Apartment buildings and residential complexes in Cyprus often contain areas and facilities that belong to all owners collectively. These may include entrances, staircases, lifts, gardens, swimming pools, parking areas, roofs, corridors and other communal spaces.
The management of these areas is not simply an informal arrangement between neighbours. Cyprus law provides a legal framework for the administration of jointly owned buildings and establishes the role of the Management Committee.
Understanding how a Management Committee operates is important for apartment owners, property investors, developers and property-management companies.
What Is a Management Committee?
The principal legal framework governing jointly owned buildings in Cyprus is contained in Part IIA of the Immovable Property (Tenure, Registration and Valuation) Law, Cap. 224.
According to the Department of Lands and Surveys, every registered jointly owned building must have a Management Committee responsible for regulating and managing its affairs. (DLS Portal)
The Committee acts on behalf of the owners in relation to the management of the jointly owned property and is responsible for dealing with many of the practical and financial matters affecting the building.
Why Is a Management Committee Necessary?
Without an effective Management Committee, even relatively simple issues can become difficult to manage.
For example, someone must be responsible for collecting communal expenses, arranging insurance, maintaining lifts and communal areas, paying utility bills, organising repairs and dealing with owners who fail to meet their financial obligations.
The Management Committee provides the formal mechanism through which these responsibilities can be handled.
Its role becomes even more important in larger developments that include facilities such as swimming pools, landscaped gardens, security systems, underground parking, gates, gyms or other shared amenities.
What Are the Main Responsibilities of the Management Committee?
A Management Committee is generally responsible for the administration, control, operation and management of the jointly owned property.
Its responsibilities may include arranging routine maintenance and repairs, engaging contractors and service providers, collecting communal charges, managing communal funds and ensuring that the building has the insurance required by law.
The Committee may also need to arrange services such as:
- cleaning and maintenance of communal areas;
- lift servicing and inspections;
- swimming-pool maintenance;
- garden and landscaping services;
- electricity and water for communal areas;
- pest-control services;
- access-control and security systems;
- repairs to roofs, façades and other shared parts of the property; and
- building insurance.
The precise responsibilities may depend on the building’s registered Regulations and the facilities forming part of the jointly owned property.
Who Must Pay Common Expenses?
One of the most frequent sources of disagreement in apartment buildings concerns communal expenses.
Under Section 38IA of Cap. 224, all unit owners are required to contribute towards the expenses necessary for the insurance, maintenance, repair, restoration and management of the jointly owned property, as well as the provision of applicable communal services. (CyLaw)
An owner cannot generally avoid contributing simply because they do not personally use a particular common facility.
The legal obligation arises from ownership of a unit and the owner’s corresponding share in the jointly owned property.
How Are Common Expenses Divided Between Owners?
Common expenses are not necessarily divided equally between all apartments.
The legislation provides that each owner’s contribution is determined in accordance with the applicable Regulations and is based on the area of the owner’s unit. (CyLaw)
This means that an owner of a larger apartment may be required to contribute a larger proportion of the building’s communal expenses than the owner of a smaller apartment.
For this reason, Management Committees should use the correct allocation method rather than simply dividing every bill by the number of apartments.
Clear accounting is particularly important because disagreements can arise when owners believe that communal charges have been calculated incorrectly.
Can the Management Committee Collect Money in Advance?
Yes.
The law gives the Management Committee the power to establish and maintain a fund which it considers sufficient for the management, operation and administration of the jointly owned property.
This fund may be used to meet management expenses, insurance premiums and other obligations of the Committee.
The Committee may also determine the amounts that need to be collected from owners and the timing and method by which those amounts must be paid. (CyLaw)
Maintaining an appropriate reserve fund can be particularly important for buildings where significant future expenses may arise, such as lift replacement, roof repairs, external painting or major swimming-pool works.
What Happens if an Owner Refuses to Pay?
Failure to pay communal expenses does not automatically remove the owner’s obligation.
Where an owner fails or neglects to pay their required share, the Management Committee has legal powers to recover the amount owed.
Section 38IA expressly provides that the Management Committee may recover amounts owed by a defaulting owner through legal proceedings. (CyLaw)
This makes proper record keeping extremely important.
A professionally managed Committee should maintain clear records of:
- invoices;
- budgets;
- payments received;
- outstanding balances;
- notices sent to owners;
- bank transactions; and
- decisions approving expenditure.
Good records can significantly reduce disputes and are particularly important where legal recovery becomes necessary.
Is Building Insurance Mandatory?
Yes, certain building insurance is compulsory.
The Management Committee must insure and keep the jointly owned building insured against fire, lightning and earthquake with a licensed insurer, for an amount that the Committee considers to represent the building’s replacement value. (CyLaw)
Insurance against additional risks may also become compulsory where the required ownership majority decides to obtain such cover.
This is an important responsibility because inadequate insurance can expose all owners to substantial financial risk if serious damage occurs.
Management Committees should therefore review insurance cover periodically rather than simply renewing the same policy automatically each year.
What Are the Building Regulations?
A jointly owned building may have registered Regulations governing the relationship between owners and the administration of the property.
These Regulations can address matters such as the use of common areas, owners’ rights and obligations, management procedures and the operation of the jointly owned property.
According to the Department of Lands and Surveys, where specific Regulations have not been prepared and registered for a jointly owned building, the standard Regulations apply. (DLS Portal)
Where owners wish to adopt their own Regulations, the applicable legal procedure and voting requirements must be followed. The Department of Lands and Surveys states that Regulations submitted for registration are considered valid when approved by owners representing at least 75% of the jointly owned property. (DLS Portal)
Can a Management Committee Appoint a Property Management Company?
In practice, many Management Committees appoint a professional property-management company to handle the day-to-day administration of the development.
A professional manager may assist with collecting communal fees, coordinating maintenance, obtaining quotations, dealing with contractors, preparing financial statements, communicating with owners and organising general meetings.
However, appointing an external manager does not mean that the Management Committee should stop exercising oversight.
The Committee should clearly define the services being provided, the authority given to the property manager and the procedures for approving expenditure.
There should also be transparency regarding the building’s accounts, contracts and financial position.
What if the Building Does Not Have a Management Committee?
The absence of an active Committee does not mean that the building is exempt from the legal framework.
The Department of Lands and Surveys states that every jointly owned building must have a Management Committee.
Where a Committee has not been established, an owner of a unit in a registered jointly owned building may apply to the Department of Lands and Surveys in relation to the appointment of a Management Committee, subject to the applicable procedure. (DLS Portal)
Allowing a building to operate for years without a functioning Committee can create significant problems, including unpaid bills, inadequate insurance, deferred maintenance and disputes between owners.
Transparency Is Essential
A Management Committee is responsible for managing money belonging collectively to the owners.
Transparency should therefore be a central part of good building management.
Owners should be able to understand how communal fees are calculated, what money has been collected, what expenses have been incurred and whether there are outstanding liabilities.
Budgets should be realistic and major expenses should be properly documented.
Whenever possible, Management Committees should obtain written quotations for significant works and maintain a clear record of decisions made at Committee meetings and general meetings.
Managing a Building Is More Than Collecting Common Expenses
An effective Management Committee has a much wider role than simply issuing communal-charge invoices.
Its purpose is to protect the building, maintain the common property, manage communal finances responsibly and ensure that owners’ shared obligations are properly administered.
Good management can also help protect property values.
Buildings that are well maintained, adequately insured and financially organised are generally more attractive to owners, tenants and prospective purchasers than developments suffering from unresolved debts, neglected repairs and ongoing disputes.
Professional Management Can Make a Significant Difference
Managing a jointly owned building can become demanding, particularly where there are many owners, rental properties, swimming pools, lifts or extensive communal facilities.
A structured management system can help ensure that maintenance schedules are followed, communal expenses are collected correctly, contractors are supervised and owners receive accurate financial information.
For Management Committees, the objective should be to combine legal compliance, financial transparency and effective property maintenance.
A well-run Management Committee does not simply manage today’s expenses. It helps protect the condition, safety and long-term value of the entire development.
Disclaimer: This article is provided for general information purposes only and does not constitute legal advice. The rights and obligations applicable to a particular jointly owned building may depend on its title deeds, registered Regulations, ownership structure and individual circumstances. Independent legal advice should be obtained where required.