Civic activists have defended some positive norms of the bill No.8474 “On making amendments to some laws on condominium.” But it’s too early to celebrate.
Condominiums. Committee chronicles. Part 1
Finally appeared long-awaited version of the bill No.8474 "On making amendments to some laws on condominium”, which is to be submitted for second reading. The bill was considered on the meeting of VRU Committee on construction, city planning, housing service and regional politics on 7 December 2011, with the participation of NGOs.
Positive sides of the bill
The biggest achievement of the bill is depriving condominiums of the “label” “service provider”. In particular, it settles the issue of self-sustaining maintenance of the building by the association and supporting relationships with producers and performers of housing and communal services. It also removes the idea of an agreement between the condominium and residents on the provision of services; norms and terms which don’t correspond the status of condominium as non-profit organization. In particular, the term “economic activities” is substituted by the term “household support of non business entities”. The bill clearly determines, that Condominiums should pay for cold and hot water, heat and electricity, gas, communal services and maintenance services for buildings according to the prices (tariffs) set for the population. Electricity and gas supply is provided on the basis of individual agreements between owners and enterprises-monopolists. Privileges and subsidies for housing and communal services are applied to contributions (payments) of co-owners which are paid to condominiums.
The next great achievement – is substitution of the term “member” of condominium by “co-owner”. This will avoid manipulations by dishonest owners who do not want to pay contributions as well as by the Management Board of a condominium, which takes decision to "accept" or not "accept" co-owner in a condominium, and allow participating in taking decisions on their property (especially for newly built buildings). It also provides that a state registration of the union (association) shall be free.
What was lost after the first reading
It's a shame that all changes to the Civil Code have disappeared. In particular, a norm on a land under the apartment house, which provided that it is a part of a property, which by the law, without any further formal actions, is recognized as a common property of the owners of premises in an apartment building. In the law “On condominiums” again appeared a norm which provides that a condominium is to be liquidated in case of physical destruction or demolition of a residential complex. Thus, co-owners were deprived of the right of land possession. The norm, which provided that owners of residential and non-residential premises in an apartment house have equal rights and responsibilities, also disappeared.
Besides that, the term “balance keeping” was returned, although it doesn’t correspond to the functions of condominiums. As it comes to the management of an apartment house, there should be changed only terminology (this confusion creates many obstacles for condominiums).
What remained unconsidered
The problem of access to information about the condominium co-owners wasn’t taken into consideration. In particular, providing possibility for co-owner of the apartment house to receive information sheet with a list of flat owners and owners of non-residential premises in an apartment house upon written request from the National register of property rights.
Which threats have appeared
The editing of the Land code even worsened. In particular, in the Article 42 is written: “a land of state or communal ownership on which are situated residential buildings and adjoining constructions, buildings within the surrounding territory are given to usage of legal entities that manage these buildings." Thus, to use a land can not only a condominium, but also a building manager (!). Ownership is not provided for both co-owners and condominiums.
Appeared a norm which states that, in case co-owners don’t establish condominium in three month after placing the house in service, the developer independently determines a building manager for this building (read - own affiliate).
How discussion was held in the Committee
The meeting was surprisingly democratic. To the discussion were invited following representatives of NGOs: Tetiana Boiko, Civic Network OPORA, Viktoriia Pohorielova and Dmytro Levytskyi from the Institute of Local Development, Oleksii Kucherenko ta Mykhailo Berezovchuk from the Homeowners Association of Ukraine and others. The bill No.8474 was prior to discussion.
Deputy head of VRU Committee on construction, city planning, housing service and regional politics Ihor Lysov informed everybody present that the Committee received a letter from the Ministry of regional development with a strong request not to spoil the first reading version. The deputy stressed, that such tone is unacceptable for communication and that the Ministry should remember: the bill is already owned by the Committee. The head of the Committee also reported, that he received a letter from the Lviv mayor – resolution of the Condominium forum, supported by more than 70 NGOs and 800 condominiums.
“Some statements of the resolution can't be supported. We are talking about getting information about co-owners from the State Register, consolidation of land as a part of co-owners’ property. Still, we don’t understand why condominiums shouldn’t be liquidated in case a building is demolished?” - says Mr. Lysov. However, having heard arguments of public activists, first deputy head of the minister of regional development construction and housing and communal services of Ukraine Oleksandr Alipov proposed deputies to compromise with people and give the land to co-owners of an apartment building.
Further committee discussion was in a form “people speak – deputies listen”.
Tetiana Boiko, the Leader of housing programs of the CN OPORA spoke about the land, surrounding area and obsoleteness of the term “balance keeping”. “It’s nonsense when a building has one owner (co-owners of premises), and the land - another. Today, we are not owners, but “half-owners”. The land is really valuable thing, not meters of apartment air. The property ownership should be derivative from the land ownership, as it’s done in developed countries. That’s why it’s necessary to return amendments to the Civil code and include the land to a common building ownership, and indicate in the Land code that the land is owned by co-owners. Thus, is case the building is ruined people remain owners of the land, and can start a new building on it. Giving the right to use surrounding area to a building manager is unacceptable. Another thing – “balance keeping”. This term is Soviet and archaic. How possibly the property of co-owners can "remain on balance" of another person? - wonders Ms Boiko. - Why this person should decide, to let co-owners dispose their property or not? This term can bring nothing but corruption with itself. In the law “On Condominiums" should be mentioned, that the building is in the management of condominium since it’s built. What should be passed, is technical documentation, not a building "on balance". Third. A norm, which appeared between first and second readings is unacceptable – to let a builder appoint the superintendent for this building if co-owners don’t establish condominium during some first months. Maybe, this idea is not so bad. But in practice we get only new "Holosiivska fortress”. The developer will appoint its executives, and owners will get into its slavery. This idea can hardly bring something else than social tension. Thus, it should be excluded. And at last – the possibility of getting information from the State register about co-owners is a very important moment in creation of a condominium. In other way, how should be gathered quorum? That’s why we should stand up for this norm. If not in this, than in the other bill.”
Oleksii Kucherenko, the head of the Homeowners Association of Ukraine, emphasized that empty norms shouldn't be adopted. “Nobody is going to come back to the issue of condominiums, it will be pseudo-solution of problems. There will be no reform without radical changes”, - said the head.
Viktoriia Pohorielova (Institute of Local Development) proposed to return to all norms of the Civil code in the first editing. She deems that it contains agreed position of all the central authorities.
The speech of Viktor Matchuk was especially impressive. “Good or bad bill? If it solves problems which slow down the condominium development, than it’s good, if not – than it’s bad. Between good sides – self maintenance, advantages and subsidies on condominium payments, prices on housing services for condominiums as for the population. Nevertheless, the land and “balance keeping” problem is not solved. And it’s bad. Let’s gather on the next Monday (12 December) and consider this issue one more time" - proposed deputy.
What’s next?
It was decided to remove amendments in the Civil code and solve some problem issues. It was also decided to continue the meeting of the Committee on Monday 12 December 2011 at 2pm together with the community and discuss land issue, “balance keeping”, management of new buildings. Concluding, the deputy head of VRU Committee on construction, city planning, housing service and regional politics Ihor Lysov, appealed to the community with a request to prepare serious argumentation to defend following position – a land under the apartment building should be in ownership of co-owners.