A fatal building collapse in Limassol has thrown a spotlight on unregulated property management companies alleged to be collecting tens of thousands of euros annually from apartment owners with little accountability, as a government reform bill sits stalled in parliament nearly two years after it was submitted.
Interior Minister Konstantinos Ioannou acknowledged the problem in a published article prompted by the collapse, which killed two people.
“The existing legislative framework does not provide the necessary tools for the effective management of jointly-owned buildings, nor does it provide adequate supervision and enforcement mechanisms,” he wrote.
The minister added that with nearly half the population living in jointly-owned buildings, modernising the framework was “an urgent necessity.”
Self-styled management committees — companies that in many cases are linked to the developers who built the complexes, or operate with their approval — are reportedly collecting common expenses of between €1,000 and €1,400 per unit annually, depending on size, without providing commensurate services, according to owners in several mainly tourist villages.
In complexes of more than 100 units, a single company can collect between €100,000 and €140,000 a year from one complex alone, owners said.
Owners have questioned whether these sums are declared to the state or audited. Under existing legislation, responsibility for management committees falls to the Land Registry.
A buyers’ representative told Phileleftheros that major financial interests stood to lose out if the pending legislation were approved, and that this was one reason the bill faced obstacles in parliament.
The companies are distinct from legitimate property management firms appointed by owners to coordinate shared buildings. In the cases described, owners said a representative of the developer approaches buyers under a different guise, concealing the connection to the construction company, and signs them up to management arrangements before they can organise independently.
The government submitted a comprehensive bill in August 2023 aimed at ending what the minister called the “disorder” in the management of jointly-owned buildings.
Its provisions include a clearly defined set of rights and obligations for owners and tenants, a mandatory Reserve Fund for maintenance and repairs, expanded powers for management committees including the authority to issue debt-clearance certificates as a condition of any sale or transfer, mandatory insurance for both buildings and individual units, and a registration and oversight system to be administered by the District Local Government Organisations (DLGOs).
Ioannou admitted that “despite efforts since 2023, discussion of the bill has seen significant delays, which are compounding the problem and having a direct impact on the issue of dangerous buildings.”
The DLGOs, which are tasked with overseeing jointly-owned buildings under the proposed new framework, said existing legislation already covers such buildings and that the Ministry is obliged to enforce it through the Land Registry. They added that the failure to enforce existing law has increased the number of dangerous buildings.