Set-Off Between Claims and Debts Toward the Condominium

Set-off is the mechanism by which two mutual obligations are extinguished up to the lesser amount. In a condominium the question recurs: can an owner who holds a claim against the condominium, for example a reimbursement or damages compensation, refuse to pay contributions by setting off the two items? The general rule is restrictive: a defaulting owner normally cannot escape payment of contributions by generically invoking their own claim, because the payment of expenses serves common management and cannot be unilaterally paralyzed.

The three types of set-off

The Italian Civil Code distinguishes legal, judicial and voluntary set-off. Legal set-off operates when the two claims are both certain, liquid and due: only where these requirements exist does extinction occur automatically. Judicial set-off presupposes that a claim, not yet liquid, is readily and easily quantifiable by the judge. Voluntary set-off, finally, arises from agreement between the parties. In the relationship between owner and condominium the requirements of legal set-off rarely occur, and this is where the practical limits arise.

• Legal set-off: claims certain, liquid and due, automatic extinction.
• Judicial set-off: claim readily and easily quantifiable, ascertained by the judge.
• Voluntary set-off: agreement between owner and condominium.
• Requirements rarely met in the relationship over condominium contributions.

Why the defaulter cannot set off at will

The owner's claim against the condominium, for example a demand for reimbursement or compensation, is generally neither certain nor liquid until ascertained: it is challengeable in its existence and amount. The prerequisite of legal set-off is therefore missing. Allowing the owner to withhold contributions based on a claim not yet ascertained would mean letting them take justice into their own hands, with the risk of paralyzing management and shifting the burden of common expenses onto the other owners. This is why case law is traditionally strict.

When set-off can operate

Set-off can instead matter when the owner's claim is certain, liquid and due, for example because already ascertained by a judgment or acknowledged by the condominium, or when the parties reach a voluntary agreement. Even a balance in the owner's favor, resulting from the approved statement of accounts, constitutes a certain item that is set off against what is still owed. In these cases the logic of set-off is consistent with the certainty of the opposing items.

Set-off and the payment order

In the opposition proceedings against a payment order for contributions, the owner may raise a counterclaim, but the judge assesses its requirements. If the counterclaim is not readily and easily quantifiable, the order is normally confirmed and the condominium's claim prevails, subject to the owner's ability to assert their claim elsewhere. It is therefore not enough to assert being a creditor in turn to block the injunction: a claim ascertainable with immediacy is required.

Mistakes to avoid

The owner who suspends payments trusting in a set-off not yet perfected is exposed to compulsory recovery and to being charged interest and legal costs. It is better to assert one's claim separately, or to agree with the manager on a formalized voluntary set-off. The manager, in turn, must not accept unilateral set-offs that alter the balance of the common fund, but may propose settlement solutions to the meeting when the owner's claim is well-founded.

• Do not suspend contributions over a claim not yet ascertained.
• Assert your claim separately or agree on a voluntary set-off.
• Document in writing every set-off agreement.
• The manager avoids unilateral set-offs not resolved by the meeting.

The manager's role

The manager must keep accounts that make credit balances, acknowledged reimbursements and unpaid amounts immediately visible, so as to distinguish certain items from contested ones. When an owner holds a credit balance, it should be set off against what is owed without generating contradictory notices. Orderly management of the items reduces occasions for conflict and clarifies which claims are actually enforceable.

Keeping balances, reimbursements and unpaid amounts under control for each unit is essential to correctly handle set-off objections. With AmministraPro the manager sees credit and debit balances in real time, distinguishes certain items and produces clear account statements to support every decision. The accounting features are described on the /funzioni page and the plans on the /prezzi page.