faqs for communal owners in cyprus

Communal ServicesLet us try and help you answer some of the most common questions. When it comes to communal charges, if you were to ask a group of people the following questions Im sure you would get a multitude of answers, and some very heated conversations. Fundamentally it is a good idea to start off with defining what communal services actually are.

3FAQs for Communal Areas

Kirsty & Lee Property Maintenance LTDwww.lee-ps.com

What are communal servicesfacilities?

As the majority of property owners bought properties off plan or on new developments, chances are your development will have a range of facilities just for the owners or tenants of that development. Some developments will have numerous facilities available to them whilst others will have very little. Your contract of sale is likely to state the purchaser and all the owners of the development have the right of usage of the common areas and in this capacity the purchaser acquires the rights and accepts the liabilities arising consequently and the purchaser is bound to pay his share as to the maintenance, cleaning, running and upkeep of the same.

Basically communal services are anything provided on your development which is available for use for all the owners, outside your boundary walls.

The most common services are:-

Swimming poolGarden

Private roadPrivate street/complex lighting

InsuranceLift maintenance & repair

Septic tanksRoof

Cleaning

Electric WaterLegal feesGym Toilets and Showers Tennis courtPlayground


www.lee-ps.comKirsty & Lee Property Maintenance LTD

Who is responsible for

paying communal fees?

Regardless of the property type your development is made up of, every property owner on the development is liable to pay their share of the fees. It is irrespective of whether you use the facilities provided or not. A classic misconception is I live on the ground floor, therefore I dont use the lift or electric to power it therefore I dont have to contribute towards this or I dont use the pool so Im not paying for it. This is incorrect, the facilities have been provided for the whole of the development, therefore you are liable for your share whether you use the facilities or not.

Another very common misconception that the property developer is liable to pay for the communal facilities for your development. They built these facilities at your development for your use and pleasure. If this is the case you could say the developer built the house so they are responsible for paining it 5 years down the line, we all know that this is absurd, consequently so is the notion that the developer is responsible for paying for your facilities. It is also worth bearing in mind that some of the facilities provided have been included to add value to your property and investment. Should you rent your property for holiday lets then the facility of a swimming pool is a must.

How much shouldI be paying?

The majority of property owners think they are paying too much in fees, this statement is probably true. If you are using a management company then chances are you are paying a much higher premium than necessary. It is worth getting quotes from a number of companies to determine if your premiums are fair. It is important to remember when obtaining a number of quotes to be asking for the same services for a like for like comparison. Although you have asked for a quotation asking for specific things, a professional company should provide you with extra information and things you should consider, in order to make sure you are compliant with the law.

It would be impossible to give a cash figure as every complex is different and has different needs.



How should the fees be calculated?A common myth is that property owners should pay their share based on the number of bedrooms their property has, or all pay the same as they all have use of the communal facilities. If as a committee you are happy to do this and have 100% compliance with payments and every owner is happy then this is acceptable. However should there come a time where you have an owner who is not paying, you will have no legal rights to pursue them for the unpaid amount. The legal way of correctly calculating the fees is by the percentage ownership. In projects with title deeds that is very easy to identify, as it is clearly written on the deeds. If no title deeds are issued the best way to calculate is by covered sqm. (Ideally the project architect when available and if they collaborate should identify that %)

What should be covered in the

fees?It is always a good idea to start with a list of the things you would like to be covered, for example I want the cleaning to be carried out 3 times a week in the summer and 2 times in the winter and the toilets to be cleaned daily. This is a good starting point but be prepared to compromise on some of the things in your list. A compromise could be lock the toilets and issue keys to property owners therefore they are not used and abused and will take less looking after. You will usually find that owners and paying tenants will look after the place they reside. In an ideal world Im sure every property owner would say that they want their communal areas to always be clean, however this is sometimes not feasible due to financial constraints.



The list below is generally what should be covered in the fees, it is always important to remember that each development is different and its needs will be different. A professional company should be more than willing to tailor the requirements of your development and provide you with a detailed quotation.

Swimming poolGarden

Private road Private street/complex lighting Insurance Roof Lift maintenance & repair Septic tanks

Toilets & ShowersCleaningElectric WaterLegal feesGymTennis courtPlayground

When planning a budget for the calculation of fees it is necessary to take into account short, medium and long term repairs. If you are a block of apartments, painting and repairing the cracks is usually the highest cost. What you need to do is look at the current state of the whole complex and write a list of repairs and a time scale of when the repair is likely to be needed, you can then work back from here in allocating a cost for this into your fees. Getting quotes for repairs is a good idea as it helps with a more accurate budget.



I only use my property

in the summer can I pay half of

the fees?The easy answer to this question is NO. The law doesnt take into account usage. Ask yourself this, do you go into a supermarket purchase potatoes and say well I dont use the skin so I dont want to pay for it? The same principles apply to your communal charges.

I rent my property, should my tenant pay the communal

fees?It is entirely at the discretion of the property owner. Some owners calculate the cost of their communal charges into the rental fee, while some make the tenant pay, this is sometimes a very complicated issue. We would always advise to calculate this fee into the charge of the rent and include this on the rental agreement. If an owner advertises their property at a lower rate to entice tenants, then asks the tenant to pay the communal fees as an extra, should they not pay the fees then the owner is liable.

Do we needa solicitor?

The easy answer to this question is YES. The advice and support of a good solicitor is a necessity. Legal fees are probably the most disregarded fees by property owners, however when it comes to the time when you need their services, especially due to unpaid fees, chances are you are i n financial difficulty and have no funds to pay. Having the finances in place for legal services from the outset will assist in a smoother transition. The law changes frequently therefore having someone working for you will ensure you are one step ahead. As a committee member the solicitor will make sure you are complying with the law. Your decisions as Im sure you will think will always be in the best interests of the development might not actually be the right decision. Another certainty is that some of the decisions you make will not please every property owner.



What if I dont agree with the

amount I am being asked to pay?

If you are using a professional management company they should always provide you with a breakdown of all the costs. A good starting point is to ask how the figure has been derived. Although sometimes even though you think the fee is high when you see the actual breakdown of what is included you may actually be getting a good quality package for your communal areas. Ask your committee why they have included certain items in the budget. Remember your committee carry out their roles free of charge for the good of the development and their investment. Try getting involved and helping out, many hands make light work. A development who works together and communicates well is destined for a harmonious future. If the committee is legally registered and all their procedures have been carried out according to the law then you are bound to pay the amount they are asking for. I have yet to meet any committee members asking to increase payments, they have your interests and pockets in mind at all times

I have paid my fees so why am I being

asked for more money for a lift repair?

This is a common mistake made by whoever has prepared your budget. Some companies will underestimate the costs and charges of running your development in order to secure the business. A professional reputable company will factor in a sinking fund for repairs and improvements.

The amount allocated to contingency in a budget depends on the nature of the project, but is usually between 5% and 25% of the total budget. When allocating a fund for a new project then the fees can be lower as it is likely that most of the work will be decorating and re fitting. The amount however is required to gradually increase over the next 5 to 7 years to ensure the fund can cover expenses for exterior repainting, replacement pool parts etc.



Is public liability insurance enough?

If you are asking the question, is public liability insurance enough to cover owners if someone has an accident? Then the answer is yes, provided you have enough cover. Many owners dont take into account insuring their communal areas, this includes the building. If you are an apartment owner on the top floor and the owner below you doesnt have any insurance, if the worst was to happen how will your property be rebuilt? Even though you have your own personal buildings insurance it is likely to only cover the internal walls and internal structure of your property, even if it covers your external walls, and the owner below has no insurance your property is not going to be rebuilt. It is a legal requirement to ensure the whole of your communal areas for fire, lightning and earthquake with a licensed underwriter, for the sum which the committee considers as corresponding to its replacement value.

Can the committee make me pay for

facilities I dont use?

Yes. The law does not take into account usage, the facilities have been provided for your use, its your decision not to use them.

Why should I register my committee?

We would always advise any committee to register and become a legal entity through a competent solicitor. As a committee member you are legally responsible for the decisions you make and the running of the complex. Owners and the authorities have the right to sue you through the courts of law, should they believe you have acted negligently, or not in the best interests of the complex.

FAQs for Communal Areas

10 www.lee-ps.comKirsty & Lee Property Maintenance LTD

How do we set up a committee?

As an owner of a property in a complex, under chapter 224 of the Cyprus Constitution with the amendments of 2011, it is your obligation and responsibility, but also your right, to participate in the formation of the Official Committee.

Ideally the best time to form the official committee is at the AGM.

All owners should be advised of the AGM in a timely manner in order for each owner to be able to attend and/ or appoint someone to represent them at the meeting. You should attempt (and have documented proof of your attempts) to contact each specific owner.

At the AGM, the first official item on the list should be the voting of the committee. Each property has 1 vote the votes should be cast in order to elect the committee.

Once the committee has been elected, then any other business should be discussed including the maintenance / management of the complex. The budget and any items needed.

You need a legal advisor for the enactment of the Committee and we are more than happy to provide you with the details of an esteem law office who has organized numerous enactments island wide.

When do we hold our AGM?

You should hold an AGM every year to discuss issues and the future for your development. As long as the meeting is held no later than 14 months after the previous years you are still within the parameters of the law. Everyone on the development needs to be informed along with an agreed agenda to follow. It is worth noting that those who have arrears can attend but do not have the right to vote for anything.

11



Can I become a committee

member?Yes provided you have been legally voted in. Being a committee member can be both rewarding and unsatisfying at the same time. A certainty is your decisions are not going to please everyone on the complex, as everyone has different ideas and beliefs of how they think things should be done. Also different owners will use the complex for different reasons, some will be for personal use while others are purely for investment purposes. Taking on a position within the committee is not something to be taken lightly. Also as previously stated as a committee member you are legally responsible for the decisions you make and the running of the complex. Owners and the authorities have the right to sue you through the courts of law, should they believe you have acted negligently, or not in the best interests of the complex.

What are my duties and

responsibilities as a committee

member?As a committee member you have an obligation to the complex and the other owners. You have to have make decisions on behalf of everyone for the good of the complex. The decisions you make have to be impartial and free from personal gain or finance. It is the committees job to control and manage the jointly owned areas. To keep the jointly owned areas in good condition. The committee need to arrange the appropriate insurance as set out by law for the jointly owned areas. The committee need to maintain a fund for day to day running and planned maintenance. To communicate with all owners and make informed unbiased decisions for which you have sound and logical reasons.

12



Can I be paid for the time for carrying

out committeeduties?

No, the time you spend performing your committee duties are unpaid. This is a voluntary position, so before you commit to being involved please make sure that you have the time to contribute to your duties. As stated previously you are liable by the courts of law should other owners or organisations think you have acted negligently or not in the best interests of the complex.

Can a committee member be

responsible for servicing the

complex?No. As a committee member you need to make unbiased and impartial decisions for the good of all the owners. If a decision made by the committee affects you personally and your finances, the possibility of you reaching an impartial decision is going to be compromised. Being on the committee and servicing the complex is a conflict of interest, therefore you are not able to perform your duties as a committee member by being unprejudiced.

Who can the committee employ

to carry out maintenance and

cleaning?The committee can employ anyone to service the complex, provided they are a legally registered company or employee in Cyprus. For example if you employ a friend to clean the complex or look after the pool, you are liable for employing an illegal worker. This carries a custodial sentence so you need to be very careful who you employ.

13



Can I get a quote to see if my fees are

reasonable?Any owner of a property on a complex is entitled to ask for a quotation for the complex. As a committee member it is their responsibility to ensure they are providing the best possible services and facilities for the complex. This doesnt necessarily mean accepting the lowest quotation. Yes cost and finances are a major factor in deciding who will service the complex, however you need to be taking into account that all the legal requirements are followed. Presuming the committee has asked for a quote with all the legal requirements and any extras for the complex, when asking for an individual quote you should be asking for the exact same services for a like for like comparison.

What do you need in order to provide a

quote?Providing a quotation for a complex is not as easy as you would think. As each complex is different and will have different needs there are many things to take into consideration. For example for an accurate and legal insurance quote the company will require the year of construction, covered square meters and any special facilities or problems that the complex has which need to be included. In order for anyone to provide you with a comprehensive and accurate as possible quote it would be helpful if you had historical data of utility bills, the covered square meters of each individual property, to know if you are connected to the main drains and knowledge of any reoccurring issues/costs the complex has. By providing as much information as possible will help any organisation to be able to compile an accurate and comprehensive figure for your complex.

This guide has been written to help answer the most common questions asked when it comes to communal areas and fees. Should you require any further help or information or would like a free no obligation quote for your complex then please feel free to contact a member of our team who will be willing to help you.

Email: [email protected]

LE

E P

RO

PE

RT

Y S

ER

VIC

ES L E

E P

RO

PE

RT

Y S

ER

VIC

ES

faqs for communal owners in cyprus

Documents