The Supreme Court Established Clear Approaches to Disputes Regarding Condominium Associations: When to Appeal to Commercial or Civil Courts
The Supreme Court has established consistent approaches to resolving disputes related to the activities of condominium associations (OSBB). In particular, courts must consider not only the composition of the parties involved but primarily the nature of the legal relations. This issue was examined by the judge of the Grand Chamber of the Supreme Court, Olena Bilokon.
Jurisdiction of disputes involving OSBB and housing construction cooperatives (ZhBK)
The determination of jurisdiction in disputes involving OSBB is characterized by its dual legal nature: on the one hand, OSBB is a legal entity created to ensure the realization of co-owners' rights to manage an apartment building; on the other hand, OSBB’s activities are inseparably linked to the exercise by co-owners of their rights of joint ownership over common property. This necessitates distinguishing disputes arising in the sphere of the legal entity’s activities (creation, management, termination of OSBB) and those related to the exercise of co-owners' property rights (use of common property, housing rights, disputes over utility services, etc.). Therefore, the main criterion for determining jurisdiction is not the subject composition of the dispute but the nature of the disputed legal relations. The judge noted that relations concerning the procedure for creation, registration, reorganization, activities, and liquidation of OSBB, as well as the legality of decisions of the founding and general meetings, are considered under commercial procedural rules; disputes regarding the exercise of co-owners' rights, housing rights, or use of common property are considered by courts of civil jurisdiction.
Olena Bilokon thoroughly analyzed the Supreme Court Grand Chamber’s ruling dated October 2, 2019, in case No. 501/1571/16-c, which for the first time stated that disputes regarding OSBB management are corporate disputes. A co-owner applied to a civil court with a claim to invalidate the decision of the founding meeting on the creation of OSBB and to cancel the state registration of the legal entity. The case was long considered by courts of general jurisdiction (civil jurisdiction), but during cassation review, the question arose regarding compliance with the rules of subject-matter and personal jurisdiction in this category of disputes.
The Grand Chamber of the Supreme Court annulled the decisions of the civil courts and closed the proceedings, clarifying that disputes arising between co-owners of an apartment building and OSBB regarding the creation, activities, management, or termination of this legal entity are corporate disputes (disputes concerning the management of a legal entity). According to the provisions of the Commercial Procedural Code of Ukraine, such cases are subject to consideration exclusively under commercial procedural rules, regardless of whether the plaintiff is an individual.
In the Grand Chamber ruling dated February 1, 2022, in case No. 910/5179/20, a definitive guideline regarding jurisdiction was formed. The court stated that disputes between co-owners and OSBB concerning the challenge of meeting decisions on any issues are subject to consideration under commercial procedural rules (paragraph 3, part 1, article 20 of the Commercial Procedural Code of Ukraine).
These approaches are developing in modern judicial practice. The speaker drew attention to the ruling of the Cassation Civil Court within the Supreme Court dated February 25, 2026, in case No. 127/16932/24, which concluded that disputes regarding the termination of powers or dismissal of the OSBB board chairperson, as well as related claims (changing the wording of dismissal reasons, recovery of severance pay, unpaid amounts upon dismissal, etc.), are subject to consideration under commercial procedural rules, not civil. The judge also cited the Cassation Civil Court ruling dated March 2, 2023, in case No. 760/16852/21. The court stated that a dispute between a co-owner of an apartment building (a member/participant of OSBB) and OSBB itself regarding the invalidation of general meeting decisions belongs to corporate disputes and is subject to consideration under commercial procedural rules.
In contrast, disputes in the sphere of exercising co-owners' property rights (use of common property, disputes over utility services, etc.) fall under civil jurisdiction. For example, in the ruling dated February 2, 2021, in case No. 906/1308/19, the Grand Chamber of the Supreme Court indicated that a dispute between a co-owner of an apartment building and OSBB regarding a contract concluded by the association with a third party (service provider) is subject to consideration under civil procedural rules.
Judicial practice on the creation of OSBB
The majority of disputes regarding the creation of OSBB concern: violations of the procedure for convening founding meetings; improper notification of co-owners; determination of the number of votes; creation of another OSBB within the same building; state registration of OSBB; and the proper method of judicial protection. Analysis of the practice of the Grand Chamber of the Supreme Court, the Commercial Court of the Supreme Court, and the Cassation Civil Court of the Supreme Court indicates a gradual departure from a formal approach to assessing the procedure for creating OSBB. While initially courts focused mainly on compliance with legal requirements, modern practice is based on assessing the real impact of violations on co-owners' rights and voting results, evaluating the balance of co-owners' interests, since not every procedural violation automatically justifies invalidating decisions or applying such a radical remedy as terminating OSBB activities.
Olena Bilokon noted that a key guideline for forming such a criterion of materiality of violations was the Grand Chamber ruling dated October 16, 2018, in case No. 916/4652/15, which confirmed that arguments about improper notification of founding meetings cannot be used to terminate a legal entity.
The judge also drew attention to the Grand Chamber ruling dated June 29, 2021, in case No. 916/964/19. In it, the Grand Chamber departed from previous practice and concluded that a claim to cancel the state registration of OSBB is not a proper remedy, as it does not lead to the termination of the legal entity and violates the interests of other co-owners; proceedings in this part should be closed due to the absence of a legal dispute. Regarding the termination of OSBB activities, the proper procedure is liquidation as provided by the Civil Code of Ukraine. The Grand Chamber stated that a claim to cancel the state registration of an OSBB created in accordance with the procedure and operating for a long time, having acquired rights and obligations, is not an effective way to protect the right to participate in managing common property, since canceling state registration is not equivalent to liquidation of the legal entity and does not lead to the termination of the association but indicates impermissible judicial interference in the association’s activities and violates the interests of its other members.
General meetings of OSBB and activities of management bodies: key approaches
In the ruling dated February 1, 2022, in case No. 916/5179/20, the Grand Chamber confirmed that founding meetings are a type of general meeting of co-owners, competent to make decisions on all issues of building management. Therefore, the competence of OSBB founding meetings is not limited to the powers defined in part 13 of article 6 of the Law of Ukraine "On Condominium Associations" but may also include decisions provided for in article 10 of this Law.
The judge emphasized the principle that the court does not substitute the general meeting of co-owners and intervenes only in case of violations of the law or the charter. According to her, the court verifies the competence of the body, compliance with the procedure for convening and voting, as well as the correctness of determining the number of co-owners, premises' areas, and vote counting. Olena Bilokon cited the legal position set forth in the Commercial Court of the Supreme Court ruling dated February 2, 2026, in case No. 916/4721/24, according to which the court should refrain from excessive interference in OSBB activities, including by canceling decisions if they are undoubtedly supported by the majority of owners and do not exhibit signs of discrimination or other rights violations.
According to article 10 of the Law of Ukraine "On Condominium Associations," general meetings are the highest management body of OSBB. Their exclusive competence includes resolving the most important issues of the association’s activities, including approving the charter, making amendments, electing and recalling board members and the audit commission, approving the budget, determining the amount of contributions and payments by co-owners, and making decisions regarding management and maintenance of common property.
The Supreme Court’s practice is based on the understanding that decisions of general meetings are a form of exercising co-owners' rights to manage common property; therefore, judicial control should focus on verifying the legality of the procedure for adopting such decisions, not their expediency or economic justification.
Challenging such decisions is a type of corporate dispute; therefore, the court checks not the expediency of the decision but its compliance with the law, the charter, and adherence to the adoption procedure. This approach was finally consolidated by the Grand Chamber in the ruling dated February 1, 2022, in case No. 910/5179/20.
One of the Supreme Court’s fundamental conclusions is that the court does not substitute the general meeting. The court verifies: the competence of the body; compliance with the convening procedure; compliance with the voting procedure; the presence of the required number of votes; whether the plaintiff’s rights were violated; however, the court does not assess the economic expediency of the adopted decisions.
The Supreme Court emphasized that decisions of general meetings regarding the approval of budgets, contributions, or other management issues are the exercise of powers of the highest management body of OSBB, and court intervention is possible only in case of violations of the law or the charter. In the ruling dated February 25, 2026, in case No. 911/20/22, the Commercial Court of the Supreme Court concluded that when resolving disputes on invalidating OSBB general meeting decisions, besides establishing violations of legislative requirements and/or the association’s charter provisions during convening and conducting meetings, a mandatory condition for satisfying claims is the plaintiff’s proof of circumstances violating their rights by the challenged decision and that recognizing the decision invalid is an effective and proportionate remedy. The judge also considered the issue of the right to receive information about OSBB activities and the need to protect co-owners' personal data. She noted that co-owners have the right to access all association documents: financial and economic reports, general meeting minutes, budgets, primary accounting documents, except for other persons' personal data.
Provision of information about OSBB activities
The speaker analyzed the Grand Chamber ruling dated April 9, 2024, in case No. 925/1440/22, which confirmed the unconditional right of a co-owner to receive information about OSBB activities. At the same time, as the judge noted, to balance one co-owner’s right to information and others' right to privacy, the Grand Chamber obliged OSBB to provide documents with mandatory anonymization of personal data.
Analysis of the Supreme Court’s practice allows the following generalizations: the obligation of a co-owner to pay contributions arises directly from the law and general meeting decisions; lack of membership in OSBB or a contract does not exempt from paying contributions; arrears in contributions are monetary obligations subject to article 625 of the Civil Code of Ukraine; the court does not assess the economic expediency of approved contributions if the general meeting decision is valid; OSBB must prove the validity of the general meeting decision, the correctness of the debt calculation, and the fact of delay.
Legal regime of common property of an apartment building
Furthermore, Olena Bilokon addressed the practice of applying article 382 of the Civil Code of Ukraine regarding the definition of apartment building property. She emphasized that the disposal of co-owners' common property, including its transfer for use to third parties, belongs to the exclusive competence of OSBB general meetings. This conclusion was made in the Grand Chamber ruling dated February 2, 2021, in case No. 906/1308/19.
The judge also drew attention to the Grand Chamber ruling dated May 25, 2021, in case No. 461/9578/15-c, which established that a co-owner’s consent to dispose of common property is a unilateral transaction for which the law does not require notarization. The speaker also analyzed the Cassation Civil Court’s approaches regarding the legal regime of auxiliary premises of an apartment building, in particular the presumption of belonging of non-residential premises to auxiliary ones, set forth in the ruling dated January 22, 2025, in case No. 760/33583/21.
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