Management committees face problems due to a law introduced in 2017.
A number of management committees in Cyprus, have recently found their bank accounts frozen due to a law introduced in 2017.
Management Committees are responsible for the management and administration of communal areas in apartment buildings and residential units in Cyprus. Management Committees collect funds for communal expenses. These funds from the unit owners are used to operate, insure, maintain and repair the communal areas. These areas are: entrance foyers, stairwells, lifts, external walls and common facilities such as swimming pools and tennis courts. Committees invariably open bank accounts to manage these expenses.
The law and regulations governing the management of buildings under joint ownership work well in cases where everyone pays their communal expenses. But it is hopeless in situations where owners refuse to pay. Reform of the law is urgently needed to enable committees to better deal with these situations.
But a new problem has recently come out, which results from legislation introduced in 2017 governing associations, foundations, clubs and federations. In the result, bank accounts of some committees were freezing.
Although this law was never intended to affect committees, some Management Committees opened bank accounts with a name that includes “Residents Association”. And this has brought them into conflict with the 2017 legislation.
An “Association” is required to provide the bank with its “Articles of Association”, which has been approved and stamped by the Interior Ministry. As they have been unable to supply this information, some banks have frozen their accounts.
If you are a member of such a Committee, you have to visit the bank and resolve the problem. Establishing a Management Committee it is highly recommended to avoid any name that includes the word “Association”.
Source: Cyprus Property News
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