Every communal building must have a management committee, which is elected in a general meeting of the owners of the units and constitutes a legally established entity responsible for the management and administration of the communal areas. The management committee (MC) has the rights, duties and powers provided in the Immovable Property Law, regulations which the owners may have drawn up and registered in the Land Registry or in the absence of such regulations, in accordance with the standard Regulations included in the relevant Annex of the Law. The MC acts for and on behalf of the owners, it is responsible to impose the Regulations and it should be duly established, act lawfully and apply the decisions of the general meetings. It has the duty to control, operate, manage and administer the communal ownership, which it must keep and maintain in good and operational condition to insure the communal premises and call a general meeting of the owners of the units at least once a year. Moreover, it has the right to establish and operate a fund, the balance of which must be sufficient to cover the management expenses. Furthermore, the MC has to define each owner’s share in the communal expenses and the method of its payment. In the event of failure of any owner to pay his share, the MC is entitled to recover such amount in the disbursements for repairs and other works carried out in the building or relate to its management through the filing of an action in court against the owner in question.
In buildings where no general meetings are called and the MC was not legally elected, an issue may be raised regarding its existence and legitimacy in the context of a dispute between the MC and the owner of a unit. The MC has the right to sue and be sued for any manner concerning the communal ownership. When the MC is non-existent, bringing an action in court on behalf of the MC is considered as abuse of process and the other party may challenge the MC’s and the dismissal of the action at the initial stage of the proceedings. Keeping minutes and recording decisions with full justification is necessary since this defeats any disputes or challenges to the legitimacy of the MC’s status and the amount of its necessary costs and disbursements. Where no MC has been appointed, the owners are obliged to pay their share in the common expenses to the vendor. In case a landlord agrees to let his property and the tenancy agreement provides that the tenant will be responsible to pay the common expenses, such a term does not bind the MC, to whom the landlord is accountable.
The legal aspect of the above issue has been examined in various court judgments; in such a judgment it was held that the method of calculation of the common expenses was inconsistent with the law, because the charge was not limited to the necessary expenses. It was held that there was a surplus and the MC’s action not to use it and continue imposing common expenses was not in line with the provisions of the law. It was pointed out that, since there is a surplus in the balance of the MC’s account, there could be no need to contribute further to the communal expenditure through the demand for the payment of further communal charges, since the surplus could be used to cover all or part of the necessary costs or to lead to the adjustment of the common expenses imposed by reducing the amount payable by each owner. In another case, the court held that the yearly amount claimed for common expenses and reserve was well above the share of the unit in the common ownership and therefore the MC did not prove its claim or justified the difference.
George Coucounis is a lawyer specialising in the Immovable Property Law, based in Larnaca, Tel: 24 818288, [email protected], www.coucounislaw.com