership community – in a case concerning the invalidity of resolutions adopted at a meeting which significantly affected the client's rights, in particular by the fact that the committee of the land ownership community pushed through a decision at the meeting of land owners that

(i)   each community member at the meeting would have only one vote regardless of the size of their share, and

(ii)  the statutory right of first refusal would be extended to include the obligation to offer one's share for sale to the land community committee.

The case was brought before the Supreme Court of the Slovak Republic under case number 2Cdo/100/2023, which dismissed the extraordinary appeal. In its reasoning, the court confirmed the legal opinion expressed by Stentors.

The fundamental legal conclusions with the reasoning of the Supreme Court of the Slovak Republic, which dismissed the appeal, are as follows:

Who can file a lawsuit and other conditions for active legal standing

In its decision, the Supreme Court of the Slovak Republic confirmed that every member of the land community is actively entitled to file a lawsuit for the invalidity of a decision of the assembly

(i) without any limits, restrictions or other conditions, including the condition of a minimum number of two members, and

(ii) it is not necessary to prove an urgent legal interest or the fact that the member of the land community was deprived of his rights by the decision in question.

The Supreme Court of the Slovak Republic further stated that the appellant's legal argument referring to the commentary on the provision of Section 15(2) of the Land Communities Act, which states that the plaintiff (the outvoted member of the land community) must prove that he was deprived of his rights by the decision of the assembly,

otherwise, the courts should not grant such claims with reference to the inspirational judgment of the Regional Court in Banská Bystrica, is incorrect. This is the isolated opinion of the regional court as the court of appeal, expressed in the conclusion of its decision, which the Supreme Court, as the highest judicial authority in the general court system, did not follow or confirm. The Supreme Court of the Slovak Republic has thus clearly stated that the legal conclusions of the authors of the commentary in question are incorrect and that no further condition, other than a declaration, is necessary to bring an action for annulment of the decision of the assembly.

Analogy of the land ownership community meeting with the legal regulations of other meetings

In his appeal, the appellant also argued that the appellate court had deviated from the case law of the court of appeal, referring to decisions of the Supreme Court of the Slovak Republic concerning the invalidity of a general meeting of a limited liability company under the Commercial Code and the invalidity of a decision of a meeting of owners of apartments and non-residential premises under the Act on Ownership of Apartments and Non-Residential Premises, where the Supreme Court of the Slovak Republic clearly stated that these were factually and legally unrelated decisions to the dispute under consideration, referring to its previous decisions on the question of the possible analogy of the Commercial Code in matters of land communities.

Members of the land ownership community, their rights and registration

Similarly, the Supreme Court of the Slovak Republic has clearly stated that the method of registering community members on a specific date cannot be to the detriment of a community member if the registration does not accurately reflect the actual situation.

On the contrary, the Supreme Court of the Slovak Republic pointed out the obligation to enter changes in the registered facts in the list of community members and in the list of real estate within five days of their notification. The appellant's argument that only those members of the community who were registered in the community register as of December 31 of the previous calendar year (i.e., even those who were no longer members of the community) could exercise their rights at the meeting was rejected. The Supreme Court of the Slovak Republic clearly stated that such an interpretation would not be in accordance with the law emphasizing one of the most important rights of a member of the community, namely the right to participate in meetings of the assembly consisting of all members of the community (without exception and regardless of the size of their co-ownership share) and to vote at such meetings.

Mandatory and dispositive nature of the provisions of the law

Concerning the dispositive nature of the provision of Section 15(1) of the Land Communities Act, the appellant sought confirmation that this is a dispositive provision, and therefore it is possible to regulate the votes of the members of the community at the meeting differently from the statutory provision, which states that each member of the community has the same proportion of votes in the decision-making of the meeting as he or she is entitled to according to the proportion of the community member's participation in the exercise of rights and obligations. These arguments are also based directly on the commentary (same publication as mentioned above in relation to the standing to bring an action for an annulment of the assembly's decision) on the provision of Section 15(1) of the Land Communities Act, to which the appellant referred several times.

The Supreme Court of the Slovak Republic ultimately did not address this issue, as the regional court correctly determined the invalidity of the assembly's decision on substantive and legal grounds due to the lack of a quorum for voting (procedural reason) and therefore did not have to address the issue of the content of the decision, i.e. the change in the number of votes so that each member of the community would have only one vote regardless of their share in the exercise of rights and obligations. However, it quoted the reasoning of the regional court, which clearly stated that this would be contrary to the provisions of Section 9(4) and Section 15(1) of the Land Communities Act and Article 20 of the Constitution of the Slovak Republic.

Regulation of the right of first refusal

The Supreme Court of the Slovak Republic rejected the appellant's arguments regarding the "clarification" of the process of the offer obligation of the statutory right of first refusal, which de facto and de iure was an extension of the obligations of the statutory right of first refusal of members of the land community to offer their share to the land community committee beyond the scope of the statutory regulation. The appellant argued that it was "only a clarification", but the Supreme Court of the Slovak Republic referred to the text of the legal norm in the provision of Section 9(8) of the Land Communities Act and stated that it is not possible by any interpretation to overcome replace the non-existent will of the legislator regarding the possibility of the committee's right of first refusal and that such an extension of the co-owners' obligations beyond the scope of the law is not permissible.