Many co-owners hear about “vertical” versus so-called “horizontal” or “initial” co-ownerships and wonder about the difference between the two of them. In fact, the two are interrelated, and here’s how.
A method of developing a real-estate project in co-ownership
The terms vertical co-ownership and horizontal or initial co-ownership are used to describe the different levels of co-ownership when the real-estate promoter wishes to develop and build his project in phases, using the deeds method known as “concomitant.”
The land that the real-estate promoter wishes to develop into a housing project shall be the subject of the publication in the Land Registry of a notarized deed of co-ownership which divides the land in so-called “privative” portions, and so-called “common” portions. Amalgamated these portions form a divided co-ownership constituted in a syndicate of co-ownership.
This deed of initial or horizontal co-ownership will determine that the privative portions of that co-ownership are intended to receive the construction of a building on each one of them.
As regards the common portions of this co-ownership, these usually include portions of the co-ownership that will be used by all privative portions, for instance, one or more exterior parking lots, an underground garage, traffic lanes, or green spaces.
This initial deed shall provide that each one of the buildings to be built one day on the portions will be the subject of its own deed of co-ownership distinct from the others. These are “concomitant” deeds, often also called “vertical,” which will create a syndicate of co-ownership for each one of the buildings. These co-ownerships will be divided into privative portions (housing units) and common portions (all other portions of the building outside the boundaries of the privative portions, for instance, the foundations, roof, structural work, windows, entrance doors, etc…).
Vertical versus horizontal syndicates
The syndicate of co-ownership resulting from a vertical concomitant deed of co-ownership is a legal person whose objective is the conservation of the building, its maintenance and the administration of the common portions, the protection of the rights pertaining to the building or the co-ownership, as well as all the operations of common interest in its building. This syndicate has no jurisdiction over the other buildings of the real-estate project.
As for the horizontal syndicate, it has the same duties and responsibilities, and similar powers, but this time on the horizontal co-ownership.
All co-owners of condo units created in vertical co-ownerships are linked to the syndicate of the co-owners of their building, as well as to the horizontal co-ownership syndicate.
As regards the financial obligations of the co-owners, these are linked both to their vertical and to their horizontal syndicate. Each co-owner is therefore obliged to contribute to the common charges for the building in which he owns his condo, but indirectly also to the common charges for the exploitation of the horizontal co-ownership. The syndicate of co-ownership of his building must contribute its share of the common expenses of the horizontal syndicate, and it does that by including it in its annual budget. Indeed, by paying the expenses of his condo to his syndicate, the co-owner contributes to the common expenses of his building and those of the horizontal co-ownership.
The syndicate of horizontal co-ownership will have the same decision-making bodies as a vertical syndicate, that is to say a Board of Directors and an assembly of the co-owners.
In the case of a horizontal syndicate, certain deeds of co-ownership provide that an administrator of each one of the vertical syndicates will be appointed to sit on the Board of Directors of the horizontal syndicate, and sometimes even to act at the assembly of co-owners as the procured representative who can exercise the voting rights of all the co-owners of the vertical syndicate he represents. In such a structure it will only be those administrators- representatives who will be convened to the general assemblies of the horizontal syndicate, and not all the co-owners of the vertical syndicate, which will greatly facilitate the organization of the convocation and holding of a general meeting.
For any question on the subject, as well as in relation to the real-estate law in general, do not hesitate to contact our team of lawyers specializing in the subjectmatter.