The Ministry of Spatial Planning, Urbanism and State Property is preparing a new law that plans to unify regulations governing the management and maintenance of apartment buildings, introduce professionalization of managers, and strengthen control over spending of money from joint accounts.
This government department also announced to "Vijesti" that it will review the legally prescribed minimum building maintenance fee of 20 cents per square meter that tenants currently pay, assessing that, due to rising prices and costs, the existing solution requires changes. Also, through the drafting of the new law, the practice of investors, when selling apartments, determining in advance the companies that will maintain the buildings, will be analyzed, in order to consider the possibilities of its more precise legal regulation and protect the interests of apartment owners.
The reason for the new legal solutions are the assessments of the United Nations Economic Commission for Europe (UNECE), which in the document "Country Profile of Montenegro in the Field of Urban Development, Housing and Land Management" warned that the system of maintenance of residential buildings is accompanied by a lack of money, poor collection of obligations and insufficient transparency in the spending of money, which is why it recommended additional reforms in this area.
Country Profiles in the field of urban development, housing and land management are designed to help governments improve the performance of public policies in the housing, urban development and land management sector, as well as to promote sustainable development. The Country Profile of Montenegro in the field of urban development, housing and land management was prepared in response to a request from the Government, sent through the Ministry of Spatial Planning, Urbanism and State Property.
Special focus will be placed on improving control over the spending of funds from joint accounts, carrying out necessary works on residential buildings and respecting deadlines for their execution, especially when it comes to works on roofs, facades, installations...
The maintenance of residential buildings in Montenegro is regulated by the Law on Property Relations and the Law on Maintenance of Residential Buildings.
"The state's responsibility for housing maintenance and the transfer of ownership to existing tenants without taking into account the fact that they lack the knowledge and financial capacity to assume these obligations further complicates the situation. Many owners do not meet their financial obligations, which leads to a lack of funds for necessary repairs and maintenance. At the same time, there is a lack of transparency regarding the way the collected funds are spent," the UNECE concluded in the report, adding that there is currently no national register of apartment building managers in Montenegro.
It is further stated that in new residential buildings, cases have been observed where the purchase contract stipulates that the maintenance of the building be entrusted to specialized companies, which creates room for arbitrary determination of future maintenance costs by the maintenance company.
"The selection of a manager is the exclusive right of condominium owners and the law should prohibit obligations imposed by investors upon sale," the report pointed out.
Inherited behavior pattern
From the Ministry, headed by the Minister Slaven Radunović, stated that during the transition process in Montenegro, the Law on Housing Relations from 1990 privatized socially owned apartments, and that around 95% of apartments were purchased in a relatively short period of time, which raised numerous issues related to the management, use and maintenance of the housing stock, especially in the common areas of apartment buildings.
"One of the causes of inadequate maintenance is the inherited model of behavior from the previous period, when tenancy right holders did not have direct obligations regarding the maintenance of common parts of buildings. Such an approach has led to the perception that someone else is responsible for the maintenance of the building, and not the owners of the separate parts themselves. Despite the improvement of the legislative framework in the field of condominium ownership and maintenance of residential buildings, the aforementioned practice has not yet fundamentally changed, which is why the problem of insufficient investment in maintenance and the gradual deterioration of part of the housing stock is present. Certain institutional developments in the field of management and maintenance of residential buildings were achieved with the adoption of the Law on Condominium Ownership in 2004, which, among other things, introduced the obligation for the assembly of condominium owners to entrust the performance of maintenance tasks of a residential building to a company, another legal entity or in another manner prescribed by law," the Ministry explained.
After the adoption of the Law on Property Relations in 2009, as stated in the ministry, the normative regulation of condominium ownership was divided between several regulations, with the Law on Condominium Ownership no longer in force, and certain issues were regulated by the Law on Property Relations and regulations governing the maintenance of residential buildings. They point out that a significant institutional step forward was achieved with the adoption of the Law on Housing and Maintenance of Residential Buildings in 2011, which, among other things, established inspection supervision in this area, improved the work of competent local self-government bodies and created the basis for establishing a register of residential buildings, managers and condominium owners, as well as for more efficient control of the implementation of legal obligations.
"However, we are still faced with the fact that certain negative practices persist in the daily functioning of the system, which is why the Ministry has begun work on developing a new legal solution that will further improve the existing system of management and maintenance of residential buildings. Bearing in mind that the area of management and maintenance of residential buildings is currently regulated through two laws, the Ministry has begun developing a new legal solution that will unify the norms governing this area. The goal is to establish a single, more transparent and functional legislative framework, which will facilitate the application of regulations in practice, improve legal certainty and reduce the possibility of different interpretations and normative overlaps," the Ministry said.
The 20 cent fee was established in 2016.
UNECE estimates that the minimum monthly maintenance fee of 0,20 euros per square meter may not be sufficient for quality management and maintenance of buildings. "Vijesti" asked the ministry whether they believe the current model is sustainable.
"The minimum point value for calculating the maintenance fee is defined by the Law on Maintenance of Residential Buildings from 2016. Given the significant increase in prices of goods, services and costs of construction work in the previous period, the existing legal solution requires review within the framework of drafting a new law. It is necessary to bear in mind that the maintenance of a residential building does not only include regular cleaning and servicing of installations and equipment, but also the performance of various construction works on common parts of the building, which directly affects the actual costs of maintenance," the Ministry said.
One of the planned reforms also relates to the professionalization of residential building management, or rather, the professionalization of managers, which, as the ministry says, will contribute to more efficient control of the work of companies that perform these tasks.
"Special focus will be placed on improving control over the spending of funds from joint accounts, carrying out necessary works on residential buildings and respecting deadlines for their execution, especially when it comes to works on roofs, facades, installations and other elements important for the safety of buildings. The activities of condominium owners will be additionally linked to the responsibilities of inspection bodies, with the aim of improving the maintenance system and preserving the safety of residential buildings," the ministry said.
Owners do not have to accept the investor's company
"Vijesti" asked whether the ministry would change the law to protect condominium owners from the practice whereby investors impose building maintenance companies on them when selling apartments, because, according to UNECO, this opens up space for arbitrary determination of maintenance costs.
"The assembly of condominium owners is made up of owners of specific parts of a residential building, namely apartments and business premises, who are obliged by law to manage and take care of personal and common property. The exclusive competence of the assembly of condominium owners is to make a decision on who will be entrusted with the management and maintenance of a residential building. A contract for the purchase and sale of an apartment or business premises is an expression of the freely expressed will of the contracting parties, with each party having the opportunity to negotiate the contractual provisions before its conclusion. In this regard, future owners may request the amendment or deletion of the contractual provisions that determine in advance the entity that will perform the maintenance of the residential building," the Ministry said.
As announced, the ministry will, through the development of a new legal solution, further analyze this practice and consider the possibilities of its more precise normative regulation in order to protect the interests of condominium owners.
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