On May 10, 2023, the Council of Ministers submitted a draft law amending and expanding the Condominium ownership management Act. On May 17, 2023, a group of Parliament members submitted a draft law for amendment and expansion of the condominium ownership management Act too. The projects to amend the Act, submitted to the National Assembly were successfully voted on the first Plenary sitting on June 9, 2023. From the debates in the National Assembly, it became clear that most of the Parliament members support the idea that the Condominium ownership management Act should be amended, but they will certainly insist that the texts voted on in the first sitting shall be refined.
The Condominium Ownership Management Act (COMA) needs to be brought in accordance with the measures of the National Recovery and Resilience Plan of the Republic of Bulgaria and this is the leading reason for the submission of the projects to amend the law, aimed mainly at the reform of investments in the energy efficiency of multi-family residential buildings.
Main results to be achieved with the proposed changes to COMA
- Achieving better communication between individuals from the condominium and increased attendance at general meetings;
- Facilitating the decision-making process for condominiums where there is low interest in participation in management and general meetings, as well as facilitating the decision-making process in cases of major building repairs, or the using of the EU funds, using the state/municipal budget, using subsidies;
- Creating conditions for a fairer distribution of the costs of management and maintenance of the common parts, due regardless of the habitability of the apartments and taking under consideration the annual cost of the subscriptive services in the building;
- Increasing trust in the professional managers, who are managing condominiums and increasing the possibility of control over their activity, as well as providing better guarantee for the users of the service – the apartment owners;
- Increasing the possibility of approval when applying for loans in order to implement measures.
Measures by which the achievement of the target results is foreseen
Some of the more important legal amendments, aimed at achieving the results described above are the following:
- Possibility of holding the general meetings of the condominium in a mixed mode – online and in person;
- Possibility of absentee voting, which can be carried out between the publication of the announcement for holding a general meeting and its holding (within a 7-day period before the holding of the general meeting) and its implementation by depositing a paper or electronic declaration;
- The condominium book can exist in paper or electronic form;
- Each owner or user is obliged within 15 days of acquiring the right of ownership or use, or in the case of renting, to submit a declaration for entry in the condominium book, the same obligation exists in the event of a change in circumstances, as the declaration can also be submitted to the e-mail address of the manager/management board. For this purpose, samples of the declaration and of the condominium book, approved by the Minister of Regional Development and Public Works, will be created;
- It is provided for the uninhabitable apartments in the condominium to pay for the costs of the common parts in the amount for one owner, user or resident;
- For holding general meetings of condominiums, the required minimum quorum should be reduced from 67 percent of ideal shares to 51 percent of ideal shares;
- It is also proposed to drop the possibility of postponing the general meeting to the next day in cases where a quorum of 33 percent of ideal shares is not gathered after a postponement of one hour. In these cases, it is proposed that the general meeting can be postponed for only one hour and if the required quorum is not present, it can be conducted lawfully however quorum is available;
- Creation and maintenance of a unified information system at the Ministry of Regional Development and Public Works, which unites two public registers – Register of professional managers of condominiums and register of condominiums. The creation of an ordinance is foreseen to settle this matter;
- Professional managers-traders exercising the activity of condominium management by occupation, will have to be entered in the public register and will have the right to carry out this activity only after entering the register and after paying a fee;
- In order to be entered on the register of professional managers, individuals will have to meet a number of statutory requirements, such as not having been convicted of a general intentional crime, unless they have been rehabilitated; are not included in a list under art. 5 paragraph 1 of the measures against financing of terrorism Act, etc.;
- Obligation of professional managers to conclude an insurance contract for “Professional Liability” insurance;
- The intervention of the mayor of the municipality or the region is envisaged in cases where there is no elected manager and controller for the condominium, whereas the mayor must organize the holding of a general meeting for the election of a manager and controller and appoints them ex officio, until the condominium organizes a general meeting for the election of these bodies;
- Obligation for the presence of a control body in each building in order to increase the transparency and accountability of condominium activity;
- The possibility of establishing a bank account of the condominium is envisaged.
These are some of the amendments introduced by the draft law.
During the discussions held on the plenary session, disagreements were expressed with the texts in this form, as mainly disagreements expressed by the Parliament members were for: the reduction of the quorum for conducting general meetings, which, according to them, poses risks regarding how the funds under the recovery program will be used, due to imposed corruption practices in Bulgaria; making important decisions with a very low quorum, which poses risks of abuse; appointing of managers ex officio and the fact that the mayor of the municipality or the region is involved in the structuring of the condominium.
Our team will duly monitor the progress of the voting on the changes to the act and will notify you when its final version is adopted.
The news above is for information purposes only. It is not a (binding) legal advice. For a thorough understanding of the subjects covered and prior acting on any issue discussed we kindly recommend Readers consult Ilieva, Voutcheva & Co. Law Firm attorneys at law.
