Communal Service Charges

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Calculation of Service Charges

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Calculation of communal service charges is very easy and straight forward as long as you know what you are doing, and also abiding with relevant laws. In the Republic of Cyprus when persons acquire or purchase properties in an apartments block, complex or estate they might not have been aware of this at time of acquisition or purchase, but they are also acquiring or purchasing a percentage of the communal areas, services and facilities of the development. 

This percentage is very important  as it is used for many things, as outlined below. (Not in any specific order)

1. Calculation of what owners are legally required to contribute toward the day-to-day communal expenditure of the development.
2. Calculation to establish what percentage owners’ pay toward required works on communal areas or communal services/facilities that might not be covered by the day-to-day communal service charge fees.
3. Calculations on how much owners contribute towards communal area buildings and public liability insurance.
4. Insurance payout if anything happened to the development.

In Cyprus when a property is purchased on a Private Estate, Complex or Apartment Block which have communal areas, services and/or facilities then immovable property laws, Law Cap 224 and the ‘The Immovable Property (Tenure, Registration & Valuation) (Amendment) Law Of 1993 (6 (1) 1993)’ apply to the property.  It is a legal requirement that each and every unit owner contributes towards expenditure for jointly owned shared facilities, communal maintenance, services and utility bills.  Communal area buildings and public liability insurance is also a legal requirement. 

These Charges Are Payable Irrespective of Whether the Property is in Use or Vacant or Whether It’s Furnished or Unfurnished.  

 Each Owner Is Legally Liable To Pay Their  Table B Percentage   of Any And All Communal Expenditure

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How Is Table B Percentage Calculated?

This is where 99% of Management Committees and 95% of Communal Property Management Companies get it wrong, and if this is wrong then the development is non-compliant with the Immovable Property Laws therefore the law cannot aid in the recovery of unpaid communal service charges.  

I fully understand when Management Committees get this wrong, however, I really do not understand it when Communal Property Management Companies get this wrong.  Many of then do not know how to calculate Table B or they use the percentage as displayed on title deeds and this is totally incorrect.

The law is very precise regarding this subject

As per sections 38A.- ‘unit’, 368H.-(1) & 38K.-(1) of the ‘The Immovable Property (Tenure, Registration and Valuation) (Amendment) Law Of 1993’

 38A.- ‘unit’ means a storey or part of a storey, a room, an office, an apartment, a shop or any other part, or space of a building under joint ownership which may be appropriately and conveniently possessed and enjoyed as a complete, separate and self-contained unit for any purpose:

38H.-(1) The area of a unit consists of the covered area surrounded by the outer walls of the unit (internal m²)  and the covered and uncovered verandas and the covered and uncovered balconies (external m²) of the unit are included therein.  Where common walls exist between units or between a unit and a jointly owned property, the area of these walls shall be distributed equally among the units which have common boundaries or between the unit and the jointly owned property, as the case may be.

38K.-(1) The owners of all the units shall participate in the expenses which are necessary for the insurance, maintenance, repair, restoration and management of the jointly owned property and for securing the services prescribed by this Part or by the Regulations. The proportion of the share of each owner in the expenses shall be prescribed by the Regulations on the basis of the area of each  unit.

38R.-(1) Jointly owned buildings shall be regulated and governed by Regulations to be made in accordance with the following provisions. These Regulations shall provide for the control, operation, management, administration, use and enjoyment of the units of the jointly owned property and shall regulate the relations between the owners of the units and their rights and obligations in relation to the jointly owned building and joint ownership.

         (2) The owners of the units of jointly owned buildings may draw up Regulations and amend, revise, replace or revoke them by a decision of the owners of at least seventy-five per cent (75%) of the joint ownership, except if a different percentage is prescribed by or by virtue of this Part in relation to any specific matter.

         (3) The standard regulations shall apply in relation to jointly owned buildings for which a building permit has been issued and which have not been filed in the Land Registry as jointly owned premises:  Provided that, after the registration of the jointly owned buildings, the owners of the units may draw up Regulations and amend, revise, replace or revoke them, as provided by subsection (2).

Basic English Translation - In accordance to the present immovable property law, Table B percentages are calculated using each units total internal and external square meters, however, this calculation can be different if 100% of owners agree to an alternative method, example being, internal square meters only (excluding verandas), bedrooms only, everyone pays equal amounts and so on, however, if 100% of owners do not agree to an alternative then the princible law standard regulations apply.

A number of people will be asking why 100% of owner when the law states 75%?  

Section 34 of the immovable property law is why you need 100%

34.    A decision imposing on any owner obligations or payments of any kind or extent which are not provided by the Law or theses Regulations or which alters his rights, is not applicable in relation to this owner, unless he consents to it.

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After you have calculated Table B percentages, you then need to calculate the estimated expenditure for the development, in line with the services and facilities of your development and then each units pays their Table B percentage of that expenditure.

I know that everything might sound complicated or difficult, but,

for a Professional Communal Property Management Company,

****** it is not ******

We are here to help and assist any development anywhere in the Republic of Cyprus

We are able to take over the full management or administration of a development, or just advise and assist the management committee. 

As long as the development is getting correct advice and assistance so it can becaome and remain legally complaint, to us, that is all that really counts.  

Contact us now for your FREE NO OBLIGATION CONSAULTATION or just for advice