“The common representative says there is no point reporting it, because the insurer won't pay anyway” – “the policy won't be handed over because it is the building's business” – “they have been promising for two months to send the claim report”. These sentences come up regularly on forums and in my own inbox as well. At such times the resident feels powerless, even though the Condominium Act and the policy conditions put more tools in their hands than they might think. This article goes through what a co-owner is entitled to with respect to the building's insurance, and in what order it is worth using those rights.
- On the building's policy the co-owners are insured persons; Hungarian policy conditions typically make reporting a claim an obligation of both the policyholder and the insured, so a resident can typically report damage to their own separate property themselves if they know the policy details.
- The policy is one of the building's documents: under the Condominium Act (Tht.) any co-owner may inspect the minutes and the Book of General Meeting Resolutions, and case law extends the right of inspection to the building's contracts as well.
- If the representative fails to act, three routes remain: a general meeting, which can be requested by owners of one tenth of the ownership shares, the legality supervision of the town clerk (jegyző), and ultimately the courts – the insurer does not decide disputes between the representative and a resident.
Why does the representative report – and why not only the representative?
The policyholder is the condominium, and the contract is managed by the common representative (the building's elected manager): under Section 43(1) of the Condominium Act (Tht.), the representative prepares and implements the resolutions of the general meeting and takes all necessary measures for the maintenance of the building – reporting a claim naturally falls within this. That is why claims on the building's policy are typically reported by the representative, as the article on who does what also shows.
That does not make the resident an outsider, however. Hungarian condominium policy conditions typically name the condominium and the co-owners as insured persons, and place the obligation to report a claim on both the policyholder and the insured – one Hungarian wording, for example, requires reporting within five working days of becoming aware of the loss, and attaches consequences to a failure by the policyholder or the insured. Under Section 6:453 of the Hungarian Civil Code (Ptk.), the insured event must be reported within the time limit set in the contract; the legal consequences of late reporting, however, apply only if material circumstances can no longer be established because of the delay. In other words: if you, as an insured person, report damage to your own separate property to the building's insurer, the insurer will typically accept the report – and during the claims settlement it will then also ask for the representative's cooperation (policy details, classification as common or separate property, the recipient of the payment).
Does a resident have the right to see the policy?
Yes. Under Section 39(3) of the Condominium Act, any co-owner may inspect the minutes of the general meeting and may request a copy on paying the copying costs; Section 45(2) says the same for the Book of General Meeting Resolutions. The resolution on the insurance and the related offer are therefore accessible in any case. Case law goes further – articles on real-estate law refer to decision no. Pfv.I.21.076/2014 of the Curia (Kúria, Hungary's supreme court): a co-owner may also inspect the building's contracts and the supporting documents of its costs, with personal data redacted. The insurance policy is a contract of the building, so the request is legitimate; it is worth making it in writing, with a date, and asking for the sum insured and the renewal date in addition to the policy number, the insurer's name and its claims line.
In a well-run building this is not a matter of asking: the representative states the insurer's name, the policy number and the route for reporting claims in the information notice for residents in any case. Where this is in place, most disputes never arise.
“The representative rejected the claim” – they cannot do that
The representative is not the insurer. Whether a loss is an insured event is decided by the insurer on the basis of the policy conditions – the representative can at most give an opinion, but cannot “reject” the report. If they do not pass it on, do it yourself: ask in writing, with a short deadline, for the report to be made or for the policy details, and indicate that otherwise you will contact the insurer directly as an insured person. In the meantime, do your own part: under Section 6:463 of the Civil Code, the policyholder and the insured must mitigate the loss in the manner that can be expected of them – turn off the water, take dated photographs of the damage and its source, and keep the invoices. The reporting procedure is described in the reporting a claim step by step article.
There is one thing, however, that the representative genuinely cannot report on the building's policy: anything that does not belong there. The contents of a flat, some of the separate property inside the flat and the resident's own liability are a matter for the resident's own home insurance – the boundaries are shown in the article on how the two insurances relate. If in doubt, report in both places: a report in itself does not oblige the insurer to pay, but failing to report can come at a price.
If the representative repeatedly fails to act: general meeting, town clerk, court
The Condominium Act makes the community, not the insurer, the representative's “boss”. Under Section 35(2) of the Condominium Act, co-owners holding one tenth of the ownership shares may request in writing, stating the agenda, the reason and the proposed resolution, that a general meeting be convened, and the representative is obliged to comply; under Section 28(1), electing and dismissing the representative is the exclusive competence of the general meeting. If the building is operated unlawfully, under Section 27/A of the Condominium Act the town clerk (jegyző, the local government's chief administrative officer) exercises legality supervision – this concerns the operation of the building, not an individual claim. Under Section 42(1), a resolution of the general meeting can be challenged in court within sixty days, and the representative may be liable under the general rules of civil law for damage caused to the building by their failure to act.
A dispute with the insurer is a different track: there the first step is a complaint lodged with the insurer; after that, an owner who is a private individual may turn to the Financial Arbitration Board (PBT), and the building as a community to the courts – the MNB (Hungary's central bank and financial supervisor) does not decide individual claims disputes.
What a resident should do – step by step
- Mitigate and document the loss without delay: photographs, date, source of the damage, witnesses, invoices.
- A written request to the representative for the policy details and for the report to be made, with a short deadline – by e-mail, so that there is a record.
- If there is no reply: report directly on the claims line of the building's insurer, as an insured co-owner, giving the building's name and address; in parallel, report to your own home insurer as well.
- If the failures are repeated: initiate a general meeting with one tenth of the ownership shares, if necessary turn to the town clerk, and ultimately to the courts.
As a broker, I work on the building's behalf: if the building is my client and a claim has got stuck, I help where I can – but the primary route for reporting a claim is the insurer's claims line, and I am not an arbiter in a dispute between a resident and the representative. What I can offer is a clear information notice for residents and a claims reporting procedure for the building, so that the list above is not needed.
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Sources
- Condominium Act (Tht., Act CXXXIII of 2003 on condominiums) – National Legislation Database (Nemzeti Jogszabálytár)
- Hungarian Civil Code (Ptk., Act V of 2013) – National Legislation Database (Nemzeti Jogszabálytár)
- Colonnade ATLASZ Társasház Biztosítás (condominium insurance) – policy conditions and customer information (2023)
- Dr. Enikő Nagy – Which condominium documents may an owner inspect? (Condominium Act (Tht.) Section 39, Curia decision Pfv.I.21.076/2014.)
- MNB (Hungarian central bank / supervisor) – Financial Arbitration Board (PBT)
- ingatlan.com Tudástár (knowledge base) – Duties and liability of a condominium's common representative
