New Law on Residential Buildings with Common Property

In order to avoid misunderstandings, we have to recognize that there is currently appropriate legislation governing joint ownership of buildings, which, however, is not without significant shortcomings.

The first problem:

quite often there are difficulties in collecting common charges from owners who do not pay in a timely manner. Recovery requires filing a lawsuit through the courts, in a civil case, which is a costly and time-consuming procedure for any Management Committee (MC) to begin with.

Fines With a newly introduced bill currently being debated in the House of Representatives, the CG can impose a fine on an owner who owes common charges. The new Agency to be established at the level of the respective municipalities (Agency) will have the ability to impose an administrative fine on the owner. The agency will be able to sue the defaulter by filing a civil or criminal case. In order for nonpayers to present a defense in a civil case, they must first pay their utility debts, either to the judge's bailiff or the CHP, and then contact an attorney to prepare a defense. The CG will be able to restrict the rights of the defaulter, including prohibiting access to his property. This provision of the bill requires further explanation. Specifically, what exactly will the CHP be allowed to do to put pressure on the non-payer?

Capital Repair Fund

Another problem is that both in the existing legislation and in the draft law there is no provision obliging the creation of a capital repair fund. Currently, only a small number of buildings have an established capital improvement fund used to raise money to be used for major repairs such as roof insulation, elevator replacement, entryway improvements and maintenance (repairing major cracks, painting, etc.). e.) on the exterior building envelope. It is much easier and more prudent to have a significant amount of money in the building fund at the time of major renovations than to require owners to commit a substantial amount of money in a relatively short period of time when the need arises. We believe that the new legislation should oblige the creation of a capital repair fund.

The main problem

But what seems to be the biggest problem? Perhaps the most serious flaw in the new bill is the lack of a requirement for transparency through regular and reliable provision of information to owners by CHPs.

The bill revises the allocation of common expenses so that only 40% of covered porches and 20% of uncovered porches are included in the calculation of the total floor area of an apartment. It is clear that owners in shared buildings retain the right to set their own regulations, deviating from the Standard Regulations that accompany the legislation. This means that owners with a 75% majority can change the provisions of the Standard Regulations.

The new bill

improves the procedures, rights and responsibilities of concerned owners and CHPs when an apartment creates a problem either in relation to another apartment or in common areas.

Maintenance of records

The bill transfers the supervision of shared buildings to the district authorities of municipalities instead of the Real Estate Registry, which is currently the established procedure. The involvement of the Real Estate Registry in the problems of shared buildings has so far been almost negligible. We hope that the new Agency, within the municipalities, will be able to fulfill its mission so that problems such as the lack of a Management Committee, delayed payment of utilities by owners and timely repairs will find their solution as soon as possible.

We should emphasize that the bill requires Management Committees to obtain a certificate of building compliance from consultants (kind of like a maintenance inspection for buildings), which is also a requirement of other citizen safety legislation. Shared ownership buildings should be required to register in the Agency's registers and notify the Agency annually of the establishment of a Management Committee by paying the relevant annual fee (€20).

In summary, the new bill offers some solutions to the major problem of non-collection of common charges. The second major concern about the lack of transparency and provision of accurate and timely information is not addressed by the new bill, and is something the House should correct during debate on the bill.

Our final concern is that with the increased duties and responsibilities of CG members, few, if any, will be interested in participating in the Management Committees. Our proposal is that all owners should be appointed as members of the CG by law, but for practical reasons a small group of owners should act as the executive committee of the CG.

About the Author George Mouskides is a director of FOX Smart Estate Agency and chairman of the Cyprus Property Owners Association.