Jointly-owned buildings: management committees & Title Deeds

Following my rant last week on communal fees for jointly-owned buildings in Cyprus, I’ve been contacted by several property owners facing another frustrating issue – the mistaken belief that they cannot establish management committees because they have yet to receive the Title Deeds for their properties.

In such cases, owners continue to pay regular maintenance fees to their property developers, ostensibly for the upkeep and repair of their buildings. However, many report a complete lack of transparency regarding how these fees are calculated or where and how the money is spent. Numerous owners describe the maintenance work as both substandard and overpriced compared with what friends in similar developments are paying.

In some developments, owners have reported that developers are not contributing towards communal fees for unsold units, even though the units are fully finished and ready for occupation.

Meanwhile, a few others say that individuals who obtained their homes through antiparochi agreements are refusing to pay communal fees altogether.

(Antiparochi refers to an arrangement between a landowner and a property developer, whereby the landowner exchanges land for a certain number of completed units on that land – no money changes hands.)

The law relating to management committees

Under CAP 224 – The Immovable Property (Occupation, Registration and Valuation) Law, an ‘owner’ is defined as:

“The person entitled to be registered as the owner of any immovable property, whether or not it is so registered.”

Section 38 of this law governs Buildings under Joint Ownership, setting out the rules and regulations for managing apartment blocks and communal complexes in Cyprus.

This means that even if a buyer has not yet received the Title Deed for their property, they can still form a Management Committee, provided that the building itself has been registered as a jointly-owned building with the Land Registry.

Proposed legal changes

If the revised law is approved, the requirement for registration in the Land Registry may be replaced with a simpler condition – that the building must at least have a valid building and subdivision permit.

This change would enable property buyers to establish management committees much earlier, possibly many years earlier – long before the jointly-owned building is formally registered, and Title Deeds are issued.

Jointly-owned buildings insurance

The rules concerning insurance for jointly-owned buildings are also set to change.

Under the current law:

“The Management Committee must insure, and keep insured at all times, the jointly-owned building against fire, lightning and earthquake…”

The revised law proposes the following amendment:

“The Management Committee must insure, and keep insured at all times, the jointly-owned building against fire, explosion, lightning, flood, water leakage from a tank, appliance or pipe, and earthquake…”

Additionally, the revised law will require public liability insurance:

“The Management Committee must maintain public liability insurance for a jointly-owned building, for an amount it deems appropriate.”

A new provision also clarifies that:

“Unit owners have the right to take out insurance for the contents of their individual units.”

Hopefully, the updated legislation will put an end to the arguably unlawful practice adopted by some management committees, which only insure the jointly-owned property (i.e. the parts of the building not registered as individual units) rather than the entire jointly-owned building.