In recent years, homeowners’ associations have been on everyone’s lips in apartment buildings. It is believed that with the help of such associations it is possible to improve the quality of life of residents and to improve the common territory. However, the procedure of creation requires strength, patience, and perseverance. It is worth considering in detail the advantages and disadvantages of homeowners’ associations, and we also advise paying attention to the useful information, which will be useful both for ordinary owners and the initiative group of tenants.
WHAT IS A HOMEOWNERS’ ASSOCIATION?
A homeowners’ association (Association of co-owners of an apartment building) is a legal entity formed by the owners of apartments and/or non-residential premises in an apartment building for organizing the use, maintenance, and management of the common property.
WHY IS IT WORTH THINKING OF SETTING UP A HOMEOWNERS’ ASSOCIATION?
1. Interest in the result and responsibility for one’s habitation positively influences the quality and efficiency of management of the common property. People are interested in improving housing and communal services and reducing their costs. After all, in most cases, unscrupulous service companies do not worry about the quality of cleaning of the adjacent territory or repair of entrances.
2. The ability to control costs and direct them to the priority needs of tenants. In this case, people decide where to allocate the money: for the repair of the elevator or the roof of the roof.
3. The condominium can independently form the management, house tariffs, and define the amount of payment for the apartment.
4. Possibility to choose and control contractors who provide services.
5. Homeowners’ associations are exempt from tax payments (profit tax and VAT). In addition, in some cases it is even possible to raise additional funds. For example by renting out the territory adjacent to the house or the basement.
WHAT ARE THE PITFALLS?
1. After creating a homeowners’ association and signing the act of acceptance-transfer of all property, the local authorities are not responsible for the condition and problems of the houses. In this case, old, dilapidated buildings with many problems are at a disadvantage. After all, it is necessary to form a reserve fund, which will be able to cover all routine and extraordinary expenses. However, you can avoid problems if you approach the process of handing over the property wisely. It is necessary to demand from the local authority or management company to eliminate all the problems before signing the documents.
2. The need to make important decisions, especially financial ones, often generates conflict situations. Not all people can solve everyday problems peacefully, compromise, and hear the position of others. This factor sometimes makes life difficult for condominium residents.
3. Significant difference in the financial situation of the tenants of the house. This entails debts on utility payments and non-payment of funds to the common fund of the house.
4. Risk of misappropriation of funds by the management of the house. Or the manipulation of the property or the adjacent territory for profit.
5. Possibility to forge owners’ signatures after voting for a particular decision. This increases the likelihood that the board can act in their interests and violate the rights of the tenants.
1. The Law of Ukraine “On Association of co-owners of an apartment building”;
2. On the educational platform Prometheus, a series of online courses available to everyone – “Homeowners’ Association: a success story” – is dedicated to the topic of condominiums. The first online course tells about the basic aspects of creating and starting homeowners’ associations. The second draws attention to accounting nuances of condominium work, and the third course gives technical advice on maintenance of apartment buildings;
3. Templates of all documentation necessary to create and operate a condominium can be found on the specialized PROOSBB website.