In a significant move, on August 3rd, 2023, the Council of Ministers at its meeting approved the draft law ‘The Management of Commonhold Buildings and Related Matters Act of 2022’, authorizing the submission of the bill to the House of Representatives for enactment into law. This bill aims to tackle gaps in existing legislation, defining unit owners’ rights and obligations, enhancing management practices, and establishing effective operation and supervision.
The scope of application of the bill is not limited to registered commonhold buildings but extends to all commonhold buildings that have secured a building and subdivision permit, irrespective of whether no registration in the Land Register has been made, and consequently, separate titles for the units have not been issued.
Key provisions of the bill include:
- Designation of an Office of Common Buildings Registration and Oversight of the Operation of Management Committees, outlining its specific responsibilities.
- Standard by-laws to regulate the management of common buildings, defining the rights and obligations of owners. In the event that no specific regulations are issued under the proposed Act, the model regulations will automatically apply.
- Financial empowerment of the Management Committee to make expenditures reasonably necessary for the maintenance and proper functioning of the common areas of the commonly owned building, particularly when owners neglect their payments.
- Mandatory Compliance with the stipulations of the law and regulations by both the owners and the Management Committees, as failure to do so will be deemed an offense subject to a fine, not exceeding €3000,00.
- Power is granted to the aforementioned Office to impose an administrative fine in instances where an owner or the Management Committee by act or omission, is found to be in breach of the provisions of this Act.
Implementing the bill necessitated amendments to the Law on Sale of Immovable Property (Specific Performance)(Law 81(I)/2011) and to the Law on Transfer and Mortgage of Property (Law 9/1965), regarding the submission of a certificate from the relevant Management Committee that the communal charges for the unit have been paid, for the purposes of sale, transfer/mortgage of real estate.
Therefore, as is apparent, the provisions of the bill are geared towards addressing issues related to the administrative and legal aspects of the management and supervision of Communal Buildings, a necessary change considering the evolving housing landscape in the Republic, which requires a more nuanced framework to meet the contemporary needs.
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