How can a management organization terminate a house management contract?

Owners of premises in apartment buildings have the right to terminate contractual relations with the management organization at any time. At the same time, the courts recognize the management agreement as public and believe that the management organization cannot unilaterally refuse it. Find out how a management company can legally terminate an apartment management agreement.

How to protect the management agreement of an apartment building from challenge
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Who can terminate the management contract

According to Part 3 of Art. 161 of the Housing Code of the Russian Federation, the owners of premises can determine or change the method of managing apartment buildings at a general meeting. They have the right to terminate the management agreement unilaterally at any time. This is recorded in the resolution of the Presidium of the Supreme Arbitration Court dated November 22, 2011 No. 7677/2011.

Management organizations are deprived of this right: according to the Resolution of the Presidium of the Supreme Arbitration Court dated July 15, 2010 No. 1027/10, the management agreement concluded between the management company and the owners of premises in the apartment building is recognized as public. Consequently, the management company cannot refuse to provide services under the contract if it is possible to fulfill them (determination of the Constitutional Court of the Russian Federation dated 06.06.2002 No. 115-O).

However, according to the director of the NP SRO UN “KIT”, member of the Expert Council of the Energy Committee of the State Duma of the Russian Federation, Elena Shereshovets, there are two legal ways for management organizations to break contractual relations with residents of apartment buildings:

1. Bring the issue to the general meeting of owners of premises in the apartment building.
2. Terminate the contract unilaterally after its expiration.

Let's look at each of the listed methods.

Collection of evidence of management's dishonesty

In order for residents to abandon the management company, activists must present evidence of its dishonest actions to the general meeting.

When selecting a management company, an MKD council is simultaneously created. The chairman of the council is obliged not only to control the quality of services provided, but also to sign acceptance certificates for the work done, request estimates, documents on payment for construction materials. It is the chairman who has the right to send appeals to local government bodies to check the activities and eliminate violations on the part of the management company.

For this purpose they gather:

• statements and complaints from citizens against the management organization;
• the results of inspections on them, documented in acts;
• instructions from housing inspections;
• conclusions of supervisory authorities;
• results of prosecutorial checks, etc.

The collected materials may reflect facts of administrative liability being brought against employees of the management institution for identified shortcomings and violations.

To understand whether a house can refuse a service company, you need to know the requirements for the quality of housing and communal services. They are set out in Appendix No. 1 of the Decree of the Government of the Russian Federation “On the provision of utility services to owners and users of residential premises in apartment buildings” (No. 354 of 05/06/2011).

Method 1: bring the issue to the general meeting of owners

There may be many reasons why a management organization seeks to terminate a management agreement with an apartment building. Among them are the increase in residents’ debt for housing and communal services and the difficulty of collecting it, the breakdown of the house, and the refusal of owners to increase tariffs.

But regardless of the reason, the management authority can try to come to an agreement with the residents of the apartment complex and bring the issue of termination of the contract to the general meeting of owners (Part 3 of Article 161 of the Housing Code of the Russian Federation). When planning to “leave” an unreliable apartment building, the management organization must argue why the owners should change the company responsible for the maintenance and repair of the apartment complex’s common property.

Both the owner of premises in an apartment building and the management organization can initiate an OSS (Article 45 of the Housing Code of the Russian Federation). The decision is approved by a majority of the total number of votes taking part in the meeting (Part 1 of Article 46 of the RF Housing Code). At the same time, residents of apartment buildings must decide who will manage their home: change the management method or choose another management organization.

Claim procedure for resolving disputes in a management agreement
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And who should manage the HOA, a group or an individual citizen, or part-time?

Owners of premises in an apartment building, on the basis of a decision of the general meeting of owners of premises in an apartment building, unilaterally have the right to refuse to fulfill the management agreement for an apartment building if the management organization does not comply with the terms of such agreement, and decide to select another management organization or change the method of managing this home.

That is, a decision is needed from the general meeting of MKD owners.

In Art. 45 of the RF Housing Code indicates how this is done.

1. Owners of premises in an apartment building are required to annually hold an annual general meeting of owners of premises in an apartment building. Unless otherwise established by the general meeting of owners of premises in an apartment building, the annual general meeting of owners of premises in an apartment building is held during the second quarter of the year following the reporting year, in the manner established by this article.

(as amended by Federal Law dated June 29, 2015 N 176-FZ)

2. General meetings of owners of premises in an apartment building held in addition to the annual general meeting are extraordinary. An extraordinary general meeting of owners of premises in an apartment building may be convened at the initiative of any of these owners.

3. The general meeting of owners of premises in an apartment building is valid (has a quorum) if the owners of premises in this building or their representatives with more than fifty percent of the votes of the total number of votes took part in it. If there is no quorum for holding an annual general meeting of owners of premises in an apartment building, a repeat general meeting of owners of premises in an apartment building must be held.

4. The owner, another person specified in this Code, on whose initiative a general meeting of owners of premises in an apartment building is convened, is obliged to inform the owners of premises in this building about the holding of such a meeting no later than ten days before the date of its holding. Within the specified period, a message about holding a general meeting of owners of premises in an apartment building must be sent to each owner of the premises in this building by registered mail, unless the decision of the general meeting of owners of premises in this building provides for another way of sending this message in writing, or delivered to each owner of the premises in this house under signature or placed in the premises of this house, determined by such a decision and accessible to all owners of premises in this house.

(as amended by Federal Laws dated June 29, 2015 N 176-FZ, dated July 29, 2017 N 257-FZ)

5. The notice of holding a general meeting of owners of premises in an apartment building must indicate:

1) information about the person on whose initiative this meeting is convened;

2) the form of holding this meeting (in-person, absentee or absentee voting);

(Clause 2 as amended by Federal Law dated June 29, 2015 N 176-FZ)

3) the date, place, time of this meeting or, if this meeting is held in the form of absentee voting, the closing date for accepting decisions of owners on issues put to vote, and the place or address where such decisions should be transferred;

4) the agenda of this meeting;

5) the procedure for familiarizing yourself with the information and (or) materials that will be presented at this meeting, and the place or address where they can be viewed.

6. Owners who have at least ten percent of the votes of the total number of votes of the owners of premises in an apartment building have the right to apply in writing to the management organization or the board of a homeowners’ association, housing or housing-construction cooperative, or other specialized consumer cooperative to organize a general meetings of owners of premises in an apartment building. The application for holding a general meeting of owners of premises in an apartment building must formulate the issues to be included on the agenda of the meeting. At the request of the owners, the management organization, the board of a homeowners' association, housing or housing-construction cooperative, or other specialized consumer cooperative are obliged to carry out the activities necessary for holding a general meeting of owners of premises in an apartment building within forty-five days from the date of receipt of the application, but no later than than ten days before the date of the general meeting, notify each owner of the premises in this house about the holding of this general meeting in the prescribed manner, as well as draw up the necessary documents based on the results of this general meeting and ensure that they are brought to the attention of the owners of the premises in this house in the prescribed manner established by Part 3 of Article 46 of this Code.

(Part 6 introduced by Federal Law dated June 29, 2015 N 176-FZ)

7. A general meeting of owners of premises in an apartment building may be convened on the initiative of the management organization managing this apartment building under a management agreement. At the same time, the agenda of such a meeting may include issues referred by this Code to the competence of the general meeting of owners of premises in an apartment building.

(Part 7 introduced by Federal Law dated June 29, 2015 N 176-FZ)

The HOA is governed by a board.

Art. 147 of the RF Housing Code confirms this.

The management of the activities of the homeowners association is carried out by the BOARD of the association. The board of a homeowners' association has the right to make decisions on all issues of the partnership's activities, with the exception of issues falling within the exclusive competence of the general meeting of owners of premises in an apartment building and the competence of the general meeting of members of the homeowners' association.

Prepare the general meeting of MKD owners.

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Method 2: terminate the contract upon expiration

Established judicial practice shows that management organizations have the right to terminate a management agreement after its expiration in accordance with Art. 162 Housing Code of the Russian Federation.

This method of severing contractual relations with a problematic apartment building is confirmed by the decision of the Federal Arbitration Court of the Moscow District dated 03/07/2013 in case No. A41-9806/12. Although the outcome of the litigation was in favor of the owners, during the consideration of the case the court noted important aspects in the interpretation of certain articles of the RF Housing Code and the RF Civil Code on the termination of management contracts.

The owners of the apartment complex filed a lawsuit against the management company. They held an OSS, at which they decided to change the management method and create a HOA. The decision of the meeting was recorded in the minutes, the HOA was registered and the MA was notified. But the management company refused to transfer the technical documentation for the house to the HOA in accordance with Part 10 of Art. 162 Housing Code of the Russian Federation.

The regional arbitration court, which the residents of the apartment complex appealed to, rejected the claim. In the decision, the court noted that the OSS protocol does not contain a decision to terminate the contract with the management company, concluded before the change in management method. The Arbitration Court of Appeal supported the findings of the first instance and rejected the complaint of the residents of the apartment building.

The owners of premises in the apartment building appealed to the Federal Arbitration Court of the District, which did not agree with the opinion of the first two courts. The court noted that the residents of the apartment building recorded in the OSS protocol the fact of changing the method of managing the house and notified the management office of their decision. Thus, the contract with the management organization was terminated. The decision of the court of first instance and the decision of the arbitration court of appeal were canceled, and the owners' claim was satisfied.

How to terminate a management agreement unilaterally by the management company
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Prerequisites for changing house rulers

Breaking the contract with the management company is sometimes the only way out to save a multi-storey building from destruction in time. This is preceded by numerous violations by the manager of his direct duties prescribed in the contract for the maintenance of a residential property. According to the law, such an agreement is drawn up for a period of up to five years. The period is determined at a general meeting of the co-owners of the house.

To understand whether a house can refuse the services of a management company, you need to study the procedure for terminating the contract. And also understand whether there are specific claims against the operating company.

Grounds for filing claims and terminating a residential building management agreement:

• unsatisfactory quality of work on the maintenance of common building equipment and auxiliary premises;
• non-compliance with the quality of housing and communal services: water, heat and electricity;
• lack of scheduled repairs in an apartment building (for example, a leaking roof, loose railings);
• violation of deadlines for fulfilling requests from owners (the norms are prescribed in the resolution of the State Construction Committee of the Russian Federation dated September 27, 2003 No. 170);
• improper charging of payment (for example, for repairs that were not actually done);
• violation of deadlines for fulfilling requests from residents for the restoration of in-house utility networks;
• concealment of the results of the financial activities of the management company. In the event that the company does not report annually to the general meeting of co-owners of housing in the 1st quarter.

Before refusing the services of a management company, you need to take into account that in the above cases, legislative norms allow the termination of contractual relations with the management company with a single reservation. This can be implemented no earlier than 12 months after the formalization of the contractual relationship.

What the law and judicial practice say about changing the Criminal Code

The existing norm of the Civil Code of the Russian Federation, clause 1, art. 310 in Russia, a ban has been adopted on unilateral termination of contractual relations, unless otherwise provided by law. In housing legislation, such a right is spelled out in clause 8.2 of Article 162 of the Housing Code of the Russian Federation and is allowed in case of serious violations of the terms of the contract.

There are decisions in judicial practice, in particular No. 7677-11 of the Presidium of the Supreme Arbitration Court of the Russian Federation dated November 22, 2011, which states whether it is possible for a general meeting of residents to terminate an agreement with the management company unilaterally and without violating contractual provisions.

Correctly draw up a management agreement for apartment buildings

The decision of the Federal Arbitration Court was based on the interpretation of the following articles of the Housing and Civil Codes of the Russian Federation:

1. The management agreement concluded by the owner of the premises with the management company is terminated if there is an application from one of the parties for its termination (Part 6 of Article 162 of the Housing Code of the Russian Federation).
2. Unilateral refusal of the management agreement does not contradict Art. 782 of the Civil Code of the Russian Federation: both the customer and the contractor have the right to refuse to fulfill the contract for the provision of paid services.
3. By virtue of clause 3 of Article 450 of the Civil Code of the Russian Federation, in the event of a unilateral refusal of the contract, when such refusal is permitted by law, the contract is considered terminated.

The court decision shows that the MA has the right to terminate the management agreement after the end of its validity period without the consent of the OSS. If you conclude an agreement with the owners for a period of one year with the condition of extension, the management organization, if necessary, will be able to refuse to manage the house. The main thing is to specify in detail the refusal procedure in the contract: establish a template for notifying owners, methods and timing of its delivery, and other important points.

What documents will be required?

Refusal to cooperate with homeowners leads to a lot of paperwork. Here are the main acts that must be drawn up by the Criminal Code and sent to the owners and to various authorities:

1. Appeal to the owners. It must contain the grounds for a justified refusal, supported by legislative acts, as well as descriptions of the date when the authority to act of the management company ends.
2. An act of appeal to the housing inspectorate describing the grounds for termination of the contract with the owners.
3. Contacting the local administration with justification for breaking the contract with the owners.
4. Preparation of documentation on the last months of operation of the management company, which is provided to the owners.
5. Extracts on the status of personal accounts of an apartment building for transfer to the owners.
6. Report on the latest expenses of the management company.
7. Minutes of meetings, election of a management company, cooperation agreements with contractors for transfer to the owners.
8. Description of the state of common property at the time of termination of the contract for transfer to the owners.

Attention! If the residents of the apartment building do not have any questions or complaints about the state of the documents, and they also accept the refusal to cooperate without going to court, the contract can be considered terminated.

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.