Tackling the common expenses law

The publication of the proposed new law on common charges is encouraging, not so much because of the content of the proposal, but more so because of the interest shown by the law commissioner.

The existing law is unacceptable and unworkable and the two previous proposals failed without much debate in parliament, despite several positive provisions in the proposals.

The commissioner’s interest is therefore very positive and especially her invitation to interested parties to submit comments and proposals to her.

Here are just some of our thoughts on the proposal:

• The competent authority is to issue building permits. This means the municipalities or district offices. Neither have the appropriate knowledge or capacity to manage such matters and would need increased financial resources in order to deal with the thousands of applications.

At the same time, knowing our municipalities, councillors and mayors it will be difficult to overcome the private interests and people using their connections, in other words the corruption present in various sectors.

• A new authority is needed, unfortunately, to look into common property issues, with offices in all towns where the interested parties can refer to.
• Disputes are to be handled by the local courts. But as things stand today, with the unacceptable delays in the judicial sector, how will it cope? A simple case involving €500, would take two to four years to be heard.

Mediation would be a good option. Mediators should be technicians from the technical chamber and involve lawyers and others in the tenancy dispute models and so on.

The state has not adopted a small claims court system, despite such systems existing in other countries, for example the UK has magistrates and the US small courts with summary proceedings, whose judgments are final with no right of appeal.

• Reference is made to units which do not have titles. They should hold all necessary certificates, such as a subdivision permit, final certificate of approval and so on. If not where will these units be classified?
• We wonder which owner will be interested in taking over management of the common expenses when they will be liable to be sued for whatever the owners believe he has done wrong?
• In addition to the need to issue a certificate of common charges payment for the purposes of unit transfer and mortgaging, a condition should be included that no transfer of property be permitted if the owner owes common charges, similarly nor for rent.
• Concerning insuring a jointly owned building, there is the issue of uninsured building costs, and I have reservations about the sale of remaining unutilised development rights that need to be discussed.
• The debtor (owner) must pay the utilities as stated in the audited accounts, whether or not they agree, but with the possibility of being corrected by the court (just the opposite of what is currently the case).
• The common law should include alterations to appearance performed without the permission of the administrative committee and the possibility of a unilateral court order for reinstatement.
• On the issue of cutting off access to non-payers, although the need is understood, we wonder how it will be implemented.

These are some of the initial points the Commissioner should look into and arrange meetings with interested parties now, before the proposed legislation goes ahead.  To this end, we look forward to the involvement of developers, estate agents, the landlords and property owners association, both to be informed about the law and to improve it.

Antonis Loizou & Associates EPE – Real Estate Valuers, Estate Agents & Property Consultants, www.aloizou.com.cy, [email protected]