Another amendment to the new Civil Code and Corporations Act
In late September, a group of deputies submitted to the government a bill partly modifying the yet unamended core regulations of the new private law – the Civil Code and the Act on Corporations. The proposed changes mostly concern unit owners’ associations and housing cooperatives.
The bill submitted by a group of deputies headed by Jeroným Tejc has a rather narrow focus, as it deals with essentially three topics. First, and without any further context, the deputies propose reintroducing to the new Civil Code the pre-emptive right to a co-ownership share in real property. Another topic involves unit owners’ associations: to facilitate their functioning, several changes are being proposed. The process of approving changes to statements dividing real property into units is to be simplified. Furthermore, when transferring the ownership of units, it should be unambiguously stipulated that any transferor’s debts connected with the administration of the building and land shall pass on to the transferee (the acquirer). And, to make credit financing more accessible for housing cooperatives, the deputies propose explicitly stipulating that the unit owners’ associations may assume, accede to, or otherwise secure the cooperative’ s debt arising from a loan taken for repairs or modernisation of the building.
The regulation of cooperatives in the Corporations Act is to be modified, namely as regards the convening of members’ meetings: apart from publishing the invitation on a website, a meeting may also be convened by publishing the invitation on the cooperative’s notice board. The decision-making on some changes to the articles of association should also be simplified.
The bill is now waiting for discussion by the Chamber of Deputies. However, it has not been okayed by the government. In its dissenting opinion, they mainly pointed out that the proposal only contains fractional changes and lacks a comprehensive approach to the issues. The ministers of the government pointed out that they would prefer a more comprehensive intervention in the legal regulation of unit owners’ associations and housing cooperatives, referring to their own proposed amendment to the new Civil Code, which has now, nearly a year after its submission, passed through the third reading in the chamber and is waiting to be discussed by the senate.
For the sake of completeness, please note that an amendment to the Corporations Act is also waiting in the legislative pipeline: it concerns the obligatory participation of employees in supervisory boards of joint stock companies and is at the moment approaching its third reading. However, we are likely to see a larger legislative effort concerning the Corporations Act soon: the Ministry of Finance has completed an extensive amendment which is just being released for the commenting procedure.