Source: https://www.juridicainternational.eu/index.php?id=14190
Timestamp: 2019-04-23 10:53:00+00:00

Document:
Since the Apartment Ownership Act *2 (AOA) is largely based on the Apartment Ownership Act of the Federal Republic of Germany of 1951 *3 (WEG), I will present a comparative overview of the problems discussed in the local jurisprudence in relation to the community for decades. The German legislator has arrived at the amendment of WEG, by which a community of apartment owners has been given a limited passive legal capacity that was recognised by judicial practice already before. The passive legal capacity of a community of apartment owners has also been recognised in many other legal orders and the AOA also needs to be supplemented.
The Principles of Ownership Reform Act of 1989 *4 paved way for the privatisation of the dwellings created during the Soviet period. In 1993, the Privatisation of Dwellings Act *5 , was adopted, and pursuant to its § 3, the object of the privatisation was an apartment together with the other relevant part of the dwelling. Here we must say that the reforms went ahead of the development of private law. Civil law did not recognise an apartment that is a physical share of a dwelling as a property law object. Section 14 of the Law of Property Act *6 (LPA), which entered into force on 1 December 1993, provided that a thing could be in commerce as a whole, as a physical share or as a legal share; yet it did not create an institute of an apartment ownership. The reason is that the LPA was based on the draft Civil Code completed by 1940 *7 , which did not recognise the physical share of a dwelling. However, during the privatisation of dwellings, hundreds of thousands of objects similar to apartment ownership entered commerce, whereas dwellings were privatised as separate from the plot underneath then, while later on, the plot was transferred to the owners of the apartments usually free of charge and the apartment ownerships were entered in the register (establishment of apartment ownerships).
The Apartment Ownership Act *8 , based on WEG entered into force on 23 March 1994. Section 1 of the AOA defined apartment ownership as the ownership of an apartment which was a physical share of a structure, and of a legal share corresponding to the size of the physical share of both the plot of land and the essential part of the structure which was not a physical share of any apartment ownership. Such an apartment ownership was regarded as immovable by law, and was subjected to the immovable property provisions of the LPA. Although the AOA was an independent Act, it could be seen as an inseparable but non-codified part of the law of property system.
AOA I did not include provisions governing the maintenance of blocks of flats because of the legal policy decision that the blocks of flats would be maintained through apartment associations as independent legal persons. Administration under a contract of partnership was preserved as an alternative. At the same time, the legislative proceeding of the Apartment Associations Act *9 (AAA) was in progress in the Riigikogu and the Act entered into force on 3 August 1995. It became clear over time that the establishment of apartment associations was not going as planned and a need arose for alternative forms of administration. The situation has been described in the explanatory memorandum to the draft AOA of 2001 *10 , according to which the need for administering blocks of flats does not depend on whether a separate legal person has been formed, while the duties of an apartment association and its members also remain ambiguous.
Since an apartment ownership creates specific obligations and needs arising from the relevant area, which are independent of the existence of legal persons or entry into contracts, to resolve the problematic situation, it would be necessary to establish provisions that determine the legal relationship developed on the basis of law. In the case of a community of apartment owners, it would be a relationship under the law of obligations set out in the Apartment Ownership Act and specified by the Law of Property Act, General Part of the Civil Code Act, the Law of Obligations Act after it enters into force, as well as other Acts [author’s emphasis – P.P.].
However, a community was still regarded in LPA § 70 (7) (shared ownership), published in 1999, which precludes the application of provisions of a partnership. Namely, the provision sets out that if a right belongs to several persons (community), the provisions concerning joint ownership are applied thereto unless otherwise provided by law. This section appeared in the draft Law of Property Act, Law of Property Act Implementation Act, Land Register Act and Code of Enforcement Procedure Amendment Act *23 on the initiative of its initiator (Ministry of Justice) before the adoption of the draft, which is why the explanatory memorandum to the draft does not contain the reasons of the amendment. Hence, the general notion of a community has been defined via the law of property or application of the provisions regarding (joint) ownership. If a thing belongs to several persons, it is presumed that a common ownership exists; if a right belongs to several persons, we can presume that the right belongs to the persons in legal shares and we proceed from the rules of common ownership when exercising the rights and obligations relating to legal shares. *24 According to the explanatory memorandum to AOA, the joint exercise of rights must be regarded as a law of obligations, not a property law relationship. It is also evident from the second chapter of the AOA that besides the provisions of common ownership special provisions arising from the AOA or agreements of apartment owners (so-called right to exercise will) must be applied. *25 Because of the detailed nature of the AOA, it is applied above all and the LPA only applies to individual areas for which there are no special provisions in the AOA. Thus, for example, based on LOA § 79 (2), any agreements between co-owners concerning the procedure for use of a shared thing are entered in the land register.
When defining the community of apartment owners, regard must be given besides the law of obligations to the relationships of the institute with company law since directing bodies are connected with the administration of apartment associations, which serves as a feature of associations and not of joint ownership. *27 As a community has arrived in Estonian law via the impact of German law, I will present a comparative overview of defining a community of apartment owners.
Hence, the apartment ownership by nature belongs to the mixed legal type consisting of law of property and law of obligations elements. None of the elements stand out among others. Because of the uniformity of the elements, the rights arising from the membership of the community also transfer to the transferee upon the transfer of the apartment ownership. An apartment ownership is a unique legal institute, an original ownership that can be furnished with a content because the content of the apartment ownership could be developed by the agreement of apartment owners to the extent not prohibited by law (typus sui generis).AOA § 8 (2–4) generally allow for free development of the membership rights serving as the content of apartment ownership. This applies to a special legal successor insofar as the agreements differing from law have been entered in the land register.
A particular association of people is created upon the establishment of apartment ownerships. The membership of the association, above all, relates to law of property. A share in the common ownership is an integral part of special ownership, while there is also an indirect link between a share in common ownership and a share held by each member of the community in the assets of the community. AOA § 1 (2) defines the object of common ownership so that a plot of land and such parts of a structure which are not in sole ownership are in the common ownership of apartment owners. This gives rise to the question in Estonian legal order about the ownership of the assets accumulated collectively. The assets of a community are made up of the acts of apartment owners that they are obliged to perform in line with the size of their share in the common ownership, but it also encompasses obligations, movable property required for administration, receivables from other apartment owners and third parties, as well as the fruit from shared ownership, etc. The assets of a community do not belong to the common ownership related to special ownership but it belongs to the community — the membership of the community entails the right to receive part of these assets. In essence, each apartment owner holds an independent legal share of the assets of the community, yet it cannot be disposed of independently or pledged without the apartment ownership. The claims of the community do not constitute a common obligation relationship in which case all the apartment owners could demand its satisfaction. *33 A claim must be satisfied to the community as such.
AOA §§ 1 and 8 do not contain an immediate reference to the provisions of common ownership, yet § 1 sets out that the provisions of the Law of Property Act concerning immovable property ownership apply to apartment ownership in issues not regulated by the Act (which precludes the application of the provisions of the LOA concerning a partnership). The German theory criticises the application of the BGB (§ 741) provisions on community as the provisions of the law of obligations to an apartment ownership because in reality their application is of little significance. Because of the directing bodies, Brehm finds that a community of apartment owners is organised in the same way as a legal person. *34 Some authors regard a community related to the apartment ownership rather as a partnership in which undivided joint property is created for the participants. *35 The use of a partnership would be difficult because the owners need not be bound by personal trust and confidence. The difference between a partnership and a community is that a partner cannot dispose of a legal share of the partnership property *36 , whereas such a right of disposal is held by the members of a community (disposal still requires an apartment ownership). A community of apartment owners is a community of rights that have legal shares, which means that the size of the share each member has in the community is predetermined. While a partnership is usually created based on an agreement, a community is established by law.
All in all, a community of apartment owners formed pursuant to Estonian law is a community typus sui generis, the existence of which requires the following preconditions: an apartment ownership cannot exist without a community; a community is created based on law; a community functions through the Apartment Ownership Act or the expression of will permitted by law; only apartment owners can be members of a community (obligatory membership); unlike in the case of common ownership, an apartment owner cannot terminate a community (AOA § 9), neither can the apartment owner transfer or pledge it as parts separate from the apartment ownership. Here we must also point out the organisational structure of a community (the existence of a general meeting, house council, administrator, AOA §§ 17, 20 and 23). *37 If all the apartment ownerships belong to the same person, he or she cannot serve as a community of a single individual.
The existence of independent liability, as well as the ability to take on rights and obligations, is decisive in the case of a community of apartment owners. The prevailing approach in German legal theory had not recognised the passive legal capacity of a community of apartment owners until 2005. However, attempts were made in relation to a community of apartment owners to find similarities with other communities of persons who did not have passive legal capacity, above all, with partnerships. *38 Estonian law also recognises associations of persons that are not legal persons to which provisions of civil law partnerships are applied (NAA § 2 (2)). K. Saare has been of the opinion that because of the organisation, identity and liability assets of a partnership, the recognition of the passive legal capacity of a partnership would be justified for practical reasons. *39 The same practical reasons apply to a community of apartment owners. If an administrator enters into an agreement for purchasing a service, the administrator would do it in the name of the community, not apartment owners, i.e., the party to the agreement is the community.
WEG § 10 (8) adds provisions concerning the liability of apartment owners to a community of apartment owners. Each apartment owner is liable to the creditor for the performance of the obligations of the community in proportion to his or her share in the common ownership, if the obligations have arisen or become recoverable during the period when the apartment owner was a member of the community. It is limited partial liability. *46 An apartment owner is liable to the community for the performance of his or her obligations based on the legal share of common ownership. It is not, however, additional liability, but a creditor is able to file a claim directly against the owner. *47 WEG § 11 allows for declaring a bankruptcy regarding the assets of the community, which in itself does not entail the termination of the community. *48 It is possible to apply § 93 of the German Bankruptcy Act, according to which a trustee in bankruptcy may make a claim for payment against the members of the community.
In addition, the rights and obligations of an administrator of an apartment ownership to the community have been specified in WEG § 27. An administrator is regarded as a directing and representative body of a community that has passive legal capacity. If there is no administrator, apartment owners represent the community jointly, unless the right of representation has been transferred to one or several apartment owners by a resolution of the apartment owners.
Consequently, an apartment association and a community of apartment owners have a number of similarities in the Estonian legal order, while the greatest difference is that the association has a passive legal capacity and assets. Pursuant to AOA § 8 (1), the provisions of the AOA apply also to administration of the object of common ownership when an apartment association has been formed in so far as this is not in conflict with the AAA. Difficulties in interpreting the nature of the apartment association result from a legal maze, in which the NAA and AOA must be applied to the activities of the association besides AAA. It is incomprehensible why the actual solutions of the administration of blocks of flats must be different in a community and association. This gives rise to the need to harmonise the provisions of the AAA and AOA or once the judicial practice recognises the passive legal capacity of a community of apartment owners, there would be no need for an apartment association as a legal person.
The Concept of the Reform of the Apartment Ownership Act and Apartment Associations Act *57 , which offers unique solutions considering the regulations adopted in Europe in setting out the passive legal capacity of the community, prepared in the Ministry of Justice, seeks solutions for the problems described in the previous sections.
3) an association that is a legal person will be the only form of administration.
Version 1 involves a contradiction that the unjustified dualism will preserve, three different Acts (AOA, AAA, NAA) are applied, it is difficult to understand a community in legal proceedings. The advantages of maintaining the present system would be the continuing legal peace, i.e., nobody is compelled to change the form of administration and different forms allow for flexible consideration of the needs of blocks of flats of various sizes.
Version 2 is contradicted by the fact that the present communities should be liquidated and this would not be met with approval in legal proceedings; the advantage would be that the administration of blocks of flats would be organised on the same bases with the system prevailing in Continental Europe, which would match up better with our civil law.
Version 3 would have the advantage of preserving the present apartment associations that have been adopted more readily than the communities of individuals that are not legal persons. A status of a legal person has been analogously granted to a general partnership in our legal order (§ 79 of the Commercial Code). *58 Such an association would serve as a compulsory association or a legal person typus sui generis. The disadvantages are that a legal person would also be created where it would not be necessary (small houses), while additional (financial) obligations (such as independent accounting) ensue from a legal person. If in a community an apartment owner serves as a client through a general meeting and the administrator engages in administration, then in an association a greater liability and a more active role in administering the house is expected from apartment owners, for which they need not be prepared. Administration through a compulsory legal person would set a precedent in Europe, which is why its relations with the rest of civil law must be carefully considered.
The legislator, in essence, has two solutions: to recognise the limited passive legal capacity of a community of apartment owners and dissolve apartment associations or to create by law a situation in which it is compulsory to form an apartment association upon the establishment of apartment ownerships or to provide that an apartment association as a legal person is created automatically, so it will not be necessary to regulate the passive legal capacity of a community as a personal society. Since there are approximately 9000 apartment associations in Estonia, according to the information system of the commercial register, their liquidation would be an extremist choice with regard to legal traditions. It would be easier to regard communities as legal persons created on the basis of law (apartment associations) based on the examples set by the Netherlands and Austria.
The completed concept prefers version 3 and it should be accepted regardless of its flaws. *59 First of all, it is necessary to determine how such a legal person would be created. Section 26 of the GPCCA presumes the creation of passive legal capacity through making an entry in a register (without specifying the register). According to the present regulation, an apartment association is created by making an entry in the register of non-profit associations. *60 An alternative would be to enter an apartment association in the land register — it would be necessary to establish a general part or a separate box in the register part of apartment ownership (the administrators of state assets are entered in the land register in the same way). The general part would contain the general data on the registered immovable and there would be no need to repeat them in individual register parts. A disadvantage of the alternative is that it would require considerable reorganisation of the land register law and the register itself, also giving rise to the question whether the existing associations should be reregistered.
It would be less painful to continue with a system in which the present associations and future obligatory associations would be entered in the register of non-profit associations, which would, above all, eliminate the need for reregistering the associations. There is still a disadvantage that both the land register and the register of non-profit associations would have to be examined in legal proceedings; however, the problem can be solved by provision of online access. If an association remains the only form of administration, it is an obligatory association; hence, such an association must be created along with opening the register parts of apartment ownerships. The concept suggests that the registrar open a registry card for an association and the register of non-profit associations tackle the legal issues from that point onwards. *61 Such a procedure is acceptable because it is necessary to contact the register of associations to identify the right of representation of an owner who is a legal person in real property transactions today. The title page of the land register should still show the name and registry code of the association.
Basic data are required when the foundation of an apartment association is registered by an assistant judge opening the register parts of apartment ownerships. This gives rise to the question whether a memorandum of association and the articles of association are necessary. It would be logical if the memorandum of association is contained in the application to divide an immovable into apartment ownerships and no separate memorandum of association is entered into. *65 AAA § 3 (1) provides today that a memorandum of association is not entered into upon the foundation of an apartment association. A legal person in private law has articles of association or a partnership agreement according to GPCCA § 28. A present-day apartment association is required to have articles of association as well. The concept does not presume that an apartment association has articles of association at all times, especially in the case of smaller associations in which the regulation of the Act is sufficient. *66 When proceeding from § 15 (6) of the applicable AOA, it is expected that apartment owners establish internal rules that are by nature analogous to the articles of association. In an obligatory association, it should be taken as the basis that an association has articles of association that substitute for the internal rules and all the amendments to the articles of association (internal rules) can be seen from the register. This would eliminate the need to enter any agreements derogating from law as specified in AOA § 8 (2) in the land register. It has to be decided whether an agreement on the procedure for the possession and use of the shared ownership (plot, basement, etc.) of blocks of flats could be governed by the articles of association or whether it should be entered in the land register as an issue regarding the law of property. The concept suggests that such issues be regulated by the articles of association *67 , but in such a case, it is difficult to ensure the protection of the rights of third parties (an amendment to the procedure for use of common ownership, for example, relates to the interests of a mortgagee and the ranking of the entry concerning procedure for use is important in an execution proceeding).
The objective of the new regulation must be to harmonise the mechanism of making decisions. AOA § 12 presumes that the resolutions of apartment owners are reached by consensus and only issues regarding normal use are decided by majority vote. Such a provision differs both from LPA § 72 (1), according to which co-owners may decide on the possession and use of a thing by a decision of the majority and an apartment association in which issues regarding administration can be adopted by majority vote. The provisions must ensure that the present situation, in which the same persons start a general meeting to decide on law of property issues after a general meeting of an apartment association has ended, is discontinued. A distinction must be made regarding which decisions can be reached by consensus and which by majority vote. The number of the votes of apartment owners must also be harmonised. According to AAA § 11, each apartment owner has one vote, i.e., each apartment ownership gives one vote. AOA § 19 gives an apartment owner one vote regardless of the number of apartment ownerships in order to avoid excessive influence of one person. In the case of common ownership, LPA § 72 proceeds from the size of the ownership. It seems more appropriate to retain the solution contained in the AAA, in which one apartment ownership gives one vote at a general meeting.
When introducing an obligatory apartment association, the present triple administration form — general meeting (AOA § 17), administrator (AOA § 20), house council (AOA § 23) — in which the administrator is a representative body of the community acting under an authorisation agreement must be abandoned. In an association, a management board serves as a representative body, which presumes that there are enough apartment owners capable of administration in the house but the members of the management board may also come from outside the circle of owners. Lack of apartment owners competent in housing may prove a problem, which is the reason why the administration service is partly outsourced, as evident in the present associations. The concept suggests that a management board need not be elected in smaller associations and apartment owners jointly have a right of representation. *68 Assuming that there may not be people with sufficient experience and time resources in the apartment association to organise everyday administration, it should be considered to retain the administrator (as the administrative body of a community) and regulate the internal relations between the administrator (as a procurator) and the association (management board).
The applicable law does not rule out the insolvency of an apartment association and the commencement of bankruptcy proceedings, while apartment owners are liable to the association and not to the creditors of the association. Apartment owners are liable in a community that does not have passive legal capacity. In an obligatory association, the membership is related to ownership, so it is essentially impossible to liquidate an association on the grounds of insolvency *69 , and the new regulation must provide for the supplementary liability of apartment owners also upon the formation of a legal person.
The law of property content of the institute of apartment ownership in Estonia has been developed similarly to the German WEG, in which an apartment ownership consists of a physical share and a legal share of a common ownership in the registered immovable which is an integral part thereof. The legal relationships created between apartment owners need to be reformed in order to eliminate ambiguity regarding the extent of the liability of the apartment owners and different legal treatment in dwellings for the administration of which an apartment association has been established and in dwellings where there is no apartment association. A community of apartment owners established on the basis of the AOA has the following characteristics: an apartment ownership cannot exist without a community developing on the basis of law; the community functions through the rules of the APA or the expression of will of the apartment owners as permitted by law; only apartment owners can be members of the community of apartment owners (obligatory membership).A community of apartment owners is described by the organisational structure of the community or the existence of directing bodies (general meeting, house council, administrator). An important feature distinguishing between a community of apartment owners and common ownership (as well as partnership) is the fact that nobody can demand the termination of the community. Due to certain similarity, the application of provisions concerning a partnership to a community could be considered since the explanatory memorandum to the AOA regards a community as based on a law of obligations relationship. NAA § 2 also implies the possibility of applying the provisions concerning a partnership, by prescribing the application of partnership provisions to a non-profit association of persons that is not a legal person. At the same time, the AOA refers to the application of provisions concerning immovable property ownership and hence the provisions of common ownership. Most of the time, the provisions of common ownership are not applicable since the AOA contains enough special provisions. A community of apartment owners does not, in fact, coincide with any association of persons, so according to the Estonian law it is a community typus sui generis.Such a new type of personal association has not been discussed in legal theory and judicial practice, which is why the issues of the passive legal capacity and independent assets of a community have not been settled. The topic is important in the context in which an apartment association has such passive legal capacity and independent assets, while administration has been organised differently.
When examining the amendments made to the WEG in 2007, as well as the civil laws of the Netherlands, Switzerland, Austria and France, a legal personality has been granted to a community to meet the needs of legal proceedings. Legal personality is characteristic of individuals. According to German law, a community is a subject that has passive legal capacity created by law, which does not need to be entered in the register to be created. Granting passive legal capacity created under law to a community of apartment owners also in Estonia gives rise to the question why distinguish between a community and association as two forms of administration that have similar objectives. When recognising the passive legal capacity of a community by law, starting from the establishment of apartment ownerships and delimiting the liability of the members of a community for the obligations of a community, there is no need for the foundation of an apartment association as a separate legal person. It has to be admitted that the implementation of such a change would be difficult because of the large number of apartment associations, which is why it would be reasonable to regard the passive legal capacity of an apartment association as created by the formation of apartment ownerships by law, while the registrar of the land register ex officio makes relevant entries in the non-profit associations register.
*1 Apartment ownerships are economically significant in Estonia as out of the 896,000 registered immovables entered in the land register, 461,000 are apartment ownerships (51%). Hence, the percentage of apartments in private ownership is considerably higher than in the Federal Republic of Germany, where the number of apartment ownerships is estimated to be five million. See S. Hügel, O. Elzer. Das neue WEG-Recht. München 2007, p. 1.
*2 Korteriomandiseadus. – RT I 2000, 92, 601; 2006, 43, 326 (in Estonian).
*3 Gesetz über das Wochnungseigentum und das Dauerwohnrecht. – BGBl. I pp. 175, 209.
*4 Omandireformi aluste seadus. – RT 1991, 21, 257; 2006, 25, 184 (in Estonian).
*5 Eluruumide erastamise seadus. – RT I 1993, 23, 411; 2006, 26, 191 (in Estonian).
*6 Asjaõigusseadus. – RT I 1993, 39, 590; 2008, 59, 330 (in Estonian).
*7 A. Traat. Tsiviilseadustik (Civil Code). Tartu 1992 (in Estonian).
*8 Korteriomandiseadus. – RT I 1994, 28, 426 (in Estonian).
*9 Korteriühistuseadus. – RT I 1996, 42, 811; 2006, 61 456 (in Estonian).
*11 Kinnistusraamatuseadus. – RT I 1994, 94, 1609; 2008, 59, 330 (in Estonian).
*12 AOA § 8 (1).
*13 Korteriomandiseaduse ja korteriühistuseaduse reformi kontseptsioon (Concept of the Apartment Ownership Act and Reform of the Apartment Associations Act). Justiitsministeerium. Tallinn 2008 (in Estonian).
*15 Tsiviilseadustiku üldosa seadus. – RT I 2002, 35, 216; 2008, 59, 330 (in Estonian).
*16 Võlaõigusseadus. – RT I 2001, 81, 487; 2008, 59, 330 (in Estonian).
*18 Kaupo Paal has regarded aspects related to a community of apartment owners in his article “Võlaõigusseaduse mõju valitseja nimetamisele ja õigussuhtele korteriomanikega” (Impact of the Law of Obligations Act on Appointment of Administrator and Legal Relationships with Apartment Owners) (Juridica 2003/5) (in Estonian) and the passive legal capacity of a community of subjects who are not legal persons has been discussed in the doctoral thesis of Kalev Saar “Eraõigusliku juriidilise isiku õigussubjektsuse piiritlemine” (Delimitation of the Subject of Law Status of a Legal Person Governed by Private Law), published by TÜ Kirjastus under the same title in 2004 (in Estonian).
*19 BGBl. I 42 p. 2909; 2003 I p. 738.
*21 Mittetulundusühingute seadus. – RT I 1996, 42, 811; 2008, 59, 330 (in Estonian).
*22 A community must be regarded as a community of persons, just as spouses; in both cases, a community owns property in undivided parts (joint ownership). See K. Saare. Eraõigusliku juriidilise isiku õigussubjektsuse piiritlemine (Delimitation of the Subject of Law Status of a Legal Person Governed by Private Law). Tartu 2004, p. 78 (in Estonian).
*23 Asjaõigusseaduse, asjaõigusseaduse rakendamise seaduse, kinnistusraamatuseaduse ja täitemenetluse seadustiku muutmise seadus. – RT I 1999, 27, 380 (in Estonian).
*24 Pursuant to § 147 of the Law of Succession Act that entered into force on 1.01.2009, if several successors have accepted the succession (co-successors), the estate is owned by the successors jointly (community of the estate), to which the provisions of common ownership apply. A co-successor may not dispose independently of the items that belong to the estate, but may dispose of the legal share in the community of the estate. – RT I 2008, 7, 52 (in Estonian).
*25 AOA § 8 (2)–(4).
*26 Palandt. Bürgerliches Gesetzbuch. Kommentar. 67. Aufl. München 2008, § 741, p. 1102.
*27 In German legal theory, the theory of association of apartment ownerships has remained isolated so far, yet there are several overlaps between the possibility of establishing an apartment association based on the AOA and the German theory of associations. K. Paal. Korteriomandiseaduse väljatöötamise alustest (On the Foundations of Preparing the Apartment Ownership Act). – Juridica 2001/4, p. 274 (in Estonian).
*28 A. Brehm. Sachenrecht. Mohr Siebek Verlag 2006, p. 380.
*29 Wesenberg admits that an apartment ownership as an ownership defined in the Apartment Ownership Act is a special ownership in two ways — it includes special ownership and serves itself as special ownership. See A. Brehm (Note 28), p. 12.
*30 J. Bährmann. Wohnungseigentum. München 1991, p. 9.
*31 In comparison, according to judgment No. 3-2-1-164-05 of the Supreme Court of Estonia of 11.04.2006, in the case of an apartment ownership created as a result of privatisation, it is the special ownership (apartment) that is in the foreground, so an apartment serving as the separate property of spouses does not become the joint property of spouses even if an apartment ownership is established, if this happens during the marriage.
*32 E. Pick. Wochnungsigentumsgesetz. München 2007, p. 39.
*33 I. Kull, M. Käerdi, V. Kõve. Võlaõigus I. Üldosa (Law of Obligations I. General Part). Tallinn 2004, p. 419 (in Estonian).
*34 A. Brehm (Note 28), p. 380.
*35 M. Lutter. Theorie der Mitgliedschaft. AcP 1980, Volume 180, paragraph 146; J. Bährmann (Note 30), p. 114. Yet such associations constitute communities oriented to a particular goal (Zweckgemeinschaft), while in the case of apartment owners a community is rather oriented to exercising common interests (Interessengemeinschaft).
*36 P. Varul, I. Kull, V. Kõve, M. Käerdi. Võlaõigusseadus II. Kommenteeritud väljaanne (Law of Obligations Act II. Commented edition). Tallinn 2007, p. 671 (in Estonian).
*37 Unlike in the partnership and common ownership. The bodies of a community of apartment owners can also be external bodies in the form of an administrator appointed from outside. S. Renner. Die Wohnungseigentümergemeinschaft im Rechtsverkehr. Berlin 2005, p. 41.
*38 A decision of BGH dated 29.01.2001 was decisive, defining a partnership as having passive legal capacity and procedural capacity. – ZIP 2001, p. 330.
*39 K. Saare. Seltsing – kas leping või ühing? (Partnership — Agreement or Association?) – Juridica 2003/1, p. 64 (in Estonian).
*40 In the judgment of Supreme Court in civil matter No. 3-2-1-105-05, 2.11.2005 (RT III 2005, 38, 371), the Court has established that the debts not paid by the former owner do not transfer to the new owner unless separately agreed upon. The judgment also assumes a position that the obligations created from the moment of becoming the owner must be borne by the new owner in relations with the other co-owners. Each co-owner is liable for the performance of the obligations that have become recoverable during the period when he or she has been a co-owner.
*41 BGBl. I p. 2866.
*42 In 2005, the Supreme Court of the Federal Republic of Germany (BGH) recognised the partial passive legal capacity of a community of apartment owners insofar as it participated in the administration of shared ownership in legal proceedings. According to that, a community of apartment owners may have rights and obligations, serve as a respondent and plaintiff and participate in an execution proceeding as a debtor and a creditor. Pursuant to the judgment concerned, a community of apartment owners cannot file claims against a member of the community and in this case apartment owners have the right of claim because such a claim does not involve ‘participation in commerce’; however, a community can file such claims against third parties.
*43 Apartment owners may file an action against a community and a community may file an action against apartment owners.
*44 L. Rühlicke. Gesamthand, rechtsfähige Personengesellschaft, juristische Person und Wohnungseigentümergemeinschaft. – Zeitschrift für Wohnungseigentumsrecht (ZWE) 2007 (8) 7, p. 266.
*45 J. Demharter. Grundbuchordnung. 26. Aufl. München 2007, p. 332.
*46 W. Boeckh. Wohnungseigentumsrecht. Baden-Baden 2007, p. 60.
*47 G. Jennissen. Wohnungseigentumsgesetz. Köln 2008, p. 166.
*48 E. Braun. Insolvenzordnung. 3. Aufl. München 2007, p. 118.
*49 The lack of passive legal capacity has been regarded as a negative factor in making investments in the housing sector. See R. Fritsch. Das neue Wohnungseigentumrecht. Baden-Baden 2007, p. 18.
*50 T. P. Ruetschi. Das schweizerische Stockwerkeigentum. Zürich 1980, pp. 31, 36.
*51 S. M. Wietek.Wohnungseigentum in Frankreich. Frankfurt 1976, p. 72.
*52 B. Schober. Rechte und Pflichten der Eigentümergemeinschaft. Wien 2004, pp. 23, 45.
*53 A. S. Westerdijk. Niederländisches Bürgerliches Gesetzbuch. Buch 5 Sachenrecht. München 1996, p. 291.
*55 According to judgment No. 3-2-1-111-04 of the Supreme Court dated 30.11.2004, an apartment association is, based on AAA § 2 (1), a representative of the interests of apartment owners; hence, an apartment association may enter into a subscription contract and a sales contract of heat with a network operator. If an apartment association enters into a sales contract of heat on behalf of itself, it is also liable to the network operator for the performance of the contract. Thus, the apartment association distributes heat between apartment owners and claims from the apartment owners their proportional part of the management expenditure according to the resolutions of the apartment association and its articles of association. – RT III 2004, 36, 373 (in Estonian).
*56 AAA § 9 (1). The Act does not specify whether the mortgage arises from law or the association has a right of claim for the establishment of the mortgage.
*58 Äriseadustik. – RT I 1995, 26–28, 355; 2009, 12, 71 (in Estonian).
*59 Concept (Note 13), p. 12.
*61 Concept (Note 13), p. 14.
*62 Tulundusühistuseadus. – RT I 2002, 3, 6 (in Estonian).
*63 Concept (Note 13), p. 16.
*64 Subsection 1 (2) of the Dwelling Associations Act (hooneühistuseadus). – RT I 2004, 53, 368 (in Estonian).
*65 Junkers in his theory of associations regards a community of apartment owners as an independent law of property society (dingliche Gesell­schaft), in which an agreement between apartment owners for the establishment of apartment ownerships also represents a partnership agreement. M. Junkers. Die Gesellschaft nach dem Wochnungseigentumsgesetz. München 1993, p. 281 ff.
*66 Concept (Note 13), p. 17.
*69 WEG § 11 (3) precludes commencement of bankruptcy proceedings against the assets of a community.
*70 Concept (Note 13), p. 34.
*71 WEG § 10 (8) also sets out the five-year solidary liability of the former owner.
*72 Concept (Note 13), p. 35.

References: § 3
 § 70
 § 79
sui generis
 § 8
 § 1
 § 1
sui generis
 § 9
 § 2
 § 10
 § 11
 § 93
 § 27
 § 8
sui generis
 § 3
 § 28
 § 15
 § 8
 § 12
 § 72
 § 11
 § 19
 § 72
 § 17
 § 20
 § 23
 § 2
sui generis
 § 8
 § 147
 § 8
 § 741
 V. 
 V. 
 § 2
 § 9
 § 11
 § 10