The vast majority of apartment buildings today on the territory of the Russian Federation are managed by management companies that are engaged in maintaining and ensuring high-quality maintenance of common property in such buildings.
However, in some cases, management contracts are terminated for various reasons, including at the initiative of the management company itself. How does the process of terminating a management contract and subsequent change of management company take place? Dear readers! To solve your specific problem, call the hotline or visit the website. It's free.
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Is it possible to terminate an agreement with a management company?
In principle, in order to abandon the management company, it is enough that the owner expresses dissatisfaction with the work performed and its quality. If there are many owners expressing indignation, then the replacement of the Criminal Code will take place without any obstacles (Article 162 of the Housing Code of the Russian Federation).
The reasons may be:
- failure to provide the management company with the necessary information requested by the owner (read about the rules for disclosing information here);
- failure to perform home maintenance responsibilities;
- refusal to provide services specified in the agreement;
- poor quality of work and services provided;
- expiration of the agreement;
- negative approach and incorrect attitude towards owners (rudeness, rudeness, etc.).
Attention! In all other situations, any reason will need to be proven, and most often in court.
As you can see, in certain cases you can refuse the services of a management company.
The housing inspector may not like unilateral termination of the contract
The Arbitration Court of the West Siberian District decided that the State Housing Inspectorate cannot arbitrarily refuse to make changes to the register of licenses. If, when considering the application of the Criminal Code, the inspection finds signs of the nullity of the decision of the general meeting, this is a basis for challenging the decision in court, and not for refusing to make changes to the register of licenses (case No. A27 - 21529/2020).
At an extraordinary general meeting, the owners from Novokuznetsk terminated the management agreement with the management organization and concluded it with a new management company. The new management company posted information about the management of apartment buildings on the website of the GIS Housing and Communal Services and sent applications to the State Housing Inspectorate of Kuzbass to amend the register of licenses to include information about the management of apartment buildings.
The inspectorate refused to make changes to the register of licenses, considering that the unilateral refusal of the owners did not comply with Part 8.2 of Art. 162 Housing Code of the Russian Federation. The Criminal Code appealed the refusal in court.
The courts of first and appellate instances upheld the claim. They concluded that the refusal does not comply with the law and violates the rights and legitimate interests of society. The supervisory authority did not agree with the court decisions and appealed them.
The Arbitration Court of the West Siberian District supported the Criminal Code. The inspectorate refused to include the management company’s data in the register, citing the fact that the management company’s documents do not comply with the requirements of subparagraph “e” of paragraph 5 of the Procedure and deadlines for making changes to the register of licenses of an entity (Order of the Ministry of Construction No. 938/pr), having seen in the documents signs of the nullity of the decision of the general meeting , since “the decision made by the owners, in particular, to terminate the management contract with the previous management company, contradicts the fundamentals of the rule of law.”
Refuting this argument, the court noted:
- contrary to the conclusion of the inspectorate, violations when the general meeting made decisions on the choice of a management organization can serve as a basis for challenging such a decision in court and does not apply to the absolute grounds for its nullity;
- owners have the right to unilaterally refuse the management agreement if the management company does not fulfill its obligations;
- The owners' decision to choose a management company was not challenged.
Taking into account these circumstances, the courts rightly declared the inspectorate’s decision invalid and imposed on the defendant the obligation to eliminate the violation of the rights and legitimate interests of the management company by re-examining the company’s application.
Step-by-step instructions: what needs to be done?
- Creation of an initiative group.
- Conducting explanatory conversations with all residents of the house.
- Preparing for the meeting.
- After the expiration of the agreement with the management company, a general meeting is held with proposals to abandon the management company and the votes of each resident are collected.
- Making a collective decision to replace the management company.
There are situations that require immediate intervention and termination of relations with the management company as a matter of urgency. In this case , you should not wait until the contract expires, but you need to start taking action.
From separate publications by our experts, you can learn about how and on what basis the management company forms tariffs for apartment buildings, as well as what the instruction to the owner from the management company means.
Can a management company terminate a contract unilaterally and what is it?
The Civil Code of the Russian Federation, which considers various possibilities for terminating property management contracts in an apartment building, in particular, a service contract, states that any of the parties participating in the contract has the right to terminate it at its own discretion at any time by drawing up an appropriate additional agreement or unilaterally through the use of a judicial mechanism, if we are talking about repeated failure to fulfill obligations that are provided for the other party.
Based on such positions of the legislator specified in the Civil Code, as well as the provisions of the Housing Code of the Russian Federation, the management company has the right to exercise its right to terminate the property management agreement of an apartment building unilaterally.
However, this will require fairly compelling reasons that can prove not only that the maintenance of a particular house is unprofitable for the management organization (if we are talking only about the unprofitability of the service, then termination of the management contract will be considered illegal), but also the failure to properly perform on the part of the owners of the premises in apartment building the obligations assigned to them under the contract. In order for a failure to fulfill obligations to be recognized as truly existing, the contract must not be properly fulfilled by at least twenty-five percent of the owners of premises in an apartment building , if we are talking about failure to fulfill any one condition, and at least fifty-one percent, if we are talking about violations several terms of the contract (the total number of violators is summed up)
The management company will not be able to terminate the contract by simply refusing to fulfill its obligations (except when it comes to fixing such a mechanism in the text of the contract itself).
In order for unilateral termination of a contract at the initiative of the management organization to be recognized as legal, a special court decision must be made. Otherwise, penalties may be imposed on the management organization, and the license to provide a certain type of service may be revoked in accordance with the provisions of the Housing Code of the Russian Federation.
Providing evidence
According to the law, owners have the right to terminate the agreement with the management company early.
But to make such a decision, supporting evidence is required. One of them may be non-compliance with the conditions stipulated in the concluded agreement.
For example, according to certain clauses, it undertakes to clean the entrances and adjacent areas. But these obligations were never fulfilled, despite complaints from residents. However, each owner paid a monthly fee for these services.
Or an unfair attitude and approach to repairs. We replaced the water pipe, but the problems that existed before its replacement remained.
Incorrect and unreliable data reflected in reports for residents are also significant evidence of the guilt of the management company. For example, one quantity of materials consumed is prescribed, but in fact much less is installed. The price of the work may also be incorrectly reflected and may be inflated.
The following situation is also possible: management company employees collect money monthly for repairs, for example, of a roof. They promise that repairs will be made soon, but, unfortunately, they do nothing. Residents' complaints and questions are not responded to. No documentation is provided.
Violations related to the standards for performing repair work often occur. For example, a faucet is leaking in the bathroom, and 4 hours are allotted to fix this problem. And in the end, the worker comes a few days later.
Reference! All violations must be remembered and taken into account. Before holding a general meeting of residents, you must request from the management company all documents related to the execution of work and provision of services.
Next, it is better to analyze the received papers along with the claims and complaints of residents to the management company, reports of inspections carried out by third-party authorized organizations.
We talked about which organizations are authorized to control the management company here, and from this article you will learn how else you can deal with the inaction and deception of managers.
The management company does not agree with the unilateral termination of the contract
The Eighth Court of Cassation of General Jurisdiction considered the dispute concerning the unilateral termination of the contract between the management company and the owners of the premises (case No. 88 – 13432/2021). The cassation instance considered the issue of the owners’ right to unilaterally refuse the management agreement and what grounds are necessary for this.
In this case, the Raduga Management Company learned from a message from the State Housing Inspectorate of the Kemerovo Region that it had received the minutes of the general meeting with a decision to terminate the management agreement with the Raduga Management Company and conclude a management agreement with the Severnaya Management Company. At the same time, the notice of termination of the contract and the minutes of the general meeting were not received by the Raduga Management Company.
Management Company "Raduga" did not agree with the decision to terminate the management contract and appealed it in court. In the lawsuit, the management company referred to the illegality of the early termination of the contract by the owners, since the management company did not allow significant violations of the terms of the management agreement.
The courts of first and second instance rejected the claim. Based on the complaint of the Criminal Code, the case was considered by the Eighth Court of Cassation of General Jurisdiction.
The cassation court noted that the Criminal Code has the right to challenge the insignificance of the general meeting. However, the Criminal Code substantiated its demands not by the flaw in the decision of the general meeting, but by the fact that the defendant and other owners have no grounds for unilateral refusal of the apartment management agreement.
The court referred to the following norms of the Housing Code of the Russian Federation: - changes and (or) termination of the management agreement for an apartment building are carried out in the manner prescribed by civil legislation (Part 8 of Article 162); - the owners of premises in an apartment building, on the basis of a decision of the general meeting, have the right to unilaterally refuse to fulfill the management agreement for an apartment building if the management organization does not comply with the terms of such an agreement, and decide to choose another management organization or to change the method of managing this house (Part 8.2 of the article 162 Housing Code of the Russian Federation).
The court found that many owners were dissatisfied with the service provided by the plaintiff: the entrances were not cleaned, the grass on the site was not cut until July, and the roof was not repaired. The shortcomings in the execution of the contract are also recognized by the company itself, which indicated that the appeals and complaints of citizens themselves cannot indicate the failure of the management company to fulfill the terms of the management contract.
Having analyzed the totality of civil law and housing law, the court noted:
- Having once chosen an organization to provide services for the maintenance and current repairs of the common property of apartment buildings, the owners of the premises are not deprived of the opportunity to terminate the relevant contract, including through unilateral refusal.
- The law provides that an independent condition for termination of an agreement may be failure to comply with the terms of such an agreement of the Criminal Code.
- Contrary to the arguments of the cassation appeal, the law did not establish a criterion for the materiality of the violation for such a refusal. On the contrary, given that one of the parties to the contract, as a rule, are individuals, the current legal regulation reduces the standard of requirements for violations that may serve as grounds for termination of the management contract for an apartment building.
- The absence of acts of violation of quality or exceeding the established duration of a break in the provision of services or performance of work cannot deprive the owner of premises in an apartment building of the right to unilaterally withdraw from the contract, given that the law does not impose requirements for means of proof that can confirm violations committed by the management company.
The Cassation Board upheld the judicial decisions.
Collection of documents
The package of documents must contain:
- Copies of all claims, as well as complaints from apartment owners about violations of the concluded agreement by the management company.
- Copies of documents on inspections of the work activities of the management company.
- A document that records all the information from a meeting of residents of the house, and a decision was made to change the management code.
- Copies of documents - claims recorded in consumer supervision authorities, the prosecutor's office and other supervising organizations.
- Other Related Documents and Notices.
About notifications
Notifications of the meeting are sent to each owner, the management company and the district administration (in the case of non-privatized residential premises). Representatives of the municipality speak at such meetings as owners of non-privatized apartments.
The notice of termination of the contract must contain the following information:
- subject;
- information (questions) about choosing a new management company (read how to choose a new management company here);
- contact details of members of the initiative group to clarify any questions that have arisen;
- place, time and date of the general meeting.
For your reference, we have provided a sample notice of termination of the contract with the management company.
The notification with the adopted decision for the management company consists of:
- decisions and legal justification with reference to laws (Article 162 of the RF LC and Article 450 of the RF Civil Code);
- the grounds for the decision (voting at a general meeting, court ruling, etc.).
Concluding an agreement with a management company in the housing and communal services sector
The contract with the management company is concluded for a period of 1 to 5 years.
The subject of the management agreement is the provision by the management company of services and performance of work for the proper maintenance and repair of common property in an apartment building, as well as the provision of utilities to the owners of the premises of the building. The party to the management agreement is, on the one hand, the management organization, on the other, all owners of the premises of the house or HOA, housing cooperative represented by its authorized body.
The management agreement has not been concluded with all owners
The Housing Code contains a rule according to which a management agreement must be concluded with each owner of the premises (Article 162 of the Housing Code of the Russian Federation). Some citizens, having interpreted this rule of law in their own way, believe that if a management agreement with a specific owner is not signed, then this owner has no obligations under the management agreement. This is a misunderstanding of the law.
The basis for the obligation to make payments under the management agreement for an apartment building is the decision of the general meeting of owners (not appealed in court or recognized by the court as legal) on the choice of method of managing the house, the choice of a specific management company. If the management agreement is signed by the majority of owners, then the fact that a number of owners do not sign the agreement does not affect the legal relations that have already arisen. All property owners are now required to pay the management company.
Termination of the house management contract with the management company
As a general rule, termination of a contract is possible by agreement of the parties or by a court decision. This is also indicated in Part 8 of Article 162 of the RF Housing Code.
The management agreement for an apartment building is also terminated if its validity period expires, if the parties (owners by decision of the general meeting or the management company) declared termination of the agreement before the expiration of the specified period.
By a court decision, in accordance with Part 2 of Article 450 of the Civil Code of the Russian Federation, the contract may be terminated in the event of a significant violation of the contract by the other party, as well as in other cases provided for by law or contract.
Another case is provided for in clauses 8.1., 8.2. Article 162 of the Housing Code of the Russian Federation, according to which owners have the right to refuse the services of the management company unilaterally if the latter does not comply with the terms of the management agreement.
- See below Unilateral refusal of the management company (apartment management agreement).
Return to the beginning of the review of judicial practice: “Change of a management company in the housing and communal services sector. Judicial practice”, which answers the questions “is it possible to unilaterally refuse a management agreement with a management company and choose another management organization”, “is it necessary to prove that the management company does not comply with the terms of the management agreement for an apartment building”, “what is the practice arbitration courts and courts of general jurisdiction on the issue of refusal of services of a management company (change of management company)?
Getting ready for the meeting
Step-by-step instructions for holding a meeting.
- The initiators are actively preparing for the meeting. The composition of the initiative group is approved by all participants during the preliminary meeting.
- This is followed by a request for all necessary documentation to the management company (reports on all work performed and services provided). It is also necessary to collect all claims and complaints from the owners, as well as appeals to the authorities exercising control, and make copies of these documents.
- At the next stage, all collected papers are analyzed. As a result, it is necessary to make a conclusion about whether there are sufficient grounds for abandoning the Criminal Code.
- Next, the location for the general meeting, date and time are selected. A separate place should be allocated for storing all important documents so that they are not damaged, and anyone can easily view them. It is necessary to talk with each owner before the meeting in order to collect as many votes as possible against cooperation with the offending management company.
- Then notifications are sent to all participants (tenants, management companies, etc.). Each notification is transmitted in person with a signature indicating receipt, or it is sent in the form of a registered letter by mail.
- The meeting is held no later than three months before the expiration of the agreement concluded with the management company. Otherwise, the claims in court will be rejected. At the final stage, a meeting is held.
- After the meeting, the management company receives a notification with the decision (a copy thereof). After which the management company is obliged to transfer all powers and documents to the new company chosen by the homeowners.
Sometimes a meeting is followed by going to court. A statement of claim is written and, with all the collected evidence, forwarded to the authority.
Important! The contract can be terminated either by a court decision or by a decision of the meeting. In the second case, the owner must personally terminate the agreement with the management company by sending a notice with the grounds and decision of the meeting.
