The government’s white paper aimed at regulating condominiums is a step in the right direction but not enough to address the myriad of problems, according to the Malta Development Association (MDA).
The proposed law offers better and much-needed regulation of the increasingly complicated relationships of owners and administrators in managing the common part of their buildings, but many other issues they face are yet to be addressed by the proposed law, the Condominium and Building Management Section (CBMS) told Times of Malta.
The government issued the white paper two weeks ago for public consultation.
The new bill could see the introduction of a tribunal that would settle common parts disputes in apartment blocks, and the setting up of a condominium regulator to uphold and update standards, and to keep a register of all qualified condominium administrators.
The CBMS welcomed the key changes that it had put forward in its proposals to government but said the white paper falls short of addressing other administrator issues.
In many condominiums, administrators often quit or are removed and fail to hand over finances, documents and other relevant items to the new administrator, essentially halting the common-parts management.
In other cases, the new administrator starts the finances from scratch without asking for a handover from their predecessor, while ignoring the previous contractual and financial obligations.
These occurrences are not covered in the white paper and need to be regulated, the CBMS said.
The CBMS is the representative body of condominium administrators in Malta and is headed by Andrew Xuereb, assisted by Joanna Xuereb, Yosef El Khatib and lawyer Ryan Falzon. It was set up last year to participate in the government’s consultation process on the reform of the Condominium Act.
Following its own extensive consultation process with various stakeholders over the past year, CBMS published a detailed proposal for condominium law reform, addressing the various issues and shortcomings.
“This proposal is part of MDA’s wider commitment to improve the quality of life of residents living within complexes of apartments,” MDA president Michael Stivala said.
The white paper as proposed by the government also requires administrators to acquire professional and property insurance for the common parts, have a clean conduct, possess at least a school-leaving certificate, and to have obtained specialised training related to condominium law, finance and property management.
A single person often serves as an administrator for scores of blocks and inevitably fails to provide a good service
The CBMS believes this is not enough. The administrator should also be required to make sure they have enough resources to manage the building and bear responsibility for their work, it said.
“There are often circumstances in which a single person serves as an administrator for scores of blocks and inevitably fails to provide an acceptable and sufficient service,” CBMS head Andrew Xuereb said.
Sanctions and deterrents
CBMS lawyer Ryan Falzon added: “We are also proposing the government introduces sanctions against administrators who break the law and disregard their obligations, and we want to empower the regulator to suspend them and strike them off the register if need be.”
Such sanctions would not only act as a deterrent to avoid fraud and gross negligence but would prohibit blacklisted operators from cheating further consumers.
The CBMS also pointed out administrators often struggle to know who owns the units in a block, and therefore to enforce the rules and collect the money owed.
It said the law should oblige owners to notify the administrator whenever the units change ownership and be subject to fines if they do not.
First enacted in 1997, the Condominium Act regulates the legal relationships between residents and owners who share common parts in buildings or estates.
But the urban landscape has changed drastically since then with a drastic increase in population, and more people are now living in apartments rather than houses.
This meant that the Condominium Act needed to be updated to reflect the new realities and address legal loopholes in a system where an ever-growing number of people live in properties with common parts.
CBMS said the law should clearly establish whether maisonettes should bear the same share of expenses as other apartments in a condominium, as they are often the subject of many disagreements and litigations.
It is also urging the government to define the administrator’s role more clearly, and to address impracticalities in the way unit owners vote on condominium decisions.
Administrators sometimes also fail to enforce rules and money collection, essentially allowing common parts to fall into disarray, it said.
Another important issue is the safekeeping of funds belonging to condominiums, Falzon said.
“We believe administrators should be bound to operate segregated accounts for each condominium they manage,” he said.
Xuereb said the industry impacts the lives of thousands of families and the relationships with their neighbours within their block.