EVERY apartment building and units in some other types of building complexes contain common areas (such as lifts, corridors and swimming pools) which need maintenance.
It is in the interests of all of the owners of units in a building to ensure the good upkeep and repair of such areas which (when kept properly) help to boost the value of the individual units, not to mention the quality of life of the current occupants.
However, the law in relation to the management of common areas and shared facilities is an area which can cause considerable confusion and, sometimes, unpleasant disputes. So, how and when should a management committee be established and (once set up) what powers does it really possess?
When is a management committee needed?
The Law states that where a building consists of at least five units then it should be registered as a jointly owned building at the Land Registry. Where there are between two and four units then, if the owners of at least 50% of the joint ownership or any two owners of units wish, they make a request that these premises are also registered as jointly owned.
The registration of a jointly owned building at the Land Registry is made by an application submitted by the owner of the building. The owner is defined by the law as the person entitled to be registered as the owner or the actual person registered. Therefore, a project without separate deeds can be registered.
Regulations for the management committee
The owners of the units of jointly owned buildings may (by 75% agreement) draw up their own rules for a Management Committee or amend the Regulations in the Law, providing for the manner in which their building will be controlled, managed and enjoyed.
Such Regulations should be drawn up by a lawyer in order to ensure that they comply with the law. Most particularly the Regulations may not:
- Limit transfer rights of the units;
- Terminate or alter the rights of any owner of a unit;
- Impose an obligation or payment not specified by law or Regulations;
- Allocate a specific part of the jointly owned property as limited unless this is done in accordance with the law.
Registration of regulations
Registration of Regulations, or any amendment of the Regulations, is effective by submission of a certified copy of such to the Director of the Land Registry.
The nature of the management committee
Once established, the Committee’s duties (amongst others) will be:
- To control and manage the jointly owned property;
- To keep the jointly owned property in good condition;
- To hold a general meeting of unit owners at least once a year;
- To arrange appropriate insurance (as prescribed by law) for the jointly owned property;
- To establish and maintain a fund for management expenses and insurance.
The Committee may:
- Sue and be sued in relation to matters concerning the jointly owned building;
- Sue for and in relation to any damage or injury caused to the jointly owned building by any person;
- Enter into contracts in relation to the maintenance and management of the jointly owned building;
- Sue and be sued in relation to matters of applications of the Law and their governing Regulations.
Unit owner’s responsibility
The unit owners of a building must each contribute towards the expenses necessary for the insurance, maintenance, restoration and management of the jointly owned property.
The calculation for the proportion of each unit’s share can often cause conflict. The proportionate use of the facilities is irrelevant and in fact each unit owner is responsible for a share which will be determined on the basis of the area of his unit.
If any unit owner does not comply with his obligation to contribute to the insurance and upkeep of the building then the Management Committee may take legal action against him to recover the outstanding sums.
A problem encountered by many Management Committees (particularly where a number of the units are owned for the purposes of holiday lets) can be tracking down the owners and ensuring contributions are made. Unfortunately, whilst the Committee does have powers to sue in such cases, the costs of bringing legal action mean it is only really worth taking action where the outstanding sums are sufficiently serious to justify the costs of litigation.
It is in the interests of all unit owners in a building to ensure that their jointly owned areas remain maintained and in good repair. For this purpose jointly owned buildings can be registered with the Land Registry by application of the owners. The owners may then create Regulations to establish a Management Committee. Such Regulations should be created by a lawyer in accordance with the law and (broadly speaking) will give the Committee the power to control, maintain and insure the building. Each unit owner is responsible to contribute towards the expenses necessary for management of the building and his share is proportionate to the area of the unit he owns. In cases of non-contribution the Management Committee will have the power to take legal action to recover the outstanding sums which are due.
I am grateful to Louise for allowing me to reprint this and other articles; I urge all those thinking of buying or selling property in Cyprus to follow her sound advice.
Questions and answers
I receive many questions regarding maintenance charges, a selection of which I have included below.
Q. As I rent my apartment isn’t it my tenant who should be paying the maintenance charges?
A. No. As the buyer/owner of the apartment payment of the maintenance charges is your responsibility.
Q. I have an apartment on the ground floor, should I pay for maintaining the lift when I do not use it?
A. Yes. You are required to pay for maintaining all of the common facilities, including the lift, whether you make use of them or not.
Q. I only live in the apartment for three months of the year; shouldn’t my annual maintenance charges be reduced accordingly?
A. No. Regardless of how long you live in the apartment, you are required to pay the full annual amount.
Q. The developer promised that our communal swimming pool would be ready when we moved in; it isn’t. Can I withhold maintenance payments?
A. No. If the communal swimming pool was not ready as promised, why did you accept delivery?
Q. We have now got our Title Deeds and a Management Committee has been set up by people living in the flats permanently and they want everyone to pay the same amount. Can they do this?
A. No. The amount you pay is based on the size of your flat in relation to the others on the development. If your flat is 50m2 you should be paying half as much as someone with a 100m2 flat.
Q. I have a 2-bedroom flat with a separate dining room but am being asked to pay more than my friend in the same block who has a 3-bedroom flat. Is this correct?
A. See the answer to the previous question. The amount you pay is based on the relative size of your flat compared to the others in the development.
Q. I look after a small garden outside our block of flats. I’ve planted shrubs, made a stone path and bought a garden bench. I also do all the weeding and keep it looking nice. Am I entitled to a discount on my management fees?
A. I’m afraid not. But perhaps the Management Committee would agree to paying you for the plants, etc. you bought and your labour.
Q. Our developer gave four of the sixteen flats in our block to the original landowner in exchange for the land our flats are built on. Our developer has told us that the rest of us have to pay for their maintenance because the landowner refuses to pay him. Can he do this?
A. No. You only need to pay your share. It is up to the developer to pursue the landowner for payment. Suppose you were the only person in the block paying maintenance, would the developer expect you to pay for the other fifteen?
Q. We have just taken delivery of our apartment and have received a bill for maintenance. This has come as quite a shock to us as we didn’t know about maintenance payments. Do we have to pay?
A. Yes. It sounds as if your lawyer did not advise you correctly when you bought the apartment. He/she should have determined whether a Management Committee had been established and drawn up a contract for the payment of maintenance charges and insurance of the common areas.