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Management committees fall foul of law

A number of management committees, which manage and administer jointly-owned buildings in Cyprus, have recently found their bank accounts frozen due to a law introduced in 2017.

Cyprus: Management committees fall foul of lawAS REGULAR readers will be aware, Management Committees are responsible for the management and administration of communal areas in apartment buildings and residential units in some other types of building complexes in Cyprus.

Management Committees collect communal expenses from the unit owners to operate, insure, maintain and repair the communal areas such as: entrance foyers; stairwells; lifts; external walls; and common facilities such as swimming pools and tennis courts. Committees invariably open bank accounts to manage these expenses.

Although the law and regulations governing the management of buildings under joint ownership works well in cases where everyone pays their communal expenses, it is hopeless in situations where owners refuse to pay. Reform of the law is urgently needed to enable committees to better deal with these situations.

But a new problem has recently come to my attention, which results from legislation introduced in 2017 governing associations, foundations, clubs and federations. This has resulted in banks freezing the accounts of some committees.

Although this law was never intended to affect committees, for reasons best known to themselves, some Management Committee have opened bank accounts with a name that includes ‘Residents Association’ and this has brought them into conflict with the 2017 legislation.

By calling themselves an ‘Association’ rather than a ‘Committee’ they are required to provide the bank with their ‘Articles of Association’, which has been approved and stamped by the Interior Ministry and other information as required by the law. As they have been unable to supply this information, some banks have frozen their accounts.

If you are a member of such a Committee, I suggest you visit the bank and resolve the problem. If you are in the process of establishing a Management Committee do not, under any circumstances, try to open a bank account that includes the word ‘Association’.

(I am currently the Secretary of the Cyprus Third Age Association (C3A), which is one of many thousands of U3As around the globe that gives members the opportunity to make new friends, pursue their interests and participate in a range of activities through regular meetings and special interest groups organised and run by members.

Like all the other Associations in Cyprus we have been affected by the legislative changes, but the impact on ourselves has been minimal.)

Readers' comments

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  • Stuart Lodge says:

    I am in a complex with 9 apts ,2 are empty and in the hands of the banks,2 are occupied but are non paying there fees and the remaining 5 pay in instalments through the year.
    How do we go about getting the banks to pay for communal fees where the apts are stood empty but the banks own them and the other 2 non payers, how do we get them to pay there fees, hence 1 is a teacher.?

    Ed: Your Management Committee will need the help of a lawyer. A ‘stiff’ letter to the debtors may ‘encourage’ them tp pay. If not the usual remedy is to lodge memos (charges) against the debtors’ properties.

    (As I wrote in the article “Although the law and regulations governing the management of buildings under joint ownership works well in cases where everyone pays their communal expenses, it is hopeless in situations where owners refuse to pay. Reform of the law is urgently needed to enable committees to better deal with these situations.”)

    In future, please follow the comment guidelines.

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