One of the most debated topics in a site is the expenses incurred by the manager. “Why did so much money go to landscaping?”, “Who was asked for a quote for elevator revision?”, “Who decided on this expenditure?” These questions form the basis of the dispute over unauthorized and exorbitant expenses. So, which expenses can the manager make alone, and for which ones is general assembly approval required? In this article, we examine the limits of the manager’s spending authority and the recourse methods against exorbitant expenses within the framework of Law No. 634 on Condominium Ownership (KMK).
What are the Limits of the Manager’s Spending Authority?
Article 35 of the KMK lists among the manager’s duties the performance of necessary maintenance, protection, and repair works for the main property. However, this authority is not unlimited. The general principle is as follows: The manager can, as a rule, make ordinary expenses foreseen in the operating budget without separate approval; however, a decision by the board of unit owners is required for extraordinary, high-cost expenses that fall outside the operating budget.
Especially for large expenses such as the purchase of fixtures, comprehensive renovations, facade renewal, and elevator revisions, a general assembly decision is required. If the manager makes such expenses without a board decision, they may not be able to demand reimbursement from the unit owners and will be personally responsible for the damage. For the legal framework, you can refer to the text of Law No. 634 on Condominium Ownership on mevzuat.gov.tr.
What Does it Mean for an Expense to Be Considered “Exorbitant”?
For an expenditure to be considered exorbitant, merely being high is not enough; an expenditure that is unreasonable given market conditions, an overpayment, is considered exorbitant. In legal practice, it has been emphasized that the appropriateness of expenditures such as elevator revisions and garden maintenance, made without general assembly approval, should be examined by an expert. The decision of the Supreme Court 20th Civil Chamber 2017/3537 E., 2018/5205 K. (03.07.2018), cited in the documents, is in this direction.
If the board of directors has more than one member, and improper expenditures are made with the signatures of all members, then for the damage, all members can be held jointly responsible. This matter was addressed in the decision of the Supreme Court 18th Civil Chamber 2010/13214 E., 2011/5444 K. (21.04.2011).
What Can Be Done Against Exorbitant Expenditures?
Here are the methods homeowners who detect unauthorized or exorbitant expenditures can apply. Firstly, documents forming the basis of the expenditure (invoice, offer, contract) should be requested in writing from the management. If there is a general assembly decision approving the expenditure, a lawsuit for annulment can be filed against this decision within one month from the decision date. If the property has suffered damage due to the manager’s fault, a compensation lawsuit may arise under Article 38 of the Condominium Law (KMK). Furthermore, exorbitant expenditure is also a reason for the manager’s dismissal for just cause.
As a supplement to this topic, you can also review our blog posts “What is the Manager’s Liability for Compensation?” and “What Can Be Done If the Site Manager Does Not Account?”
Frequently Asked Questions (FAQ)
Which expenses can the manager make without approval? They can incur routine expenses such as ordinary maintenance, cleaning, and lighting, as foreseen in the operating plan. High-cost and extraordinary expenses outside the operating plan require a general assembly decision.
How is an exorbitant expense proven? The suitability of the expense to market conditions is usually determined by an expert examination. Therefore, it is important to collect invoice, offer, and contract documents.
Are all board members held responsible? If an irregular expense was made with the joint decision and signature of all members, the members may be held jointly liable for the damage.
Can the cost of an expense made without approval be demanded from the flat owners? As a rule, no. For unauthorized and unnecessary expenses, the manager may not be able to demand payment from the flat owners and will be personally liable for the damage.
Why is Expert Legal Support Necessary?
Allegations of exorbitant expenses require technical steps such as document review, expert reports, and comparison of the expense with market conditions. Structuring the process correctly requires professional support from the very beginning of the dispute.
As 2M Hukuk Law Office, we are by your side in condominium disputes not only during the litigation phase but from the very beginning of the process that gives rise to the dispute. Our main services include:
Within the scope of Istanbul complex and apartment consultancy, the legal structuring of management and budget processes from start to finish,
For manager selection/change, preparation of extraordinary general meeting notices and invitations for flat owners,
Preparation of site meeting invitations and minutes; proper drafting of ordinary and extraordinary meeting minute drafts,
Conducting meetings and votes in accordance with the Condominium Law (KMK), proper adoption of decisions and correct calculation of quorums,
Follow-up and representation in lawsuits for annulment of general assembly decisions, dismissal of the manager, compensation, and excessive expenditures.
With our experienced condominium lawyer and condominium law attorney staff; we are by your side for your Istanbul condominium law attorney and Tuzla condominium lawyer needs. To get to know our team, you can review our team page, and to evaluate your case, you can contact us.
