On 8 June 2015 the President of Ukraine signed Law of Ukraine No. 417-VIII "On Peculiarities of Exercising Ownership Rights in Multi-Apartment Building" (the "Law"), which becomes effective on 1 July 2015.

The Law is aimed at (i) resolving multi-apartment building (the "Building") management issues in a Building where a co-owners association (the "OSBB") has not been established and (ii) improving the legislation on OSBBs. Baker & McKenzie acted as a legal advisor for the development of the Law.

Forms of Building management

The Law provides for the following forms of Building management:

  • by owners themselves;
  • by a manager on the basis of a relevant agreement;
  • by establishing OSBB or an association of OSBBs.

New decision-making mechanism

The Law establishes a clear procedure for convening, holding and adopting decisions by the general meeting of co-owners of the Building, where OSBB has not been established.

Currently, the consent of all co-owners of the Building is required to adopt any decisions on management of Building joint property. After the Law becomes effective, most of the decisions will be adopted by the owners of apartments and non-residential premises, the total area of which exceeds 75% of Building premises' area. Resolving some issues, including determination of the manager of the Building, will require the consent of owners of apartments and non-residential premises, the total area of which exceeds 50% of Building premises' area.

If the number of votes is not sufficient for the adoption of the decision by the general co-owners meeting, a written questionnaire of owners who failed to participate in the meeting may be prepared. The results of such questionnaire are considered in the vote final count.

Thus, the co-owners will be able to make decisions on all major Building management issues.

Improvements in OSBB legislation

The Law also changes the regulation of OSBBs. In particular, the Law improves the procedure to hold OSBB constituent and general meeting, specifies the exclusive competence of the general meeting and changes the procedure to adopt and publish decisions thereof.

Expected consequences

The changes introduced by the Law are expected to improve the effectiveness of Building management regardless of having an established OSBB. Improvements to the decision-making mechanisms will allow the co-owners to make decisions on all Building management issues efficiently.