Today, there are a whole lot of apartment buildings, which, so to speak, are getting old. The entrances to these buildings have no windows, the elevators do not work, the roof is worn out, the staircases are broke, or the garbage chutes are worn out. To address these problems, we can constantly hear the same argument. The head of condominiums tell the residents that there is no money. In fact, if there is a wish, there can be money, and the residents’ common areas in use are possible for capital repair, only the resident should also have its part of involvement in this process. To address the problems of the apartment buildings, first we need a strong and reliable condominium, a high level of payment by residents and so on.
“Habitat for Humanity Armenia” foundation organized a two-day conference with participation of local and some European countries’ experts in the industry of apartment buildings management.
The conference was attended by the experts from a number of countries cooperating with Visegrad Fund: Poland, Hungary, Slovakia, Czech and Ukraine, who presented their countries’ experience on how to organize the management of condominiums with civic involvement. The conference also discussed the situation in Armenia and it was discussed what elements could be applied in our country from the experience of the countries represented.
One of the most important issues of how to raise money for renovation of buildings. There are countries where the government provides some subsidy, and there are countries where the condominiums have the opportunity to receive state grants, as well as take loans from the banks, of course, on the condition of mutual repayment with the residents. So far, there is only one bank in Armenia that provides loans to condominium, the latter gets the credit by the letter of attorney issued by the residents, accordingly, the residents sign a document with which they assume an obligation, let’s say in the course of three years, to mandatorily make the residential fee. In fact, the loan funds can be used to address various problems. But Project Director of “Habitat For Humanity Armenia”, Karine Mayilyan, in the conversation with us, introducing her plans, said that banks need a reliable and solvent condominium, this implies at least 70 % level of payments by the residents.
Often, according to Ms. Mayilyan, receiving a letter of attorney from the residents of one building and getting relevant documents lasts a few months. The residents have difficulty to sign a document, with which they are bound, let’s say, to mandatorily make their payments for another 3 years. These are not huge amounts. The matter is, as stated by Ms. Mayilyan, that the apartment building residents must be interested for their condominium to receive loan, and if it has received a loan to repay in 36 months, about 4-5 million drams, a lot of work can be done in this building, and repay the loan in the course of these months little by little. Whereas, currently, like in many other buildings, it is impossible to conduct serious work with the money collected from the fees, at the best, the entrance is painted or a door is installed.
The expert of “Urban” Sustainable Development Fund, Irina Vanyan, who cooperates with the “Habitat”, in the conversation with us, told that first, a condominium-resident mutual trust should be developed, especially with regard to payments. Today, this trust is nowhere. Ms. Vanyan said that the RA Law on “Condominiums” is a good one, for example, the resident must ask for a report from the condominium on what the money paid by him is spent. But, today, the apartment fee defined for 1 square meter is low, it is even unknown of how and who have defined this rate. The law says that any decision is taken at a joint meeting with the residents, which, can be said, does not take place with almost all condominiums. The expert says that the residents should also discuss the size of the collected amount at these meetings, and these amounts are subject to change, let’s say, they come together and decide that this year they will repair the roof of their building, for which the monthly fee should be a little more.
How to motivate residents to contribute to the common area in use in their building? Expert of Energy Efficiency and Housing, also Director of Foundation to Save Energy (ESF), Astghine Pasoyan, said that “Habitat” has already established such a precedent that has been implemented in energy saving projects in a number of buildings in Yerevan and Vanadzor. As presented by the expert, the condominiums that had signed a memorandum with “Habitat” and had received a loan from the bank, the municipality had supported them and subsidized the loan, and it did not cost a lot to the resident, but in this case, too, the residents are obliged to make regular payments. For large-scale works, the condominiums need more money, but also, as said by the expert, the condominium managers should also gain the trust of the residents with their good work, and when the resident sees that this manager solves problems, the collection of fees will also rise. “The role of the state is very important, because in the countries where success is registered, the state had its part of involvement, it was a co-financing. So far, our residents are not ready for a 100% loan, in other words, they pay the loan in full, do a work in apartment buildings and pay loan interests. In our country, the money is still very expensive. The government should pay attention to this issues,” said the expert. Ms. Pasoyan mentioned that the Law on “Apartment Building Management” needs to be amended. The Law on “Condominiums” is a good one, but in some cases, 10 drams defined for 1 square meter is a mistake, this is a trivial amount of money, in addition, the management and maintenance fees must be separated. The expert mentioned that we also need to think about applying the European experience in our country, for instance, to establish an accumulative fund for the so-called “rainy day”. In other words, if all of a sudden, a pipe blows out, and the collected money is not enough, then they can use these funds.
“Habitat for Humanity Armenia” Project Director Karine Mayilyan mentioned that the first direction of the Foundation is the implementation of micro-financing services through loan organizations. Thus, using the coverage of loan organizations throughout the country, loans for low-income households are involved and address them to improvement of housing conditions. This loan program is specifically designed for low-income households, and the repayment of this affordable loans does not exceed 30-40% of revenues of these households. Thanks to this program of the Foundation, many household were able to repair the apartments. In many rural areas, people did not have kitchen and a bathroom, or the toilet was outside. Supported by the Foundation, such household received affordable loans and built a kitchen and a bathroom, changed the windows or did another construction work.
The other program of the Foundation is aimed at renovation of apartment buildings. For example, installing an energy saving system in apartment buildings. This is quite beneficial for the residents, especially after electricity and gas price rise, the residents can save enough money. However, to make the buildings energy-efficient, the condominium does not have the required amount of money, and the residents should have an extra involvement. And the additional payment does not actually “hit” the pocket of the resident. The residents are making these additional payments from the savings incurred from the energy saving program.
As presented by Ms. Mayilyan, if insulation is made only in the entrance to the building and the windows are placed, of course, this is also energy saving, but the efficiency will be higher if the residents work on thermal insulation of the outer walls of the building. As a result, according to Ms. Mayilyan’s data, the energy saving reaches up to 40-50%, that is, each apartment will save 15-20 thousand drams per month, and instead of paying 15-20 thousand drams for the electricity or gas, it would be more profitable for the residents to direct it to the loan, which they can obtain through the condominium, and do the thermal insulation of the building. In fact, the loan repayment period is 4-5 years, while the extra payments for gas and electricity would hardly be by 4-5 years.
To make the resident- condominium relations be effective, the apartment buildings management system be strong, the residents be the owner of his payments, the condominium be accountable for its work, some drawbacks must be amended in the legal framework. Ms. Mayilyan assured that some elements of the international experience introduced during the 2-day conference are possible to apply in the system in Armenia. “We will start working on the package of recommendations and will send the legislative reform package to the interested parties for preliminary consideration. Then, we will work with condominiums, municipalities, and urban ministry, and will discuss with them, will receive final remarks and probably, in the spring, we will submit the core package to relevant authorities to call it to life.”
Note that “Habitat for Humanity Armenia”, supported by Visegrad International Fund, is implementing “Strengthening Civil Involvement in Condominium Management in Armenia” project aiming to improve the legislative and political environment for the implementation of effective management of condominiums in Armenia. Under the project, “Habitat for Humanity Armenia” cooperates with Visegrad countries and six organizations operating in Ukraine. The regional conference was organized in the framework of this project. The regional conference agenda was to create a knowledge-based civic platform based on the experience of V4 countries and Ukraine, and come up with legislative and policy improvement recommendations on apartment buildings management in Armenia.
M. GHAZARYAN
