Frequently Asked Questions on Property Management and Sales

Many people buying property in Cyprus are unaware of how they are managed and their obligations. Louise Zambartas explains.

Every apartment building contains 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 in the Land Register. 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 application submitted by the owner of the building. Theowner 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; and
• 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.

Non-Contribution

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.

Conclusion

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.

Article by: Louise Zambartas, L.G. Zambartas LLC (Visit website)