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by Christopher A. Wijeyeweere

Director, (UN-HABITAT Activities), Ministry of Housing And Construction Industry, Eastern Province Education and Irrigation Development and the former General Manager of National Housing Development Authority

The most essential element of a condominium is its operational entity, which has been classified as the Management Corporation under the relevant Laws, governing the development and Management of Condominium.

With the acquisition of title to a condominium parcel a unit owner automatically becomes a member of the management corporation that is empowered to manage and maintain the common elements of the condominium, and certain other areas of the condominium property beyond management and maintenance duties.

However, the management corporation could exert a relatively high degree of control over the property use rights of a unit owner as compared to the rights of the owner of a single-family dwelling.

Thus it is necessary on part of the unit owners and all concerned to explore the roles, powers, functions and duties of the Management Corporation in terms of the apartment ownership Law and the Condominium Management Authority Law.

The unit owners of Condominium Apartments may consider this article as a guideline if they so wish to use it in the formation of their Management Corporation to make their living healthy, Happy and to have a peace of mind in their day to day living. Discipline among the members of the management corporation is important and essential in achieving their aspirations for a better living.

Condominium ownership

It is required to understand how an organized community functions and how it can serve its own community. It is important to understand the condominium concept. The term "condominium" refers to a form of property ownership rather than a type of architecture.

The condominium Unit Owner, like the owner of a detached single family home, is the sole owner of his home holding title to it. But, in addition, the condominium Unit Owner holds an ownership interest in other property including the land upon which the entire condominium is developed, the parking facilities, gardens, recreation areas and other community facilities and property.

The property owned in common is called the Common Elements. Each Unit Owner's share of ownership has to be set forth in the agreement by the unit owner with the management corporation.

Unit owners ownership interest in other property as stipulate under the Aprtment Ownership Law

Undivided Interest - The ownership interest each owner has in common elements cannot be separated out from his ownership interest in his unit.

Thus, the share of common elements ownership is characterized as an undivided interest. It is this ownership of an undivided interest in the common elements, which distinguish condominium ownership from other forms of property ownership.

Percentage Interest - The ownership of an undivided interest in the common elements called a percentage interest, also gives the Unit Owner the right to participate in the control of the Management Corporation.

The obligation of each Unit Owner to pay a defined share of the expenses of operating and maintaining all of the common elements is computed according to the percentage interest. (eg. Manner of usage; say common car park and other facilities provided)

Limited Common Elements - Certain common elements can be designated as limited common elements. A limited common element is a portion of the common elements set aside for use by less than all of the Unit Owners. In most cases, a specific limited common element is for the use of the owner of just one unit. This facility may be set forth in the condominium Instrument.

Reserved Common Elements - Some common elements may be designated as reserved common elements. A reserved common element is a portion of the common element that may be set aside for use by any number or all of the Unit Owners by the Council of the Management Corporation.

A reasonable fee may be charged for use of a reserved common element and use must be in accordance with rules established by the Council (e.g. the community centre, reception hall, common car park, tennis courts, badminton courts etc., or swimming pools if any).

Management Corporation

Management Corporations have derived its legal status under the apartment ownership (amendment) Act No.45 of 1982. The duties and the powers of the Management Corporation have been clearly laid down in the statute. Management Corporation is responsible for governing the condominium.

Each unit owner has a vote in the management corporation proportionate to the percentage interest assigned to each unit. The Management Corporation is administered by the members of the Council, as "trustees" for each Unit Owner's interest, and the Common Elements.

In fulfilling the role of the Management Corporation, it acts as both a business enterprise and a regulatory agency. As a business, the council of the Management Corporation must concern itself with efficient operation of the condominium, maintenance of the condominium property, and corporate assets, revenue and expenditures, employee's relations and insurance.

In its regulatory role, the Management Corporation provides for utility services, Garbage disposal, security, road maintenance and covenant enforcement.

The enforcement of covenants are through the imposition of fines and penalties. Even the collection of property rates and taxes on behalf of the local authority is possible.

The ability of the Management Corporation to control the use of the condominium property, including the uses to which the interior of the unit may be put, apparently raises the Management Corporation to a level analogous to a Local Authority.

It is important for Management Corporations in Condominiums to establish the order of priority of Laws and other relevant documents to ensure the successful operation of its activities. The order of priority could be suggested and listed out as follows:

a) National constitution and relevant statues. b) Relevant Statues of the Provincial Council. c) Condominium Management Authority Law and its Regulations. d) Local Municipal or the relevant Local Authority ordinance and relevant by laws. e) Declaration of condominium. f) Constitution of the Management Corporation. g) Resolution and by-laws of the Management Corporation.

The general membership of the Management Corporation (unit owners) should take every effort to comply with a code of ethics while been occupants of the condominium. A discipline community wills always respects the comfort and the happiness of their neighbour.

Therefore the Management Corporation by passing a resolution should compel each and every unit owner to sign an agreement with the Management Corporation that would lead to peaceful co-existence and friendly relationships among the members of the community.

Powers of the Management Corporation

The Council members of the condominium Management Corporation is responsible for making policy and ensuring overall supervision of the corporation. The officers, agents and the employees are responsible for the execution of policy and the day-to-day operations of the Management Corporation.

The members of the council, in discharging their duties, must act in good faith. Management Corporation should take lawful steps in the enforcement of by-laws.

All by-laws, regulations of the corporation should be ratified by the general membership in the form of a resolution and may only be amended by a majority of the members of the Management Corporations (Unit Owners) (preferably with a (2/3) two thirds majority) No by-law shall be capable of operating to prohibit or restrict the assurance of any unit or destroy or modify any servitude expressly or impliedly created under the apartment ownership Law. A copy of every by-law made by the management corporation should be lodged with the CMA.

The management corporation shall appoint a numerous standing committees to serve in an advisory capacity to the council, such committees shall include the following.

1. Finance, 2. Maintenance, 3. Security, 4. Communication, 5. Legal, 6. Front desk, 7. Garbage etc. and 8. It is important to have a covenants committee.

The Council shall appoint a management agent and the necessary officers to carry out the day-to-day management of the condominium complex.

Management Corporation should adopt necessary resolutions for the holding of annual and special meetings, common expenses, insurance, restrictions on the use of units and common elements and numerous other matters effecting the occupancy and the operations of the condominium.

Duties Of The Management Corporation

Management Corporation is responsible for providing many services to the owners and occupants of the condominium complex. These responsibilities include the proper maintenance of common elements and keep them in a good state of repair. These activities will cover the following areas.

Grounds

Responsibility for grounds includes seeding, fertilizing, mowing, trimming, mulching, pruning and planting on the common elements of the community. Grounds maintenance also includes cleanup of the grounds and the removal of plantings that have not been approved and many more areas of activity deemed necessary in the openion of the management corporation within the framework of the Law.

Building Maintenance

This service includes roof and gutter repairs, exterior painting and masonry repairs, repairs to the side walls, streets and kerbs, repair and maintenance of the recreational facilities, lighting repair, painting exterior portions of entrance doors etc.

With some exceptions, all exterior maintenance is the responsibility of the Management Corporation. Tenants/owners are not permitted to paint, alter, install plants or otherwise perform any work on the exterior of any building or the grounds unless the proposed changes have been approved by the Management Corporation.

Painting, altering or otherwise perform any work on the balconies, decks or hallway should not be permitted. If the tenant/owner notice an item, which requires service, or appears to be a violation of the design standards, they should notify the Management Corporation Office to enable the Management Corporation to take prompt action against such unit owners.

Trash Removal

The Management Corporation should undertake trash removal. Trash is to be picked up on given dates. The unit owners are made responsible for dumping their trash to the given collecting point as directed by the Management Corporation.

Unit owners in general should ensure that all organic material (eg. Fruits, meats etc) are put in the disposaland avoid solid objects (eg. Cans, glasses etc) been put in the disposal. Paper items should not be thrown around the complex since these items will block the drains. Finally the unit owner must refrain from putting liquid or chemicals and cleaning agents in the disposal.

Pest Control

It is best that the Management Corporation make arrangements to provide proper and effective Pest Control Treatment to its condominium complex. This will curtail unauthorized people engaged in this business using toxic material injurious to occupants.

Covenants Committee

The Council should appoint a strong Covenants Committee. This committee must review and approve all changes to the exterior of the buildings, the limited common elements, or any common element.

The Covenants committee should deal with the most fundamental property rights of the Unit Owners. (Its activities and responsibilities have to be clearly defined by the Management Corporation and authority must be given to this committee by passing a resolution by the general membership of the corporation.)

The Covenants Committee should have the authority to prevent a Unit Owner from taking actions which are inconsistent with the general plan, design, or appearance, use or maintenance of the common elements, or limited common elements.

The Committee should be in a position to interpret the condominium declaration/instruments, the rules and regulations or the resolutions of the corporation when requested to do so. Appeals against the decisions of the Covenants Committee may be forwarded to the Members of the Council. (a set of regulations should be drafted to give effect to the above)

Establishment of the Management Fund

The Management Corporation shall established a fund under the Apartment Ownership Law for Management expenses for the purpose of controlling, Managing and administering the common Elements, payment of rent rates and preminiums of insurance and discharging any other obligation of the Management Corporation.

The Management Corporation for the purpose of establishing the Management fund may at a general meeting raise the fund requirement by levying Contribution on the owners of all the units in proportion to the share of their respective units and also the management Corporation should determine the amount of interest payable by the owners of units in respect of late contribution.

How the services are funded Condominium Out Goings

The Management Corporation administers many of the services provided for the residents of the condominium apartments. Each year, the Council of the Management Corporation with the assistance of the Condominium Management Authority as laid down under the statue should compile the annual budget containing estimated operating expenses to be met in the coming year based on the services and programmes offered.

The Council must also include in the budget adequate funds or reserve to cover unforeseen expenses, working capital and major repair or replacement of common elements. Operating expenses and reserves together should make up the common expenses. Property rates and taxes to the local authority also can be included in this or allow the owner to pay independently/individually.

The common expenses, multiplied by the percentage interest, could be the annual levy on each unit (to be decided by the Management Corporation). These out goings should be approved by the general membership and made payable in twelve (12) monthly installments. Each payment should be made due on a day determined by the Council.

Charges On The Individual Unit Owner

Although normal common expenses are apportioned are payable in their entirety by individual Unit Owners. E.g. If a unit owner has a limited common element appurtenant to his unit, the Council may impose a levy on those Unit Owners for the cost of maintenance and repair.

If any additions, alterations, or improvements to the common elements are requested by certain Unit Owners and benefits only those Unit Owners, the cost of the additions, alterations or improvements may be charged solely to the benefited Unit Owners.

Delinquency Procedures/Policy on Late Payments

All Charges Assessed against a unit will have a legal claim. The out goings or charges are not paid when due; the Management Corporation may exercise legal remedies available under the provision of the apartment ownership law and under the CMA Law.

In such cases Unit Owner can be deprived of the common amenities that the Unit Owner enjoy as an alternative to legal action. (A resolution to this effect has to be passed by the general membership defining the amenities to be with held) Delinquency owners should be notified by the Management Corporation when their accounts are delinquent in terms of apartment ownership Law.

Insurance Coverage

The Council has to obtain insurance coverage to protect the Management Corporation and to a certain limited extent, the Unit Owners as individuals. The management Corporation may decide the type of policy.

However, each building, including the units, be covered by risk of fire, property damage, civil commotion insurance. This coverage shall not insure personal property belonging of a Unit Owner (furniture, decorations, belongings etc). Appliances and fixtures owned by and coming within the purview of the Management Corporation should be covered by a condominium insurance policy.

The condominium insurance policy should cover the unit in the condition and the status it was when the unit holder took title. This policy should not cover the contents nor betterments and improvements. Betterments and improvements mean generally those items, which are fixed in such as wall finishes, fixtures, and cabinets etc., which are installed by the unit owner after settlement.

If the unit holder requires insuring the betterments and improvements, the Management Corporation should provide such coverage at an additional premium with the undertaking that the unit owner is willing to pay the additional cost incurred to the Management Corporation. (a resolution pertaining to this also should be passed by the general membership)

Liability Insurance

The Management Corporation and the individual unit owners also should consider insurance against liabilities arising from the use of the common elements. The Council of the Management Corporation should consider and also maintain appropriate workman compensation insurance as necessary and fidelity coverage to protect the corporation finances.

Unit owners securing their own insurance must do so in conformity with the rules and regulations (Regulations to be drafted) to avoid conflict between the unit owner and the corporation policies.

Management Staff The Management Corporation should preferably obtain the services of the condominium Management Authority (CMA) to act as their managing agent.

CMA who is appointed to function as the managing agent should provide professional management including contracting and engineering services, accounting, financial reporting, including preparation of annual budget and the preparation of an annual Implementation Plan (AIP).

The management agent so appointed shall be responsible for the day-to-day operations of the condominium housing schemes or the apartment Complex under the guidance of the council of the Management Corporation.

The office staff of the Management Corporation should maintain all records of the corporation and should coordinate various scheduled maintenance items, enforce covenants, administer the budget etc for the entire condominium complex under their purview.

The services provided should include trash collection and garbage removal in other words a streamlined and well-coordinated system should be adopted for the Management of solid and liquid waste. Ground keeping (i.e. raking, mowing, weeding, watering, sweeping etc.,) Maintenance of the common user passages, reception halls, common visitors rooms, laundry rooms if any, tennis courts, badminton courts and swimming pools if any etc.,

Engineering services should include maintenance of common elements, pipes, electricity supply etc., storm water drainage blocks, damages to common elements etc.

There are other services that the Management Corporations with the approval of the general membership could provide like personalized services to its unit owners by establishing a reception desk, intercom telephone network, and security services if required by the general membership.

The expenses for professional management and staff salaries should be divided among the unit owners on the percentage representation. Additional facilities for the occupants/ unit owner Resident Information The management corporation should maintain informal records containing the name, address, business and home telephone numbers of the unit owners and the occupiers.

Front Desk/reception Responsibilities

Unit owner may contact the front desk/reception when they move in or move out of the unit. Front desk personal should monitor the security personal if employed by the management corporation.

Front desk reception personal also will have the responsibility of announcing visitors and trade personnel if intercom network is provided by the management corporation. Only those occupants authorized by the management corporation will have to be provided with these services.

Management Corporation also could make arrangements for the unit owners to leave the keys of the housing unit at front desk/reception for the use of the personal nominees by the owner by filling up an admit slip giving instruction as required. (Method of transactions could be adopted by the management corporation)

Security

Security services could be provided by the management corporation on contract. The methodology would be worked out in consultation with expert security firms willing to provide their services.

However, its established that occupation is the best defence against burglary. Thieves do not want to take time or the risk of burgling or to burgle an occupied home. All occupants should be advised to install home burglar alarms individually or though the Management Corporation.

Key Controls

The Management Corporation with the concurrence of the general membership and with an agreement with the individual unit owners could adopt key control systems for emergency purposes like gas leaks, fires, electrical -shorts etc. a duplicate copy of the keys may be kept by the Management Corporation under security lock.

In unit service programmes

Management Corporations also could provide an in unit service programme by attending to minor repairs and maintenance work of individual units for reasonable fee as a service as well as a business proposition.

Installation of smoke detectors

The management corporation in concurrence with the general membership could install smoke detectors for housing units and fire extinguishes.

General Services Utilities

Electricity, water and sewer are common services. Electricity and water will have to be separately metered while retaining the bulk supply with the management corporation. Any additional expenditure on sewer disposal or any other utility service, Management Corporation shall charge the unit owners according to the percentage ownership they own.

Plumbing

If the plumbing installations become defective owner should contact the plumber or get the services of the management corporation under their service programme.

The unit owners/occupant of the condominium apartments should realize and understand their duties and responsibilities towards their community where they live in.

Discipline and mutual understanding, cooperation among and between the unit owners/occupant and the management corporation would make their living happy, healthy and have a peace of mind in attending to their personal and family matters.

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