By Eleni Philippou
The urban landscape has undoubtedly changed in Cyprus over the last 30 years. Previously, strewn with mostly individual or semi-detached houses, it is now bursting with apartment buildings, developments or complexes of houses, villas or maisonettes (or any combination of these).
Nearly all such developments include shared spaces and facilities for the owners and residents, and many times the management of such “shared” or “communal” areas is the cause of distress for the owners. A complex with communal areas may sometimes be referred to as being “horizontally divided” and this essentially means that the properties which are part of such a complex are fundamentally linked together.
“Communal Areas” are those parts on buildings, developments or complexes which are used by all the owners, and these are areas which do not belong to any one owner specifically. Communal areas can differ depending on the complex and may be swimming pools, roofs, stairwells, gardens, parking areas, private roads, etc.
To shed some light into the rules which apply, below is a list of 10 things which owners of property on residential complexes with communal areas should be aware of:
1.The communal areas of a complex are shown on the architectural plans which are prepared at the onset and are submitted to the authorities to receive construction permission. The developer who constructs the complex will submit the approved architectural plans and the relevant construction permission to the Land Registry, with the communal areas clearly identified so that the Land Registry may register these.
Provided that the construction permission is adhered to, the usual process is that the Land Registry will issue the separate title deeds of each housing unit on a complex, and these title deeds will also include the percentage of ownership of the communal areas which belongs to the said unit. The communal areas themselves will be numbered by the Land Registry and will be identified at the Land Registry “file plans”.
2. The developer constructing the complex, may (before the issuing of the separate title deeds for each housing unit on the complex) attach specific rights of exclusive use of a certain area to one specific property. For example, apartment 104 may have the exclusive use of the parking area number 14. This means that the said parking space will not form part of the communal areas, and it will belong exclusively to the nominated apartment. This can apply to parking spaces, storage areas, parts of the roof (roof gardens), etc. Very often disputes arise with regards to parking spaces and the use of these in complexes. Putting it simply, if a parking space has not been clearly allocated for the exclusive use of any one particular property on the complex, it is part of the communal areas and can be used as such by any of the owners.
3. Complexes with communal areas must have a Management Committee (MC) formed by the owners and the MC is responsible to oversee the maintenance and proper upkeep of the communal areas and to have third party liability insurance coverage for the communal areas. This is particularly important for complexes with swimming pools. The obligation to form a MC is irrespective of whether the owners reside at the complex, and irrespective of the level of “engagement” which the owners wish to have in the maintenance of the complex. The MC can decide how “active” they wish to be in the process of the maintenance and upkeep of the communal areas. For example, some MCs who are very active may deal with all the maintenance of the communal areas directly by hiring individuals or companies to deal with individual tasks (e.g. pool cleaning, gardening, etc) and this requires monitoring
Other MCs choose to be less “active” and they hire a management company to deal with all the maintenance of the communal areas for them with services being listed and outlined in a contract. There are however decisions to be made by a MC which cannot be delegated to a management company and an MC must be formed in any case.
4. The MC is a legal body and as such it can sue and be sued.
5. The MC must keep books and accounts, and these can be inspected by the owners should they require.
6. The law provides a set of regulations to govern the running and management of complexes with communal areas and these are the regulations which MCs most frequently use. If the owners on a complex wish to have their own regulations which differ from the model regulations provided in the law, this can be done provided that the due process is followed, and the appropriate consensus of the owners is achieved.
7. The owners of properties on complexes have voting rights in accordance with their percentage of ownership of the communal areas. The percentage of ownership is mentioned on each individual property title deed when this is issued by the land registry.
8. All the owners of properties on the complex, who have rights over the communal areas, are required by law to pay their share of the cost for the maintenance and upkeep of the communal areas. The amount required by owners to pay for the maintenance of the communal areas is usually known as “common expenses” or “communal fees”. Common expenses must be worked out for each owner based on each owner’s percentage of ownership of the communal areas as mentioned in his individual property title deed.
9. Non-paying owners can be sued by the MC, and they also lose their right to vote at general meetings of the owners.
10. There can be no changes done to the communal areas or to individual properties on complexes, which would change the approved architectural plans of the complex with regards to the appearance of the individual properties or the communal areas unless there is consensus by all the owners. For example, no owner can “close in” any balcony, build a garage, build an extension to his own property, etc unless 100 per cent of the owners have approved it and provided that the zoning and other conditions also allow it. For any such change there will need to be an application to the authorities for the necessary construction permissions. Owners can proceed with internal changes to their properties provided that they do not increase the covered area of their unit and also provided that they do not interfere with the structural integrity of the building (e.g. removal of pillars etc).
Unfortunately, there is no legal obligation for an owner who sells his property on a complex to submit proof of settlement of common expenses before being allowed to dispose of his property. It has been left in the hands of those buyers and their lawyers who are diligent enough to request and require such proof of settlement. In other cases, a buyer may be very unpleasantly surprised to find that he purchased property for which common expenses were never settled or for which there may be an outstanding dispute.
Undoubtedly, a properly maintained complex bestows value to the housing units which form part of it and for this to happen, all the owners must pay their fair share of the cost for the upkeep. In September 2023, a much-awaited bill was submitted to the House of Representatives, which aims to regulate the administration of communal areas. The new legislation when it is enacted will be a great weapon in the arsenal of Management Committees to enable them to properly maintain complexes and to ensure that all owners are consistent with the payments of common expenses. Based on the bill, proof of settlement of common expenses will be added to the other taxes and clearances which a seller must submit to the Land Registry in order for a sale and transfer of ownership to succeed.
Eleni Philippou (LLB, LLM, TEP) is a partner at Polycarpos Philippou & Associates LLC www.philippoulaw.com
