Communal Fees and the Ongoing Challenges in Cyprus’ Jointly-Owned Buildings

More than two years have passed since the introduction of a legislative proposal aimed at tackling long-standing management issues in Cyprus’ jointly-owned buildings. Initially presented as a single bill, it has since evolved into three separate measures, following extensive feedback from key stakeholders such as the Cyprus Association of Jointly-Owned Managers (SYDIKOIK), the Association of Cyprus Banks (ACB), and the Cyprus Real Estate Registration Council. Despite these efforts, one critical issue remains largely unaddressed: the consistent non-payment of communal fees.

The Crisis Facing Jointly-Owned Buildings

Based on extensive correspondence and feedback from Management Committees, the most pressing challenge lies with owners who refuse to pay their communal fees. This refusal not only threatens essential building operations — including insurance coverage and ongoing maintenance — but also unfairly shifts the financial burden onto those owners who stay current with their payments.

For Management Committees to ensure proper upkeep and compliance with legal requirements, they must have timely access to collected fees. Without an effective enforcement mechanism for fee recovery, the committees are left underfunded and unable to carry out urgent repairs or maintain insurance policies, putting all residents at risk.

Adding complexity to the problem is the significant number of properties still lacking Title Deeds, which prevents committees from registering memos or pursuing standard enforcement procedures. This often leaves litigation as the only route, a process that is prohibitively expensive and time-consuming, making it ineffective for immediate funding needs.

Responsibility for Communal Fee Payments: Banks and Asset Managers

An area of particular concern is the treatment of repossessed units. When banks repossess properties within jointly-owned buildings, they must take responsibility for paying the associated communal fees. The same responsibility should extend to credit acquiring companies and asset management firms (commonly known as ‘vulture funds’) that handle portfolios of distressed loans. Failure to do so deepens financial inequities and further damages the ability of Management Committees to maintain building safety and services.

Handling Fees for Deceased Owners

In cases where the property owner has passed away, legal executors or estate administrators are responsible for settling any outstanding communal fees. These debts are typically deducted from the estate before distribution among heirs, ensuring that communal obligations are honored.

What Effective Reform Should Look Like

For recent legislative efforts to be truly impactful, they must empower Management Committees with clear, practical, and enforceable tools for collecting communal fees promptly. This could include administrative enforcement options, financial penalties for delinquents, or streamlined fee recovery processes. Without such mechanisms, reforms risk addressing only superficial symptoms rather than the root causes.

At the same time, it’s important to recognise that some owners face genuine financial hardship due to illness, job loss, or other difficulties. Compassionate, flexible repayment plans facilitated by mediation services are essential to balancing fairness with the collective interest of all residents.

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