Large-scale projects and the ‘curse’ of com­mon ex­penses

Financial Mirror (Cyprus) - - FRONT PAGE -

The in­dus­try’s ef­forts to mod­ernise the law on com­mon ex­penses dates back a good decade. We have sub­mit­ted our views to suc­ces­sive min­is­ters about the prob­lems as­so­ci­ated with the com­mon ex­penses laws and also raised the sub­ject in par­lia­ment, when An­dreas Chris­tou chaired the com­mit­tee, with the only ob­jec­tion com­ing from the Land Reg­istry.

The of­fi­cer in charge at the Land Reg­istry even went on to write a ‘hand­book’ after his re­tire­ment, one that re­mains in­com­pre­hen­si­ble even to­day. As the law stands to­day, it can­not be prop­erly im­ple­mented and pun­ishes the reg­u­lar con­trib­u­tors who are forced to pay for the bad pay­ers, as a re­sult of which build­ing suf­fer from poor main­te­nance. At present, the law says: - There should be a man­age­ment com­mit­tee reg­is­tered with the Land Reg­istry. How­ever, the reg­istry it­self says that this is not nec­es­sary and a sim­ple de­ci­sion of the gen­eral meet­ing of ten­ants is suf­fi­cient, with­out hav­ing to reg­is­ter the man­age­ment com­mit­tee it­self. So, who is right?

- The law fur­ther states that if some­one fails to pay com­mon ex­penses, the rest (reg­u­lar con­trib­u­tors) should pay the bal­ance and seek le­gal re­course. This is the worst pos­si­ble leg­is­la­tion for reg­u­lar con­trib­u­tors as it it af­fects them morally and fi­nan­cially, who will also have to cough up le­gal and court fees, while the black sheep of the build­ing con­tin­ues to en­joy the ben­e­fits of pub­lic ser­vices free of charge, un­til such time as a court rules on the mat­ter. In ad­di­tion, if cur­rent ten­ants sell their home or unit to a third party, how will they ever re­coup the ex­penses they have paid for, as well as le­gal fees for cases that could drag on for 2-4 years?

- The mat­ter gets more com­pli­cated in the case of largescale projects, pri­mar­ily with for­eign buy­ers who were at­tracted to Cyprus ei­ther for in­vest­ments or for pass­ports and visas, who will in about 3-4 years have to face th­ese prob­lems, be­cause it is a com­mon phe­nom­e­non both among lo­cals and for­eign­ers as well.

- This will re­sult in re­ac­tion from mainly new for­eign buy­ers and could lead to fresh pres­sure, sim­i­lar to what hap­pened by the Prop­erty Ac­tion Group that re­ported the Cyprus govern­ment to the EU courts over the bo­gus ti­tle deeds scams and could start a new cat­a­strophic cy­cle for the mar­ket, es­pe­cially after all the hard work by some of us to at­tract high-in­come for­eign in­vestors. For us, the sys­tem is frag­ile and short-sighted, de­spite all the warn­ings about the cur­rent sit­u­a­tion.

The ar­gu­ments we raised some ten years ago are valid, even to­day:

- The man­age­ment com­mit­tee must be reg­is­tered at the Land Reg­istry with the rel­e­vant le­gal sta­tus of any le­gal en­tity.

- Non-pay­ment of com­mon ex­penses should be no­ti­fied onto a pub­lic reg­istry and onto the in­for­ma­tion net­work of the project ie. to use the “name and shame” method.

- Prior to any rental, trans­fer, mort­gage, the owner or cur­rent ten­ant must present a cer­tifi­cate or proof from the man­age­ment com­mit­tee to be ad­dressed to the in­com­ing ten­ant that there are no other dues owed to third par­ties.

- It should be stated that the law­fully re­spon­si­ble per­son is the owner/buyer and not the ten­ant and car­ries the rel­e­vant re­spon­si­bil­ity re­gard­less of what is said in the con­tract.

- Un­til past dues are set­tled, and based on a man­age­ment com­mit­tee de­ci­sion, the owner/buyer can­not use pub­lic ar­eas or ser­vices, eg. com­mon heat­ing/cooling, el­e­va­tor, pub­lic pool, etc.

- The man­age­ment com­mit­tee should be more pro­fes­sional and should be paid for their ser­vices, and no vol­un­teer to do it free of charge, as is the case now. This way, a proper man­ager or ad­min­is­tra­tor will be hired who is a pro­fes­sional and who will have the en­ergy and rea­son to do the job.

- Any­one who wants to chal­lenge the com­mon ex­penses fees should pay first and claim later, hav­ing the right to sue the man­age­ment com­mit­tee or even the ad­min­is­tra­tor, in other words the ex­act op­po­site of what hap­pens to­day.

In or­der not to over­load the courts with such dis­putes, th­ese should be re­ferred to an ar­bi­tra­tor whose de­ci­sion will be bind­ing for all par­ties. Such ar­bi­tra­tors are now pub­licly avail­able through the lo­cal cham­bers of com­merce or the tech­ni­cal cham­ber ETEK.

Such is­sues un­for­tu­nately cause se­ri­ous prob­lems to small com­mu­ni­ties and we will soon be faced with a fresh round of bad press if the mat­ter is not re­solved prop­erly.

In pre­vi­ous col­umns, I re­ferred to the “curse of com­mon ex­penses” which is no ex­ag­ger­a­tion and I be­lieve the In­te­rior Min­is­ter him­self should take the mater very se­ri­ously be­fore it grows out of pro­por­tion or blows up in our face, as has hap­pened in the past.

Newspapers in English

Newspapers from Cyprus

© PressReader. All rights reserved.