According to Article 38 of the Condominium Law, the manager is responsible to the condominium owners just like an agent, and according to Article 39 of the same law, he/she is obliged to account to the condominium owners.
The fact that the manager has been acquitted by the condominium owners’ assembly does not absolve him/her from responsibility for the damages caused to the condominium owners due to irregular expenditures and embezzlement during his/her term of office.
This point is emphasized in the Supreme Court decision below.
“Condominium Law
III – Responsibility:
1. General Rule:
Article 38 – The manager is responsible to the condominium owners just like an agent. (Added paragraph: 14/11/2007-5711/19 art.) Lawsuits regarding the annulment of decisions of the condominium owners’ assembly, block representatives’ assembly, or collective building representatives’ assembly may be filed against the manager representing the condominium owners, or, in collective buildings, against the manager elected by the block representatives’ assembly or the collective building representatives’ assembly. The manager shall notify all condominium owners and the block or collective building representatives’ assembly of the lawsuit filed. In case of annulment of the assembly’s decision, the litigation costs shall be covered from common expenses.
Accountability:
Article 39 – The manager is obliged to submit an account of the income obtained and expenses incurred up to that date to the condominium owners’ assembly at the times specified in the management plan, or if no such time is specified, within the first month of each calendar year. Half of the condominium owners If desired, the manager may be asked to show the accounts outside the times specified in the management plan, regardless of the land shares of these properties.”
18th Civil Chamber, 2015/10204 E., 2016/10114 K.
“Case Law Text”
COURT: Civil Court of Peace
In the lawsuit petition, the annulment of the decisions of the general assembly of apartment owners dated 07.01.2012 was requested. The court decided to partially accept the lawsuit, and the judgment was appealed by the defendant’s attorney.
SUPREME COURT DECISION
After it was determined that the appeal request was within the time limit, all the documents in the file were read and considered:
The plaintiff’s attorney requested the annulment of the decisions taken at the ordinary meeting of apartment owners held on 07.01.2012; The court-ordered expert examination revealed no irregularities in the meeting notices, quorum requirements, discussion of agenda items, voting, objections regarding participation by proxy, and attendance fees received, in violation of the management plan and the law. However, an examination conducted by a financial consultant expert for the discharge of the management and supervisory board revealed that: the business ledger showing income and expenses for 2010 was missing with a notarized record; while a notarized business ledger existed for 2011, the income pages were damaged, disorganized, and some were blank, making it impossible to determine the income for 2011; and as of December 31, 2011, the cash balance that should have been transferred to the new management was shown as 866.81 TL short, leaving this amount on the shoulders of the discharged former management. Therefore, the court ruled in favor of the plaintiff on this ground and annulled the decision regarding the discharge of the management and supervisory board.
(Note: The final judgment is a separate decision and not part of the court’s decision.) According to Article 38 of the Condominium Law, the manager is responsible to the condominium owners just like an agent, and according to Article 39 of the same law, he/she is obliged to account to the condominium owners. The fact that the manager has been discharged from liability by the condominium owners’ assembly does not absolve him/her from responsibility for damages caused to the condominium owners due to irregular expenditures and embezzlement during his/her term. Therefore, if a matter requiring the manager’s liability arises, an expert report should be obtained on the subject of a lawsuit that may be filed by the condominium owners or the new management. The decision to annul the manager’s discharge based on the grounds that the management embezzled funds, ignoring the above explanations and rendering it legally meaningless, is deemed incorrect. Therefore, establishing a written judgment without considering the principles explained above is incorrect, and the appeals are justified for these reasons. Accordingly, the judgment is REVERSED pursuant to Article 428 of the Code of Civil Procedure, the appeal fee shall be refunded to the appellant upon request, and the right to request a correction of the decision is open within fifteen days from the date of notification of this decision. This decision was made unanimously on June 27, 2016.