Since Autumn 2010, Condominiums from all over Ukraine demanded to solve the whole bunch of problems, faced by people which took responsibility for maintaining own houses. After Instruction of the President the Government elaborated the bill No.8474 “On making amendments to some laws on Condominiums.” After a year of “promenade” in the Cabinet of Ministers and the Verkhovna Rada, numerous attempts to distort it, on 15 March 2012 by roll-call vote the bill was adopted in the second reading and as a whole. Fortunately, public activists’ fight proved to be worthy – people’s deputies rejected the most “harmful” amendments for Condominiums and adopted a number of norms which will simplify life of Condominium residents.
The forced division of owners in the apartment building with created Condominium on competent “members” and not competent “not members” was nullified with removing the category of membership in Condominium. From now on all decisions in multi apartment building will be taken by co-owners. A membership in Condominium was earlier separate from the ownership of the apartment (nonresidential premise) in the building. Therefore, co-owner could be a member of Condominium in his house or not. Relations between co-owner often had certain tension because of this. From one side, co-owners which are not members of Condominium, groundlessly considered that all decisions taken by Condominium have nothing to do with them, and from the other - there are many cases when Condominium administration unlawfully refused to take co-owner into a membership of Condominium or demanded a huge entrance fee, and deprived the possibility to participate in general meetings and influence taking decisions in Condominium.
The order of Condominium creation hasn’t changed. The document provides, that “constituent assemblies of the association in newly-build apartment houses shall be convened after receiving title documents by most owners of residential and non-residential premises. Such norm will allow to avoid conflict situations, when the developer deliberately didn’t issue the certificate on ownership to investors, till the creation of "side-pocket" Condominiums formed by firstly controlled owners (often - relatives).
The Law allows creation of one Condominium for some houses. The competence of meetings and results of voting in such Condominiums are determined separately for every building.
It’s quite difficult to gather a quorum on general meetings in big houses. To solve this problem it was decided, that when quorum for taking decision is absent, the administration can decide to conduct the written inquiry of co-owners.
The bill is to solve another existing problem. Despite many premises in buildings already have their legal owners (the state or territorial community owns only not privatized apartments), buildings are mostly on the balance of communal enterprises which provide services to them. Moreover, most of local governments groundlessly consider themselves to be owners of such houses and rule not their property at their own discretion – sell or rent basements, lofts etc. In order to rule a building, the Condominium had to “take it on a balance” before (in fact – on off-balance account), and couldn’t formally maintain the building before that. As a result, some local government bodies or communal enterprises in every way try to prevent or postpone the transfer of a house to the balance of Condominium.
The bill 8474 solves the problem of “balance-keeping”. “Balance-keeping” was substituted by more appropriate term for Condominiums “building management” and provided, that from the moment of state registration the maintenance of common property in multi-apartment building is to be made through own administrative bodies. Local government shall pass all technical documentation of multi-apartment building, including the act of putting into operation, technical passport and systems engineering plans during three months from the date of state registration of association.
It also provides, that by the decision of general meeting common property management functions may be fully or partly passed to a building manager or association. The form of management may be changed at anytime by the decision of general meeting.
The absence of concurrent organizations between service providers and a low payment discipline of customers result in attempts of authorities and enterprises-monopolists to give Condominiums responsibilities of actual service providers, including recognition of Condominiums to be performer of certain housing and communal services through courts. At the same time they don’t take into account that Condominiums are not a subject of housing service, are not consumers of housing and communal services as legal entity, and a fund of Condominiums is formed by the means of membership dues of co-owners – consumers.
Due to the lack of competitive environment between service performers and low payment discipline of customers, the authorities and enterprises-monopolists are trying to shift responsibilities of actual service providers to Condominiums
Consumers in buildings without Condominium are in more favorable situation compared to those with created Condominium. They have to pay fines for delayed payments, in buildings with Condominiums enterprises-monopolists stop providing services to all consumers, not only to debtors etc. In some cities the social security agencies refuse to reimburse subsidies and privileges, till Condominium approve the amount of contributions and payments for maintenance and local area, determined on a general meeting.
Thanks to the adopted Law these problems will be solved now. Firstly, Condominiums gain a right to choose a building manager or performers of certain housing and communal services, which will sign corresponding agreements with all co-owners. Secondly, it’s clearly defined that the association pays for cold and hot water, heat and electricity, gas, communal services and maintenance services for buildings by prices (tariffs) set for the population.
In order to give citizens preferences and calculating the amount of subsidies for housing and communal services, building and surrounding area maintenance, water supply and drainage, gas and power supply, heating, household waste removal, the amount of payment is determined by fees and charges paid by owners to association for such purposes.
There is also certain progress in solution of “the land issue” for Condominiums. Only 5% of Condominiums of Ukraine got a land of the apartment building into ownership. Some Condominiums which prepared all the necessary documentation for land allocation for own costs were proposed by local governments to take the land onlease. From now on, Condominiums will get land under the building, adjoining constructions, buildings and the surrounding area into ownership or permanent use of condominium by the petition of supreme governing body of association without any ayments.
Of course, the new Law wouldn’t solve all the problems of Condominiums – it’s also necessary to change some subordinate regulations, to amend other laws (one of the most urgent unsolved issues remains the access to the information about co-owners of a building), but the most important – is practical implementation.
What will eventually sign the President?
Text of the law was changed many times in the process of its preparation despite regulations of the Verkhovna Rada; there were at least two different variants of the bill during the voting in the session hall, and a content of informational notification on VRU site does not comply with shorthand notes of the meeting and voting records. That’s why we have all grounds to worry about preservation of wording supported by people’s deputies.
First of all, we are talking about the amendment No.48 of the deputy Mayboroda which says, that “if the governing body of association didn’t receive appeals from co-owners during two weeks after promulgation of decision taken on general meeting, such decision shall be considered adopted with the consent of all co-owners.” This proposition is unreasonable and inapprehensible for application, and could provoke blocking of all taken decisions in Condominiums. Because Condominiums are created for taking decision without the consent of all owners, what would be impossible according to this amendment. Fortunately, it was put twice for voting and wasn’t supported.
Another amendment No.52 of deputy Mayboroda wasn’t supported neither on the first nor on the second attempt, which proposed to keep the actual problem of transfer of a house to the balance of Condominium. Although the term “balance keeping” was removed, “the transference of a building into management” should be done in accordance with “the order, determined by the Cabinet of Ministers of Ukraine.” It virtually preserved the old problem and again put Condominiums in dependence of somebody willing to “transfer the building into management” or not. Therefore, it’s good this amendment also wasn’t supported.
As a result, Ukraine received a new, rather good law on Condominiums. However, the final decision is up to the President.
The publication is prepared within the project of the Civil Network OPORA “Housing reform in Ukraine: viewpoint of public” assisted by the Renaissance international foundation specially for the magazine “Housing and communal services of Ukraine.”