Buildings Insurance for a complex

Questions about living in properties with shared/common facilities
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dagetu
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Joined: 09 Sep 2010 21:41

Buildings Insurance for a complex

Post by dagetu »

Hi,
We are a complex of 80 properties but with just 35 of those paying maintenance fees. My question relates to the buildings insurance for the whole of the complex. Currently the developer insists that the 35 of us have to pay the insurance premium for the entire complex. I have read somewhere that any complex must indeed be fully insured in Cyprus but do we really have to cover all of those non paying owners? Can we simply take out our own individual insurance policies for our own property? This would save a few thousand Euros. Any advice gladly received please.
Nigel Howarth
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Re: Buildings Insurance for a complex

Post by Nigel Howarth »

Hi degato,

There is no easy solution to this problem - the law requires that the common areas have to be insured. You should have two insurances - one for your property - and one for the common areas (which must be fully insured and paid for by the Management Committee from the money collected from owners).

Unfortunately, non-payment of communal fees is quite common - particularly where their owners are living abroad. Another problem is that some developers do not pay for the properties they have yet to sell.

Assuming that the developer is still providing the management service, he should be chasing the non-payers.

You should establish a Management Committee and take control from the developer. You will then be able to pursue non-payers through the courts if necessary and you can also use an EU Enforcement Order to collect money from absent owners who are not paying.

Regards,
Nigel Howarth
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dagetu
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Re: Buildings Insurance for a complex

Post by dagetu »

Hi Nigel,
Thank you for your response. Can I just clarify please that if we get cover for the common areas of the complex and pay for it through the Management Committee then each individual can cover their own apartments. If that is the case then it will certainly save a few thousand I would think.
The non payers is an ongoing saga consisting of non existent people, total crooks and unfortunate folks who have fallen foul of the Swiss Franc mortgage debacle. Regrettably, until the bank repossesses and hopefully resales are made we are rather stuck with what we have.
Thanks again.
Nigel Howarth
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Re: Buildings Insurance for a complex

Post by Nigel Howarth »

dagetu wrote:if we get cover for the common areas of the complex and pay for it through the Management Committee then each individual can cover their own apartments.
Yes - that's correct. You'll find an article on the subject of insuring buildings at http://www.news.cyprus-property-buyers. ... /id=003525 (There's also a link at the bottom of the article where you can download it as a pdf).

Regards,
Nigel Howarth
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dagetu
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Re: Buildings Insurance for a complex

Post by dagetu »

Thanks for that but I'm now a bit more confused. The article that you mention has a section saying

"It is underlined that the obligation under the law is to insure the entire jointly-owned building
and it is not limited only to common areas or the jointly-owned property. This provision is
aiming at avoiding doubts and misunderstandings between insurers and insureds."

That seems to contradict what you are saying??
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Re: Buildings Insurance for a complex

Post by Nigel Howarth »

dagetu wrote:That seems to contradict what you are saying??
The whole of the property does need to be insured - the common/shared parts by the Management Committee - and the privately owned parts by their owners.

Both the common/shared parts and the privately owned parts must be insured with the same insurance company. (There have been cases where different insurance companies get into arguments as to which of them is responsible for what and this delays settlement of claims - this approach avoids confusion).

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dagetu
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Re: Buildings Insurance for a complex

Post by dagetu »

Hi Nigel,
Sorry to labour it but presumably then if we only insure on the personal side the 35 properties of the payers and there was a problem with one of the non payer, uninsured, properties we would have a major problem. Sounds like we are back to square one really?
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Re: Buildings Insurance for a complex

Post by Nigel Howarth »

You can't 'force' the owners of the individual properties to take out insurance for the parts that they own outright. If their property suffers damage or is burgled etc., that's their problem.

However, if an owner doesn't contribute to the insurance, maintenance, etc of the common parts, then the Management Committee can take action against the non-payer(s) - through the court if necessary.

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Nigel Howarth
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Spondoolies
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Re: Buildings Insurance for a complex

Post by Spondoolies »

"The whole of the property does need to be insured - the common/shared parts by the Management Committee - and the privately owned parts by their owners.

Both the common/shared parts and the privately owned parts must be insured with the same insurance company. (There have been cases where different insurance companies get into arguments as to which of them is responsible for what and this delays settlement of claims - this approach avoids confusion)."

Hi Nigel

Can you clarify that the above statement is correct and explain why please? Surely communal area insurance is separate from privately owned parts. Also, do mean private building or private contents or both? Thanks
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Re: Buildings Insurance for a complex

Post by Nigel Howarth »

Hi Spondoolies

Here's an extract from the link I posted earlier - http://www.news.cyprus-property-buyers. ... /id=003525
  • The insurance of the jointly-owned building

    (1) Compulsory insurance

    The Management Committee has an obligation under the law to insure and always keep insured the jointly-owned building against fire, lightning and earthquake with a licensed insurance company and to pay the premium.

    It is underlined that the obligation under the law is to insure the entire jointly-owned building and it is not limited only to common areas or the jointly-owned property. This provision is aiming at avoiding doubts and misunderstandings between insurers and insured.

    Disputes difficult to resolve may arise where the jointly-owned building is not insured in its entirety with on insurance company and damage is caused (e.g. from fire or earthquake) to the structure, the main walls or the common walls between the jointly-owned property and the units. Examples of such disagreements are the following:
    • The insurer of the jointly-owned property argues that the policy issued is in respect only of the common areas and thus he does not offer any amount for repairs.

      The insurer of a unit argues that the damage on the common wall is in respect of the half of the wall on the side of the jointly-owned property and does not offer any amount believing that the insurer of the jointly-owned property should foot the bill.

      The insurer of another unit argues that the damage is in respect of a main wall and not a common wall between the jointly-owned property and the unit he insures and thus he refuses to pay any amount

      The owner of another unit has not insured his unit and is not willing to contribute for the repair of the common wall between the jointly-owned property and his unit.
    Evidently the law provides the most satisfactory solution. Since the jointly-owned building is to be insured in its entirety with one insurance company, the disputes that appear in cases where one insurer insures the jointly-owned property and different insurers insure the units, or in cases where not all units are insured, are avoided.
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Nigel Howarth
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Spondoolies
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Re: Buildings Insurance for a complex

Post by Spondoolies »

Thanks Nigel. My interpretation of that statement would be that the compulsary insurance would be for communal building areas and individual building insurance for each private apartment from the same insurer. That would then leave the individual owners to provide contents insurance for their own apartments.

Is that correct? It is certainly different to what I understood was required and how our complex operates.

Thanks again
Nigel Howarth
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Re: Buildings Insurance for a complex

Post by Nigel Howarth »

Spondoolies wrote:Is that correct?
Yes - that's right. I will probably be cheaper if the individual owners got their building & contents insured by the same company.

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Nigel Howarth
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Markham12
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Re: Buildings Insurance for a complex

Post by Markham12 »

Nigel Howarth wrote:Hi degato,

There is no easy solution to this problem - the law requires that the common areas have to be insured. You should have two insurances - one for your property - and one for the common areas (which must be fully insured and paid for by the Management Committee from the money collected from owners).

Unfortunately, non-payment of communal fees is quite common - particularly where their owners are living abroad. Another problem is that some developers do not pay for the properties they have yet to sell.

Assuming that the developer is still providing the management service, he should be chasing the non-payers.

You should establish a Management Committee and take control from the developer. You will then be able to pursue non-payers through the courts if necessary and you can also use an EU Enforcement Order to collect money from absent owners who are not paying.

Regards,
Agree with Nigel and the point "You should establish a Management Committee and take control from the developer. " This post also increased my knowledge.
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