Cyprus Property Forum for Buyers, Sellers & Investors

On my development, we have a clubhouse facility (owned by the developer - not common buildings). It used to be a restaurant until the restaurant operators were ejected by the developer for poor contractual performance. The developer originally paid for the fixtures and fittings (F&F) - chairs, tables, cutlery, glasses, kitchen equipment - when the restaurant started and kept them there when the operators left.

A previous resident committee president (an unregistered committee, BTW) tentatively negotiated to purchase the F&F from the developer for 13,000 Euro in order to run a private social club in the future. Based on that initial negotiation, and a later EGM that voted in favour of purchase, the developer is now demanding payment from each owner to pay for these F&Fs - a total of 13,000 Euro, split equally between the number of plots (some are not sold yet). Although that same president got a majority vote (from those that were living there at the time - the estate is not finished), I have since heard my lawyer's opinion that says it is a void decision. 1. Because buying 'stuff' from a third party is nothing to do with running common estate (the committee has no powers to make decisions or ask for votes beyond servicing common property). 2. Its an unregistered committee. 3. You cannot commit owners - especially ones that havn't bought yet! - to additional expense beyond the running of the common areas.

The developer's representative has recently sent a message to the committee (not the owners..the committee) saying that this F&F payment is now due, and should anyone fail to pay, they will 'pursue' owners for payment 'legally' and charge interest. The committee passed on that message to the owners; nothing has ever come direct to the owners from the developer. That disturbing message from the developer has clearly scared some residents and a few have already paid up thinking they will be sued, even though they didn't personally want the F&F. Interestingly, those that paid did not receive receipts and were told by this developer that as its a 'contribution', they didn't need one! My instinct, based on that sort of behaviour, is that this is illegal. I have asked for a 'bill' from the developer, and an explanation of why they want this money. Nothing so far, despite several requests.

My questions are: 1. In your opinion, or based on any of your experience, do you think the developer has any grounds to legally pursue owners for this contribution? 2. Do you think the committee are acting outside of their legal remit? Some owners are hurting financially and cannot afford this additional cost - or a legal case. I would hate to see them 'coerced' into spending more if they don't need to.

Thanks,

Tucano

Hi Tucano,

I have to admit that I have not heard of this situation happening before.

Unless this ‘clubhouse’ forms part of the common area, I believe that there is no requirement on yourself (or anyone else on the development) to contribute towards its insurance, maintenance and repair.

I do not believe that the developer has any grounds to pursue you or any of the other buyers for payment – and I certainly believe that the committee is acting outside their legal remit.

Louise Zambartas wrote an article on the subject that you can find at http://www.news.cyprus-property-buyers. ... /id=003397

Under the heading ‘Regulations for the management committee’ she writes that the regulations governing the management of the building may not “Impose an obligation or payment not specified by law or Regulations”.

Look at it another way – if your committee president purchased Eurocypria, would he really expect you to contribute to its running costs?

Regards,

Nigel,

Thank you for your very prompt and helpful reply. A neighbour and colleague has - like me - refused to pay this additional developer charge - and gone one further: asking his lawyer for a full legal opinion, which I have now read. That Legal Opinion fully backs up what you are saying -which is common sense, based upon the law (Law of Immovable Property in PDF on your brilliant site) and what is actually written in our sales contracts. I am utterly amazed that the committee havn't reached the same conclusion as they also have this Legal Opinion and the same contracts. Rather than just passing on the developer's message to the residents, they should have challenged it on our behalf. Louise's article is excellent - I wish I, and all the residents, had seen it before.

As a follow up, some residents tried to get back their F&F money once they knew they were duped. They couldn't - because the developer said it was a 'voluntary contribution' towards a communal facility (which they own..).

I suspect that as the same committee are also currently 'running' the new social/sports club, its in their interest to get this furniture paid for by us. I must say I am disappointed that fellow residents can act this way rather than think of the interests of all. I guess its the sun...

The Legal Opinion also said that the committee was acting 'inter vires' - which, after looking it up, means acting outside their legal authority; just as you said.

Again, many thanks for your advice and opinion - armed with which I will stick with my colleague's line.

Tucano