Legal Updates

A condominium bylaws trump over specific management agreements the preceded it with regards to payment of management fees

October 8, 2021

A management company of a commercial building registered as a condominium demanded from unit holders to pay management fee as per the specific management agreements signed with it, while the condominium bylaws recorded after the execution of the management agreements set that management fee is paid pro rata to the size of the unit compared to the area of all units.

The Court held that the method for payment of management fees set in the bylaws trump over the method set in the management agreements. A condominium may be compared to the constitutional structure of a country with the bylaws being the constitution, the general assembly of the units owners the legislative body and the representative committee of the holders being the government. A condominium is managed under the bylaws that sets the relationship between the unit holders and their rights and obligations regarding the condominium. The bylaws are valid also vis-à-vis a person who purchased a unit after the bylaws were recorded. Registering a condominium cancels contractual obligations that preceded the registration if such contradict the registration and the bylaws trumps over contractual obligations that preceded the registration of the condominium. Here, the management company is the one who managed the registration of the condominium and the bylaws and the provisions of the bylaws trump over the structure of payment of management fees set in the management agreements that preceded the registration.