Communal fees are an essential part of owning an apartment or other unit in a jointly owned building in Cyprus.
They cover the expenses required to maintain, insure and manage the common areas and facilities of the development. However, one of the most common sources of disagreement between owners and Management Committees is a simple question:
How should communal fees actually be divided between owners?
The answer is important because, under Cyprus law, communal expenses are not necessarily divided equally between all apartments.
What Does Cyprus Law Say?
The principal legal framework is found in Part IIA of the Immovable Property (Tenure, Registration and Valuation) Law, Cap. 224.
Under Section 38IA, all owners of units in a jointly owned building must contribute towards expenses that are necessary for the:
- insurance of the jointly owned property;
- maintenance of common property;
- repairs and restoration;
- management of the development; and
- provision of services required by law or by the building’s Regulations.
The same provision states that each owner’s share of those expenses is determined by the applicable Regulations on the basis of the area of each unit. (CyLaw)
This means that simply dividing every communal bill equally by the number of apartments may not comply with the legal method applicable to the building.
Are Communal Fees Divided Equally?
Not necessarily.
Imagine a building containing ten apartments.
If some apartments are significantly larger than others, charging every owner exactly 10% of the communal expenses may not reflect the method prescribed by the legislation and Regulations.
Instead, the contribution percentage is generally linked to the area attributed to each unit.
As a result, an owner of a larger unit may pay a higher proportion of the common expenses than the owner of a smaller unit.
What Is Included in the Area of a Unit?
Section 38H of Cap. 224 provides important guidance on how the area of a unit is determined.
The area includes the covered space enclosed by the external walls of the unit and also includes covered and uncovered verandas and balconies.
Where walls are shared between units, or between a unit and jointly owned property, the area of those walls is apportioned as provided by law.
The area of the unit must also be stated on the unit’s certificate of registration. (CyLaw)
This is important because the communal-expense calculation should be based on recognised unit areas rather than informal estimates.
A Simple Example
Consider a small residential building containing four units:
- Apartment A: 80 m²
- Apartment B: 100 m²
- Apartment C: 100 m²
- Apartment D: 120 m²
The total area of all units is 400 m².
Their illustrative contribution percentages would therefore be:
- Apartment A: 20%
- Apartment B: 25%
- Apartment C: 25%
- Apartment D: 30%
If the building’s annual common expenses were €10,000, the corresponding illustrative contributions would be:
- Apartment A: €2,000
- Apartment B: €2,500
- Apartment C: €2,500
- Apartment D: €3,000
This example is simplified for explanatory purposes. The actual percentages applicable to a particular building should be established from its registered details and Regulations.
What Expenses Can Be Included?
Communal expenses can cover a wide range of costs associated with the jointly owned property.
Depending on the development, these may include:
- cleaning of common areas;
- electricity for corridors and external areas;
- communal water consumption;
- lift servicing and repairs;
- building insurance;
- swimming-pool maintenance;
- garden maintenance;
- pest control;
- gate and access systems;
- plumbing and electrical repairs;
- roof maintenance;
- exterior repairs and painting;
- administration and property-management costs; and
- other necessary expenses relating to the jointly owned property.
The standard framework published under Cap. 224 includes categories such as common-area cleaning, lift maintenance, common electricity and water, insurance and general repairs. (CyLaw)
What Role Do the Building Regulations Play?
The Regulations of the jointly owned building are particularly important.
They regulate the relationship between owners, determine their rights and obligations, and may make provision for the control, administration, management and use of jointly owned property.
The Department of Lands and Surveys confirms that where a building does not have separately prepared and registered Regulations, the standard Regulations apply. (DLS Portal)
Management Committees should therefore establish which Regulations apply before determining how communal charges are allocated.
Can Owners Agree to a Different Calculation?
This is an area where Management Committees should exercise caution.
A group of owners should not simply adopt an informal calculation method without considering the legislation and the registered Regulations applicable to the building.
If owners wish to amend the Regulations of a jointly owned building, the proper legal procedure must be followed.
According to the Department of Lands and Surveys, Regulations submitted for registration are considered valid when approved by owners representing at least 75% of the jointly owned property, subject to the applicable statutory requirements. (DLS Portal)
A Management Committee should therefore avoid changing contribution percentages merely by informal agreement or convenience without first confirming that the proposed arrangement is legally valid.
Can Ground-Floor Owners Refuse to Pay for the Lift?
This is a common question.
A ground-floor owner may argue that they never use the lift and should therefore not contribute towards its maintenance.
However, personal use of a communal facility is not necessarily the deciding factor.
Communal contributions arise from ownership within the jointly owned building and must be determined according to the legislation and the applicable Regulations.
The same issue can arise with facilities such as swimming pools, gardens, gates and other common areas.
Owners should therefore not assume that choosing not to use a facility automatically removes their obligation to contribute towards its expenses.
The specific Regulations of the building should always be examined where there is a dispute.
What About a Swimming Pool?
A communal swimming pool can create significant annual expenses, including:
- electricity;
- water;
- chemicals;
- cleaning;
- filtration equipment;
- servicing;
- repairs;
- safety equipment; and
- professional maintenance.
Where the swimming pool forms part of the jointly owned property, its legitimate maintenance and operating expenses may form part of the common expenses of the development, subject to the legal status of the pool and the applicable Regulations.
An owner should therefore not automatically assume that they can refuse to contribute simply because they personally do not use the swimming pool.
What About Shops in a Mixed-Use Building?
Mixed-use developments can be more complicated.
A development may contain apartments, offices and shops, while certain parts of the property may primarily serve only particular units.
Cap. 224 also recognises situations involving separate buildings, wings or building complexes situated on the same parcel, and provides mechanisms through which parts of the jointly owned property may be treated separately in appropriate circumstances. (CyLaw)
For mixed-use or structurally complicated developments, the registered Regulations and title information should therefore be examined carefully before calculating charges.
Can the Management Committee Charge a Reserve Fund?
A Management Committee should not think only about this month’s bills.
Buildings eventually require major works.
These may include:
- replacement of a lift;
- roof waterproofing;
- major façade repairs;
- swimming-pool refurbishment;
- replacement of pumps;
- major plumbing works;
- repainting;
- replacement of gates; or
- repairs to communal electrical installations.
Building up an appropriate fund can help avoid situations where owners suddenly receive a very large demand for payment when major repairs become necessary.
The amounts collected should be properly accounted for and used for the purposes of managing and maintaining the jointly owned property.
Should Owners Receive a Breakdown of Expenses?
Good management requires transparency.
Owners should be able to understand:
- what the annual budget is;
- how their contribution was calculated;
- what expenses have been paid;
- what money remains available;
- whether there are unpaid communal fees; and
- whether money is being reserved for future works.
A professional Management Committee should therefore maintain clear accounts and supporting documentation.
This benefits both the Committee and the owners.
If an owner challenges a communal charge, the Committee should be able to explain both the calculation method and the underlying expenses.
Why Equal Charges Can Create Problems
Dividing expenses equally may appear easier.
For example, if a development has 20 apartments and annual expenses of €24,000, the simplest calculation would be €1,200 per apartment.
However, if the apartments vary substantially in size and the applicable legal method requires contributions to be calculated by reference to unit area, that equal division may not be appropriate.
The convenience of a calculation does not necessarily make it the correct calculation.
Management Committees should therefore establish the proper contribution percentages and use them consistently.
What Should a New Management Committee Do?
A newly appointed Committee should review the communal-expense system as one of its first tasks.
It should identify:
- the units forming part of the jointly owned building;
- the recognised area of each unit;
- the applicable registered or standard Regulations;
- the contribution percentage attributed to each unit;
- the annual operating budget;
- existing debts and unpaid communal fees; and
- any expected major expenditure.
Once this information has been established, the Committee can prepare a clear communal-expense schedule for the owners.
Keep the Calculation Consistent
Consistency is essential.
A Management Committee should avoid applying one calculation method to certain owners and another method to others without a proper legal basis.
Contribution percentages should be documented and applied consistently.
Whenever the building’s circumstances change, or where there is uncertainty regarding the correct allocation, the Committee should review the title information and applicable Regulations and obtain professional advice where necessary.
Clear Calculations Reduce Disputes
Many disputes about communal fees arise not because owners refuse to contribute, but because they do not understand how the amount was calculated.
A transparent Management Committee should be able to show an owner:
Unit area → Contribution percentage → Annual budget → Amount payable
When the calculation is clear and supported by proper records, it becomes considerably easier to collect communal charges and deal with unpaid balances.
The Key Principle
The most important point for owners and Management Committees is that communal fees in Cyprus should not automatically be calculated simply by dividing the building’s expenses by the number of apartments.
Under the legal framework governing jointly owned buildings, the proportion payable by each owner is determined by the applicable Regulations based on the area of the owner’s unit. (CyLaw)
For Management Committees, applying the correct percentages, keeping proper accounts and explaining charges transparently can prevent many of the disputes that arise in jointly owned developments.
Disclaimer: This article is provided for general information purposes only and does not constitute legal advice. The correct allocation of expenses in a particular development may depend on its title information, registered Regulations, configuration and individual circumstances. Professional legal or property advice should be obtained where necessary.