Court dismisses and appoints VvE board. But is that right?

The Hague Court of Appeal, in a ruling last Tuesday (ECLI:NL:GHDHA:2025:2012) determined that the board of a small Owners' Association (VvE) was properly dismissed. In doing so, the Court also granted substitute authorization to appoint a new board. But is that even possible? The Court of Appeal itself seems to doubt this, according to the text of its ruling. Attorney Robert van Ewijk specializes in VvE Law and discusses the ruling.

VvE with two members: impasse over board appointment

This case involves a Rotterdam-based VvE. It consists of only two members. The members of the BoE live at odds with each other and argue about everything, including the question of who may form the board of the BoE. One of the owners therefore filed a petition for the granting of a substitute authorization to dismiss the board of the CoE. In the proceedings at first instance (ECLI:NL:RBROT:2024:6160), the subdistrict court rejected the request. In its ruling of May 31, 2024, the Subdistrict Court considered, correctly in my opinion, that Article 5:121 of the Civil Code provides no basis for granting an authorization to dismiss a VvE board.

Case law on substitute authorization for dismissal of VvE board

In doing so, the subdistrict court is critical of a ruling by the Arnhem-Leeuwarden Court of Appeal on Feb. 15, 2022 (ECLI:GHARL:2022:1126). That Court determined in that decision that a substitute authorization under article 5:121 BW can also be granted when it comes to lack of cooperation in the appointment or dismissal of a director. The Rotterdam subdistrict court does not follow that reasoning. It considered instead:

“2.5 (...) By judgment of the Court of Appeal of Arnhem-Leeuwarden (Court of Appeal of Arnhem-Leeuwarden February 15, 2022, ECLI:GHARL:2022:1126), it was indeed ruled that Section 5:121 of the Dutch Civil Code also permits a substitute authorization for the appointment or dismissal of a director, but the Court of Appeal did not thereby provide insight and reasoning as to how it arrived at this conclusion via a test against Section 5:121 of the Dutch Civil Code. There is also no other case law that supports the opinion of the court of appeal. On the contrary, now that the (lower) case law takes the view that Section 5:121 DCC does not provide a basis for this. The Subdistrict Court therefore believes that there is insufficient reason to rule in line with this opinion of the Arnhem-Leeuwarden Court of Appeal.”

That there is no other case law supporting the judgment of the Arnhem-Leeuwarden Court of Appeal has since become obsolete. Indeed, a few months later, a colleague of the subdistrict court that issued the aforementioned ruling gave substitute authorization to appoint a new board. In that ruling of October 7, 2024 (ECLI:NL:RBROT:2024:9677), the authorization is given with reference to the court ruling of February 15, 2022. As in that court ruling from 2022, the subdistrict court in its October 2024 ruling did not substantiate why Section 5:121 of the Dutch Civil Code would give room for this. It merely referred to the judgment of the Arnhem-Leeuwarden Court of Appeal. For the Rotterdam subdistrict court in the present case, the lack of substantiation in that court ruling was reason not to follow it.

About the ruling of the district judge that the substitute authorization to appoint an administrator granted, I have been critical in an earlier blog. You can read that blog here.

Court of Appeal: 5:121 BW also for appointment and dismissal of board

The Hague Court of Appeal does otherwise. It does give reasons why a substitute authorization could be given where it concerns the appointment or dismissal of directors. That reasoning boils down to the following:

• (consideration 8.7) article 5:121 BW opens the possibility to ask for a substitute authorization “to perform certain acts with respect to the common parts or with respect to the use, management and maintenance of the private parts”;
• (recital 8.9) the Court infers from the legislative history that this is intended to limit the scope of application of Article 5:121 BW to actual acts and legal transactions that have a direct relationship “with (the use, management or maintenance of) the common or private parts.”
• (recital 8.9) because the management of the common parts is carried out by the board of the VvE, the request to replace the board is sufficiently related to the management of the common parts and therefore under the scope of Section 5:121 of the DCC;
• (Consideration 8.10) the impasse prevents the necessary structural maintenance of the property;
• (recital 8.10) therefore, the Court is of the opinion that a substitute authorization can be granted under Article 5:121 of the Civil Code to appoint a professional VvE administrator.

However, I doubt that this reasoning holds up. While I understand that there is a situation in the VvE where something needs to be done, and while I therefore find the outcome of the proceedings desirable to some extent, I do not agree with the Court's reasoning.

Legal text of article 5:121 BW offers no opening for appointment of manager or director

First, the legal text. The interpretation of the Court of Appeals is that actual acts and legal acts that have a direct relationship with (I quote the Court) “(the use, management or maintenance of) the common or private parts”, fall within the scope of Article 5:121 BW. However, the legal text reads differently. It does not cover (among other things) the management of “common or private parts”, but to “acts relating to the common parts” or actions “relating to use, management and maintenance of the private parts.”

Thus, first, it does not include acts relating to the use, management and maintenance of the common parts. Only actual acts related to the common parts are covered.

Second, the appointment of a director or manager does not involve an ‘act relating to management’ of a common thing or common portion, but an act relating to the management of the legal entity. That one of the duties of that board includes the management of the common parts (but not the non-private parts) does not make that different. That is too broad an interpretation for that provision.

Legislative history precludes the broad interpretation given by the Court

Especially since the legislative history precludes this broad interpretation. In the explanatory memorandum to Article 875o (old) BW (the predecessor of Art. 5:121 BW) states (MoT, Parliamentary Papers II 1970/71, 10987, no. 3, p. 17):

“The cases in which an apartment owner's consent may be replaced by court authorization are specified in the first paragraph. This may involve, firstly, an act relating to the parts not intended to be used as a separate whole and, secondly, an act relating to a private part (...). This definition prevents any possible overly broad application of the article, for example, when some of the joint apartment owners (...) would like to establish an easement on one or more of the plots involved in the division and the others refuse their cooperation to do so.”

Thus, the legislature's intent was to give limited scope to the ability to request a substitute authorization.

Is the Court itself sure of its case?

Incidentally, from the text of the Court of Appeal's order it is also possible to infer that it may have doubts about the correctness of its reasoning. In any case, the possibility that this reasoning does not hold up is explicitly kept open. Indeed, legal consideration 8.11 opens with the words: “In case it should be ruled that the appointment of a new board does not fall within the scope of Section 5:121 of the Dutch Civil Code, the court considers the following.”  Next comes a line of reasoning that I believe is legally conclusive. Moreover, this reasoning shows that application of Section 5:121 of the Civil Code is not even necessary in this type of case.

Reasonableness and fairness require apartment owners to cooperate in appointment of board

Indeed, the Court of Appeals then applied the ‘ordinary’ reasonableness and fairness of article 2:8 BW grant. It follows that apartment owners must behave towards each other according to what is required by reasonableness and fairness. Under the circumstances, in which the VvE is ungovernable due to the disrupted relationships, this implies that they are obliged to cooperate in the appointment of a new and impartial director. The Court explains this in consideration 8.11:

• the VvE has become ungovernable due to disturbed relations;
• members bother each other during meetings
• members invariably vote against each other's proposals;
• and litigation has become structural.

The Court then rules:

“The Court of Appeal is therefore of the opinion that the requirements of reasonableness and fairness in the present case imply that [interested party] and [Intimated] should both lend their cooperation to the appointment of a new and impartial director, and that - if they fail to do so - the Court of Appeal should be able to break the impasse thus created by appointing another, independent director itself with the application of Article 2:8 jo. 5:121 of the Dutch Civil Code.”

Yet another (unnecessary and incorrect?) reference to Art. 5:121 BW

I find that last sentence quite remarkable. First of all, it is not correct to refer to Section 5:121 of the Dutch Civil Code. Not only is this unnecessary, but the entire reasoning in consideration 8.11 assumes that Section 5:121 does not apply in the present case. It is difficult to understand why the judgment in that consideration is based (in part) on Section 5:121 of the DCC.

Moreover, the Court there says that if the owners do not get out of the impasse, that the Court will “by application of article 2:8 jo. 5:121 BW”, “itself another independent director” can name. This is not correct. After all, Section 5:121 DCC only empowers the court to grant an authorization thereto to an interested party, not to appoint a director itself. Therefore, in my opinion, it would have been better if the Court of Appeal had omitted the reference to Section 5:121 of the DCC in paragraph 8.11 of law.

Lawyer in case of impasse in VvE over appointment and dismissal of board

If your VvE is in an impasse over the appointment or dismissal of a director of the VvE, you can turn to Lexys. Whenever possible, we will certainly invoke the ruling of the Court of Appeal of The Hague. Whether this will include the part in which a substitute authorization is requested for the appointment or dismissal of a board is doubtful. For that, in my opinion, the following applies:

1. The legal text of Art. 5:121 BW does not allow for its application for appointment or dismissal of a VvE board;
2. the Arnhem-Leeuwarden Court of Appeal, while allowing it in 2022, did not justify why it could;
3. a Rotterdam subdistrict court followed that line in its October 2024 ruling, but merely referred to the judgment of the Arnhem-Leeuwarden Court of Appeal, which was not further substantiated on that point;
4. on the rulings of the Rotterdam subdistrict court and the Arnhem-Leeuwarden Court of Appeals, there has therefore been criticism (including from another Rotterdam subdistrict court judge);
5. the Hague Court of Appeal also ruled in 2025 that Section 5:121 of the Civil Code can be applied in this type of case, but the reasoning is wrong in my opinion.
6. The Court of Appeal itself seems to doubt this, but introduces Art. 2:8 BW as a basis by which the same result can be achieved.

I find the latter in particular to be good news for VvE practice. It often happens that (especially small) associations are stuck in deadlocks, which are very difficult to escape from. With this ruling of the Court of Appeal of The Hague, fortunately this will now change.