In June I published details of a draft jointly-owned building law designed to solve a host of serious issues with the current law including the lack of management committees, non-payment of communal fees, insurance, etc., etc.
Prepared by the Department of Lands and Surveys, the objective of the law is to provide management committees with the flexibility to carry out its obligations, to ensure that unit owners meet their obligations and that properties are properly maintained.
The new bill has completed its public consultation phase and is now in the final stages of preparation; it should be ready for judicial review in a month.
Stockwatch reported on some of the discussions taking place on the bill at the Parliament’s interior committee.
Speaking to the committee DISY MP Nikos Georgiou said that the state must regulate the problems related to the maintenance and repair of jointly-owned buildings. He referred to a recent incident in Limassol where part of a balcony of a jointly-owned building in Limassol collapsed.
The MP added that apartment buildings in this condition pose a risk to the public health and safety of the owners, tenants and those who live outside these buildings.
(There were two such incidents reported in October in which one woman was slightly injured. Also in October, a woman died after falling from a balcony in Paphos. In July, four balconies in Paphos collapsed.)
Chairman of the committee, AKEL MP Aristos Damianou, said that the majority of jointly-owned buildings have not been registered and the committee will examine the issue in the coming days.
Mr Damianou added that in the meantime many companies have taken over the management of jointly-owned buildings that they have developed, which may cause questions. In many cases these buildings have no management committees and this causes problems due to their non-existence and non-payment of due amounts.
According to the Ministry, new bill will make the establishment of a management committee mandatory and it will have to be registered.
I expect there will be further discussion on this new bill and it will resolve the multitude of problems with the existing law.
Non-payment of communal fees
In my 20+ years experience, the most urgent problem to address is the non-payment of communal fees. Debts must be collected as soon as possible if jointly-owned buildings are not going to fall into disrepair and collapse like those reported in Limassol and Paphos. For example:
- Instigating a small court claims procedure where debts will be repaid in 2 or 3 weeks.
- Seizing movable property owned by the debtor and selling it to repay the debt.
- Securing the property thereby preventing its owner (or tenant) from entering the property.
- Restricting withdrawals/transfers from the debtor’s bank account(s) until the debt has been paid.
- Preventing the sale, renting, mortgaging and otherwise disposing of properties whose owners have not paid their communal fees.
- Lodging a lien against a contract of sale in cases where no title deed has been issued in the name of the debtor.
Of course, there will be genuine cases of hardship preventing owners from paying communal fees. These must be taken into account and a settlement negotiated.
The final two on the list above, preventing the sale and lodging a lien, will not achieve the quick results necessary and will only act as a final stop-gap measure.
Under the current law, management committees can take legal action against the debtor. But this does not provide a solution to the problem.
Court cases can take 3 or 4 years to be heard and even if successful payment is not assured and further court action is required. A court may also the debtor to repay the debt in low value instalments, and it could take many years to recover the debt (assuming the debtor abides by the court ruling.)
The kiss of death approach
The new law must not obligate the owners who pay their communal fees to pay the debt of those who do not pay. These owners will refuse to pay the debt and, as a consequence, often refuse to pay their communal fees as well – “Why should I pay when someone else is not paying?”. Such a move will have a domino effect until no-one pays, the management committee resigns and the jointly-owned building falls into disrepair.