News for associations

On February 8, 2024, the Supreme Court ruled that a board in a housing cooperative is not only required to ensure that transactions do not occur at an overprice but also must loyally provide a selling shareholder with all relevant information that may be significant for the pricing of the share.

The judgment emphasizes the importance of the tasks described in Section 6c of the Cooperative Housing Act being known by all boards in housing cooperatives, and it could be considered to incorporate these points into the specific bylaws, so any elected board is aware of the minimum tasks they are obligated to undertake. Furthermore, it is now established that a transfer agreement is only final (binding) between the parties involved when the board has joined/signed the agreement.

The case briefly:

• A resident decided to sell and entered into an agreement with a buyer. According to the bylaws, the board was required to approve the agreement and thus all terms of the transaction. The Supreme Court stated that, according to the Cooperative Housing Act, a transfer agreement is always only valid (binding) when the board has approved it, and therefore the agreement between the seller and the buyer was only conditional.

• The cooperative had previously used the public property valuation but decided in the spring to obtain a valuer's assessment. At the time the board signed, they had received a valuer's assessment indicating that the value could increase between 16 and 18% if they decided to use this model in the fall.

• It was several weeks after the board's signature on the transfer agreement before the seller was informed about this. By sticking to the agreement, the seller lost an amount of approximately 149,000 DKK. In the cooperative's bylaws, there was an option to enter into a price adjustment clause.

• The Supreme Court made it clear that the provision in Section 6c of the Cooperative Housing Act, which describes a board's tasks, is an absolute minimum and that the provision in § 6c(4) expresses that the board loyally and as soon as possible must pass on information to the seller that gives the seller the opportunity to arrange their sale as best as possible. In the specific bylaws, there was a possibility for the seller to have demanded an adjustment clause to be added, but in other situations, such information could also give the seller the opportunity to possibly delay the transaction until they could demand "the right price."