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New Laws: Bulgarian Apartments Part Two - Owners Associations

Owners Association

The Owners Association is the new optional form of managing the common areas of the building/entrance. Its structure basically repeats the “old” organs – a General Assembly, which is composed of every owner and operates under the same rules as the standard General Assembly of apartment owners, a Manager or Council of Managers to whom the same rules apply, and a Controller or Council of Controllers (Note: another annoying discrepancy of the Act is that it does not clarify whether the Council of Controllers/Controller is an optional body where no Owners Association is formed or if it is obligatory – art. 10 thereof lists the managing bodies – 1) a General Assembly and 2) a Council of Managers/Manager. Then art. 24 below provides for the set of rules of election and operation of this new type of managing body, without specifying whether it is optional, given that it is not pointed in art. 10 above.)

The set of rules on the constitution, registration, manner of operation and liquidation of the Owners Association is provided in details in Section III, art. 25 – art. 37 of the Act and it is impossible to repeat it all here. What is interesting to know is what is the difference between the two forms of managing the common areas, since the Owners Association has the same bodies – a General Assembly and a Manager/Council of managers, and a controlling organ, which obey the same legal rules.

The main difference is that the Owners Association is a non-commercial  legal entity which is subject to registration in a Public Registry kept by the relevant regional or municipal administration. This means that unlike the General Assembly of condominium owners, the Owners Association is a separate juridical person which can have contractual and other relations with other persons, institutions and authorities. One clear example is that a standard General Assembly of condominium owners may decide to assign a certain maintenance company, but then all owners must sign separate maintenance agreements with this company, because neither the General Assembly of condominium owners nor the Manager/Council of managers are legal entities which can sign on behalf of owners whether they agree or not. The Owners Association can sign one single contract which will be binding all owners, who are by law members of the Association. Being a separate legal entity, the Owners Association can also benefit from the legal possibilities to obtain funding from different European funds for repairs. In my personal opinion, the provision of art. 28, Par. 1, item 5 of the Act according to which the Agreement on the establishment of the Owners Association may contain any other terms on which the owners have come to an agreement, provides a better legal basis for owners to agree upon different, more flexible and convenient terms on the calling, conducting and operation of the General Assembly of the Owners Association. Art. 11 of the Act which provides for the functions, rights and obligations of the ordinary General Assembly of condominium owners, does not contain such a common provision, on which such new or additional agreements could be based.

Provision of fines for breach of the Act

In chapter V, art. 55 to art. 57 provide for the different fines that can be imposed by the relevant regional or municipal administration, based on a Fact Finding Protocol prepared by either the Council of Managers or by the Manager and two owners, appointed by the General Assembly, or in case the defaulting owner is a member of the managing organ - by the Council of controllers, or by a Controller and two owners, pointed by the General Assembly. The old regulation also provided for some powers of the managing organ to impose fines, but the size of those fines was not determined and they were supposed to be provided in the Regulation on the Internal Order, adopted by the General Assembly, which often lacks detail. Now the new Act stipulates explicitly the different types of breaches and the applicable fines:

-    for an owner or an occupant physical person, breaching the law – from 20 to 100 leva, if it is a legal entity – from 150 to 350 leva;
-    for an owner or an occupant physical person, breaching the internal set of rules or anyhow disturbs the other owners and occupants – from 50 to 150 leva, if it is a legal entity – from 200 to 500 leva;
-    for a member of the managing bodies, breaching his/her obligations – from 300 to 1000 leva;
-    for breach of the obligation to register in the Registry of buildings in regime of condominium ownership the fine is from 100 to 500 leva.

The acts by way of which the breaches are ascertained and the fines are imposed, are subject to appeal.