Resolution or Not? The Supreme Court on the Role of the Homeowners’ Associationplan

In its recent decision of March 16, 2025 (OGH 5 Ob 219/24b), the Austrian Supreme Court clarified that not every action by individual condominium owners qualifies as a resolution of the homeowners’ association. The key question is whether a collective decision was made or merely a private arrangement took place.

The applicant challenged two so-called decisions. In the first case, from 1995, a few attending co-owners authorized the building manager to purchase a neighboring property in his own name. This transaction was not carried out on behalf of the homeowners’ association.

The second case, from 2014, involved a formal resolution allowing the property manager to conclude a lease agreement on behalf of the association. The leased area, part of an adjacent property, was used as a parking lot and contained essential underground pipelines of the residential complex.

The applicant sought to have both decisions annulled. However, both lower courts rejected her claims, and the Supreme Court upheld these rulings.

The Court's reasoning was clear: In the 1995 case, there was no valid resolution by the homeowners’ association. The authorization granted by individual co-owners to act in a personal capacity had no legal effect on the association. As there was no collective decision-making, no challengeable resolution existed.

In contrast, the 2014 lease agreement was based on a legitimate resolution. It served a clear communal interest by securing parking and avoiding the costly removal of underground infrastructure. The Supreme Court classified this as an ordinary administrative matter. Such decisions are valid but must be challenged within the statutory time limits. Unlimited legal challenges would undermine legal certainty.

Conclusion:A legally valid resolution requires collective agreement within the homeowners’ association. Private arrangements among individual owners have no binding effect on the group. Communal administrative decisions are legitimate but only challengeable within legal deadlines.