Reforms in management of apartment buildings; Government steps away from Soviet-era approaches

ArmInfo. The Armenian authorities are reforming the institution of management of multi-unit apartment buildings (hereinafter: apartment buildings) and are considering transferring these powers to an external manager (outsourcer). At the same time, in order to protect the interests of the residents, the rights and responsibilities of the developer and the apartment owners are clarified. Tanya Arzumanyan, Head of the Department of Housing Fund Management and Communal Infrastructure of the RA Urban Development Committee, told ArmInfo.

She believes that the practice of managing apartment buildings is a complex and responsible process, since it is associated not only with complex urban infrastructure, but also with issues of life and safety of the people living in them.

Meanwhile, the two main legislative acts regulating relations in this area, the RA Laws  "On the management of an apartment buildings", and "On the condominium", were adopted more than 20 years ago and have long been inconsistent with the current realities. Moreover, Arzumanyan notes, even then these documents did not become the basis for regulating the sphere and forming real tools for managing apartment buildings.

The works in this direction were more inertial and were carried out within the logic of the Soviet times. As a result, over time, the crisis in managing common shared property has worsened, which has also led to the deterioration in the condition of apartment buildings.

Currently, the preservation and maintenance of the entire multi-apartment stock of the republic, which is about 19 thousand buildings, is carried out through governing bodies, which should be elected by the owners. As of today, only 40% of apartment buildings have an elected governing body, while the remaining 60% do not.

Within the framework of these reforms, in order to increase the transparency of the work of apartment buildings managers, it was decided to switch to the non-cash method of payment of mandatory fees charged to apartment owners. Provisions related to non-cash payments by owners and the opening of a separate bank account for this purpose (otherwise there is a risk of administrative liability) were established back in 2020 by amendments and additions to the RA laws "On the management of apartment buildings" and "On condominiums".

During the current year, in order to contribute to the efficient management of multi-apartment buildings, it was proposed to introduce an institute of professional managers, for whom professional qualification requirements were established.

According to the established requirements, building managers must have a secondary professional or higher education, as well as legal, technical, administrative and financial competences. Over the course of two years, current managers will be given the opportunity to be trained in these four areas. Arzumanyan clarifies that managers who have not completed qualification courses or who have failed them will have their powers terminated.

The decision will come into force on July 1, 2025, after which continuing education programs will begin.  The latter will be organized by the RA Urban Development Committee in accordance with the Education Law through universities and other organizations. Both current managers and those who are planning to engage in this activity can apply for training.

The reforms of the institute of managers will not be limited to this.  In the future, in particular, a complete review of the organizational and legal form of their activity is expected. Perhaps this function will be delegated to a private owner - on outsourcing. It is expected that this will improve the quality of services provided to owners of premises in apartment buildings.

At the same time, since the authorized body considered that the main gap in the current law, as well as in the management of apartment buildings, is the uncertainty of the distribution of roles, the Urban Development Committee of Armenia initiated the clarification of the functionality of the authorized bodies, not only the functionality of the Committee itself, but also of regional governorates, local self-government bodies, apartment buildings managers as well as developers.

In order to protect the interests of owners of premises in apartment buildings, it was also necessary to clarify the rights and obligations of the developer and the future owner of the property.  "The main part of the housing stock in Armenia was formed during the Soviet period, when owners of the property assumed their rights only after the property was put into operation. In recent years, however, the situation has changed dramatically. Property owners acquire rights from the moment the building is constructed and the apartment is purchased. As part of the legislative reforms, it was envisaged that the developer is obliged to carry out management on behalf of the apartment owner until the final decision of the apartment owners and the formation of the building management body.

In practice, there are often cases when an unscrupulous developer, after completion of construction and before the owners form a management body for apartment buildings, leaves the building to the mercy of fate," a representative of the Committee explains.

In addition, the developer was obliged to transfer all documentation on the apartment to the future management body. In particular, information about the network infrastructure of the building - where the cable lines are, what is the condition of the basement, the roof, etc., in order to avoid such situations in the future, for example when "someone hammered a nail in the wrong place, for example, when

The legislator also limited the rights of the developer to alienate a number of territories in a building under construction without the consent of the apartment owners. "The value of the future apartment is formed from various factors, including the structure of the building and its infrastructure. But there are situations when the developer, encumbered with rights even before commissioning the apartment, alienates part of the common shared property as separate property. Thus, the rights of the future owner are clearly violated," Arzumanyan explains.

In this regard, it was clarified that, for example, the plots located in front of the house, are subject to alienation only after obtaining the consent of the persons having ownership rights in this building.  In addition, a complete ban was introduced on the sale of the territory, the area where the infrastructure and buildings are located, ensuring the safety and maintenance of the entire building.