draft
PROJECT
On Support to Apartment Building Management
(Concept Paper)
1. Introduction
1.1. The project on Support to Apartment Building Management (hereinafter to be
referred to as Project) was prepared based on the provisions and requirements of
the RA Law on Apartment Building Management and the Law on Condominium
Associations.
1.2. This is a long-term project and provides for a number of supporting measures
geared at implementation of mandatory norms of maintenance of apartment
buildings, as well as at the formation of managing bodies of apartment buildings
and creation of necessary conditions for further development of the sphere.
1.3. Given the socio-economic situation in the country the Project envisages
improvement of the housing maintenance and consumption properties and
provision of the 'State-market' feedback.
1.4. The Project purpose is to support the managing bodies of apartment building
created by the building owners from the State and other extra-budget resources.
2. Analysis of the current situation
Housing is the biggest and one of the most important sectors of the RA economy. Housing
covers significant fixed assets, including the housing stock with 67 million square meter surface
area with estimated value of around USD 6-7 billion. 27 million sq. m. is covered by apartment
buildings, 96% of which is privatised and is owned by citizens. The rest is shifted under the
disposal of local governments.
The economic reforms in the housing sector that took place during the recent years, viz. mass
privatisation of apartment buildings, transfer of housing service delivering companies from State
to local governments, their reorganization into jsc as a result of denationalisation, have
introduced certain changes into the ownership structure of the housing sector.
Privatisation of the housing stock required reorganization of its management system. As a result
apartment owners or condominium associations were selected as the most effective form of
management.
The process of condominium formation in Armenia started in 1995 with the RA Government
Decree 295 on Approval of the Condominium Charter and the further adoption of the Law on
Condominiums.
To ensure the proper enforcement of the law a number of decisions were adopted. They were
aimed at supporting the process of condominium formation and formation of corresponding
managing bodies (about 600) which were called to collect fees from owners to ensure the
maintenance of the building.
However introduction of the new management model failed to duly promote maintenance of the
housing stock and improvement of the services, due to the gaps and flows of the law adopted in
1996, the lack of clear definition of ownership and separation of responsibilities, as well as other
subjective and objective factors.
One of the objective reasons was the very high cost of economic structure of the housing
maintenance which was developed prior to transition to market relations (currently this required
great investments to bring the housing to normal technical condition) as well as the lack of any
experience in the field of management.
1
As a subjective reason one may state the owners old mentality and their attitude maintenance of
the property in common use. Another factor was the lack of any State support guarantees.
Considering solution of apartment building problems as a priority and the experience of the past
years, new laws were elaborated and adopted in 2002, viz. the Law on Apartment Building
Management and the Law on Condominiums. Relevant amendments were made to the Civil
Code.
The main purpose of the above laws is to improve the housing management system and thus
increase the apartment building maintenance level.
To ensure effective organization of the apartment building the role of managing bodies, based on
market relations, becomes extremely crucial.
The outcomes of the current situation analysis make it a key importance supporting and
strengthening managing bodies of apartment building. This will enable for the initial phase to
better and quicker integrate into the newly developed economic relations.
3. The Goal of the Project
The goal of the Project is to provide State support to apartment buildings in order to strengthen
the managing bodies. This will enable improving the quality of building maintenance and of the
delivered services on the one hand and change the mentality and attitude of owners to the
building common property on the other hand.





4. Principles of implementation
At the expense of State means and other resources support the management of apartment
buildings by implementing a number of activities and tasks
Monitoring of implemented activities
Providing transparency and access to the information on the implemented activities and
the outcomes
Encouraging participation of needy families in the repair activities of the building
Increase of the role of owner's participation in the apartment building management
In addition, given the wide variety of problems in the sphere of management, from technical and
financial support standpoints, two approaches will be used:
 Support to owners of the building to found a managing body
 Strengthening of managing bodies
This will enable ensuring better results by working in parallel and addressing problems of
apartment building management.
5. Activities to undertake
The Project will be implemented in two directions: technical and financial support, in accordance
with activities introduced in Annex 1.
6. Project financial support
The Project will be funded by the State and other non-budget resources.
The State resources will be mainly directed at the implementation of the financial support
component of the Project, including repair of the common property (roof, staircase, elevator,
engineering nets, etc.), installation of meters and other devices.
Selection of buildings to be included in the financial support of the Project will be tender-based.
The main criteria in selecting the building will be the mandatory financial input of the building
owners as well as the number of residents who receive family allowances.
2
The technical support Project will be implemented mainly with the assistance of donor
organizations.
Based on the results of the Project implementation trends and directions of further development
of the apartment building management sphere will be outlined.
3
draft
GOVERNMENT OF THE REPUBLIC OF ARMENIA
DECREE No
September 2002
ON APPROVAL OF THE CONCEPT PROJECT ON SUPPORT TO THE APARTMENT
BUILDING MANAGEMENT
--------------------------------------------------------------------------------------------------------------------------
Based on the provision of the RA Law on Apartment Building Management and the RA Law on
Condominiums the Government of the Republic of Armenia herewith decides to:
1.
Approve the concept project on support to apartment building management (see
attached)
2.
Define, that issues on delivery of support to apartment buildings by bodies of public
administration and international organizations shall be coordinated by the Ministry of
Urban Development.
3.
The Ministry of Urban Development, the Ministry of Finance and Economy shall:
a. Suggest delivering support to apartment building management in accordance with
provisions of the Project approved by this Decree, when conducting negotiations with
foreign states, foreign associations and international organizations
b. Undertake necessary measures within the framework of cooperation with the World
Bank aimed at preparation of different projects to support apartment building
management.
4.
The Ministry of Finance and Economy shall:
a. When preparing the RA annual State budget drafts, discuss allocation of required financial
resources in accordance with provisions of the Project approved by this Decree.
5.
The Ministry of Urban Development shall:
a. Based on the outcomes of the Project on support to apartment building management
and if required, submit to the RA Government recommendations on further
development of the apartment building management.
b. Jointly with the Ministry of Justice and National Statistical Department within one
month, review the need of changes in the current forms of reports in order to reflect
the Project implementation process.
c. Provide media coverage on regular basis providing information on activities aimed at
formation of managing bodies as well as on the results of the process.
4
Annex 1
LIST
Of activities ensuring implementation of the concept project on support of apartment building management
Type of support
I.
Technical
assistance
Activity
1. TA aimed at foundation of managing bodies
 Preparation of charter documents
 Preparation of first meetings
 Registration of managing bodies
 Preparation of the first budget
 Preparation and dissemination of a manual on apartment building
management and managing bodies
 Preparation and dissemination of a manual on mandatory norms of
maintenance of apartment building common property
 Media coverage and promotion
2. Training of managing bodies
 Preparation of training courses
 Preparation and delivery of accounting training
 Exchange of experience
3. Support to local governments in performing the inspection of the housing
maintenance
4. Support to authorized State bodies in performing the inspection of the
housing maintenance
Timeframe
2002-2007
2002-2007
2002-2005
2002-2005
Main implementers
Ministry of Urban
Development
Marzpets
Yerevan Mayor
Ministry of Finance
NGOs and donors
Ministry of Urban
Development
Marzpets
Yerevan Mayor
Ministry of Finance
NGOs and donors
Ministry of Urban
Development
Marzpets
Yerevan Mayor
Ministry of Finance
NGOs and donors
Ministry of Urban
Development
Marzpets
5
Yerevan Mayor
Ministry of Finance
NGOs and donors
5. Improvement of the legal framework
 Preparation of required by-laws during the implementation of the
Project
2002-2005
6. Introduction of housing and utilities allowances as part of the acting system
of family allowances
7. Support in organization of service-delivery through managing bodies
 Organization of tenders
 Collection of fees
 Preparation of model contract forms
 Preparation of business plans
8. Support to NGOs involved in the housing sphere
II. Financial assistance
1. Financial assistance to apartment buildings managing bodies
 Repair of common property (roof, staircases, elevators, engineering
structures, etc.)
 Installation of meters and other measuring devices
 Activities of thermoinsulation of the building
 Possibilities to make use of loans and grants
2003-2005
Ministry of Urban
Development
Ministry of Justice
Donors
Ministry of Urban
Development
Ministry of Social
Securities, Ministry of
Finance and donors
2002-2007
RA Marzpets
Yerevan Mayor
Ministry of Urban
Development
Ministry of Finance
NGOs and donors
2002-2007
Ministry of Urban
Development
Ministry of Finance
Donors
2002-2007
Ministry of Urban
Development
Ministry of Finance,
Donors
6
2. Support in the process of allocation the land under th building to owners
with the right of ownership
2002-2004
Ministry of Urban
Development
Ministry of Finance
State Cadastre
Department, donors
7