Anyone who watched a Place in the Sun on Wednesday will have seen a woman who was viewing a holiday apartment in Cyprus break down in tears of joy.
The one-bedroom apartment had a sea view, with a communal pool and a balcony, close to amenities and a beach; everything that she and her husband had been looking for.
After some negotiation, the couple had their offer accepted and purchased the apartment.
But I expect, like so many others who have bought an apartment in Cyprus, she and her husband didn’t realise the problems they may face.
Apartments and other residential complexes with shared facilities comprising more than four units are required by law to have a Management Committee that regulates and manages all relevant affairs.
The owners of all units in these complexes must contribute to the costs of insuring, maintaining, repairing, restoring and managing the jointly-owned building. These contributions are known colloquially as communal fees.
On the face of it this is a very good idea and works well in other countries. Communal fees are used ensure that the building and its shared facilities such as swimming pools, gardens and tennis courts are maintained in good order thereby helping to maintain their look, value and the saleability of the units.
However, the law in Cyprus is unworkable. All too often problems arise as owners refuse to pay their communal fees. This problem is likely to get worse due to the pandemic as many people will have lost their jobs or are experiencing a severe drop in their income.
In cases where owners refuse to pay, the Management Committee has to cover the shortfall by raising the fees of the good payers to cover the shortfall. This causes resentment and often leads to a domino effect as more owners refuse to pay. Eventually the Management Committee resigns en masse and the buildings fall into disrepair and decay.
The only option open to the Management Committee is to sue the non-payers. This will cost in the region of €1,500 for legal fees and court costs – another expense that has to be covered by raising the fees of the good payers. In normal circumstances it takes 2, 3 or 4 years to get a court ruling against the non-payer.
The non-payer can claim they have no money and agree a long-term payment arrangement. This may delay payment for a further 2 or 3 years and if non-payer fails to comply with the payment arrangement, it’s back to the court with another €1,500 in legal fees and court costs, with no resolution of the problem.
The court may also rule against the non-payer by enabling the Management Committee to lodge a memorandum (memo) against properties owned by the non-payer for the debt. (This assumes that the debtor has title to the property – unacceptable delays issuing Title Deeds is another long-standing problem that has yet to be resolved.)
The memo prevents the non-payer selling, mortgaging and transferring the property until the debt has been repaid.
In these circumstances a memo is as much use as a third eyebrow as the debt will not be repaid in the foreseeable future.
Furthermore, a memo only remains in force for six years from the date that the judgement was registered with the Land Registry. It may be extended by two years each time by further court orders (and their associated costs.)
The law must be changed to protect the good owner who continue to pay and the Management Committee. Why should who are paying be forced to pay for those who refuse?
Apartment swimming pools
Under the laws of Cyprus, swimming pools in apartment and other residential complexes are considered to be “public swimming pools” and their operation is governed by the stringent laws and regulations governing their licensing and use. (The law dates to 1992 and is well past its sell by date.)
This has significant legal and financial implications for the Management Committees and the owners of these complexes.
Regardless of the size of the pool or the number of units on the complex, a lifeguard must be on hand when the pool is in use. To achieve this level of cover, it’s likely that two lifeguards would be needed at a cost in the region of €30,000/annum. Some larger complexes have two and occasionally three pools, each needing two lifeguards and their cost would be astronomical. (In reality there are not enough trained lifeguards in Cyprus to service the demand.)
To operate these pools an annual operating licence is required, which costs around €85 – and the pool equipment needs to be checked to ensure it meets safety requirements – another cost.
Anyone operating a pool without a licence or who acts contrary to the regulations, which includes lifeguarding, is guilty of a criminal offence. The offender faces a fine of up to €450 and, if the offence continues after conviction, they face an additional fine of €50/day for each day the offence continues.
In the past, authorities have turned a blind eye to the problem, which resulted in many pools being operated without a licence. But a couple of years ago the authorities in Paphos cracked-down; the municipality’s health inspectors discovered more than 170 swimming pools operating without a licence and served owners and tenants of these apartments with notices stating they were operating public swimming pools without licenses.
Management Committees had no option but to close their pools or face the consequences.
Together with Denis O’Hare and Linda Leblanc I brought this issue up at a meeting we had with the Interior Ministry in 2007. In 2011 MEP Arlene McCarthy raised the problem with the European Commission. And although new law was proposed in 2015, no progress has been made.
Complexes that share a pool for the use of the property owners, their families and guests are classed as Type 3 swimming pools, making it subject to different standards than a public swimming pool and would therefore not require lifeguards, etc.
However, for reasons best known to themselves, the Cyprus government has not implemented these EU regulations that would remove the need for lifeguards at a stroke.
I hope the couple who featured in A Place in the Sun and bought the one-bed apartment manage to avoid the problems with the inadequate and archaic laws and regulations governing communal fees and swimming pools. They’ll soon find out for themselves.