Communal Fees - Making them up!

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HappyCamper
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Joined: 04 Jan 2018 19:48

Communal Fees - Making them up!

Post by HappyCamper » 20 Jul 2019 12:00

would appreciate advice please.
I own an apartment in Paphos built by one of the major developers. Their in-house property management company collect communal fees from us all, but I am not comfortable with how they are calculating individual shares.
As I understand is there is only one way to correctly calculate shares of communal fees in Cyprus. That is defined in the Immovable Property Act as the covered and uncovered areas of the unit as a proportion of the total covered and uncovered areas of the Development. The answer to this calculation is shown on my Title Deeds is 2.32%. We also have a Management Agreement with the developer that says that the payment of communal expenses will be in accordance with the proportion of the total extent in square meters of for covered area of the building owned by the Unit.
I can download the data for each Unit’s area for my development from the Land Registry Portal and calculate the percentage share for each of us - easy peasy
This all seemed straightforward until I got my bill.
It turns out the developer is adjusting the land registry numbers by notionally allocating areas of the communal space to each Unit. Furthermore, there is no rationale to the way they are doing this at all – in some cases the “adjustment” had actually lowered the size of some Units from the Land Registry data, and is some it has increased it. The bottom line for me is that I am being charged about 60 euros a year more that the Immovable Property Act, my Title Deeds, and the Management Agreement say that I should be charged. Others are being charged less that the Management Agreement says they owe.
I have no idea why the developer has done this, but when I have pointed out to them that they are breaking both the law and their contract with us all they just tell me that it needs a “vote” of owners to change things. I don’t think it does. The Law is the Law, and a Management Agreement is binding on us both. What I have done financially is to adjust their bill to me to reflect the correct allocation and paid that promptly. I have also asked them to explain and justify their own different calculations to me. I have also put them on 3 month’s notice (that I have to do) of my intention to refer this to the Cypriot Financial Ombudsman. Needless to say I have heard nothing from them and the three months is up in a fortnight.
Am I being reasonable? Surely there is only one way to do this calculation and surely the Management Agreement is binding on us both? Is the Financial Ombudsman the best way to go?
Comments would really be appreciated – I am aware that this would have huge impact on the developer - 1000’s of owners affected - and I am told that collections of arrears through Cypriot Courts would not progress if an Owner were to show that the original calculations were wrong.
Thanks



HappyCamper
Posts: 31
Joined: 04 Jan 2018 19:48

Re: Communal Fees - Making them up!

Post by HappyCamper » 10 Aug 2019 01:22

Result

They appear to have given in - albeit with the Cypriot refusal to admit a mistake and talk rubbish instead! they had until today until I referred then to the Financial Ombudsman - then this came ....


Dear ....Further to our previous communication with regards to the above subject, we are pleased to be informing you that we have investigated the matter and have found a solution which we trust will be to your satisfaction.
The method that Blue Orange has been using to calculate the proportion of each unit to communal expenses has been correct as well as the total amounts charged.
The difference appears to have been due to the difference in the measurement of a couple of units by the Land Registry in relation to the measurement that Blue Orange had in records, for which we had not been informed. We have confirmed the square meters with the Land Registry and from now on the charge of communal expenses will be done accordingly.
We would like to thank you for pointing this matter out and for all your help in the assessment and resolving of the case. We always appreciate the constructive feedback from our customers and having a close cooperation with them.
We remain at your disposal for anything further you may require.
Regards,
Chief Accountant
Blue Orange Property Management



Nigel Howarth
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Re: Communal Fees - Making them up!

Post by Nigel Howarth » 10 Aug 2019 10:34

At least it's sorted.

But it's the developer who advises the Land Registry of the areas of each unit so I don't how the figures Blue Orange had were different?

And as you have your Title Deeds why haven't you set up a Management Committee as required by the law?

Regards,


Nigel Howarth
Independent information & advice for Cyprus property buyers
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HappyCamper
Posts: 31
Joined: 04 Jan 2018 19:48

Re: Communal Fees - Making them up!

Post by HappyCamper » 13 Aug 2019 00:37

thank you Nigel

it is sorted now - and I think I understand what might have happened
an FB response ...

my guess would be Pafilia sold the larger roof top apartments, pent house apartments with a promise of low annual maintenance fees, and used their interpretation of the law to get around the responsibility to share costs properly, it would also be interesting to have all the figures for total sq meterage and annual fees to see if the non penthouse apartments were in effect subsidising the larger ones ? and then would be doubly interesting if the larger apartments actual have their costs increased or will this just be swallowed up by the developer...I guess Brian from your tenacity you have asked all these question but there are some very slippery organisations out there.... ok I know there are some very good ones too...this just for clarifies how important it is to have a proper comittee and run your own management , at least your in the driving seat then lol.

I think he is right. Block A was sold first - with the gardens and penthouses - and is undercharged on communal fees. Block B next is ok. My Block (C) was the last sold and we are almost all being overcharged by more than 10% each.

I have asked about a Management Committee and was told owners lost their bottle a few years ago when it was discussed - and better the devil you know carried the day. It probably still would - they love to moan but don't like to come out and confront - which is not what I do! I know it is illegal tho - and who knows maybe this charging business might be a catalyst. Pafilia make signing their Management Agreement with BO a condition of sale - then it needs a majority (we are 51 of us) vote to change the status quo - hence they survive. V expensive on communal fees they are too - but in fairness their sales prices a more reasonable than some



Nigel Howarth
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Posts: 2433
Joined: 24 Oct 2007 14:38
Location: Erimi, Limassol, Cyprus
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Re: Communal Fees - Making them up!

Post by Nigel Howarth » 14 Aug 2019 09:58

HappyCamper wrote:
13 Aug 2019 00:37
it would also be interesting to have all the figures for total sq meterage and annual fees to see if the non penthouse apartments were in effect subsidising the larger ones ?
If you would like me to find out what sqm of the individual units in your development, drop me an email. I'll need a scan/clear digital photo of a part of your deed as below:

Image

Regards,


Nigel Howarth
Independent information & advice for Cyprus property buyers
Contact Nigel Howarth
Read the latest Cyprus property news

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