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LAW ON THE ASSOCIATIONS OF MULTI-FAMILY APARTMENT HOUSE OWNERS, Law I-798 (21 February 1995) (unofficial translation)

I. GENERAL PROVISIONS

Article 1. Definitions

As used in the Law:

premises means residential premises (apartments, rooms) and premises used for non-residential purposes (workshops, offices, shops, shelters, warehouses, etc.);

communal-use premises means premises that have not been assigned to individual owners (corridors, stairways, attics, basements, semi-basements) which have no direct functional links with the premises of individual owners;

communal-use engineering facilities include water and sewage pipes, gas main and hot-water system up to the fittings in the premises of communal use and in the premises belonging to individual owners, electricity meter cupboards, lifts, ventilating chambers, collective TV antennae, boiler rooms, hot-water heating facilities, boiler houses, etc.;

communal-use house structures include the principal bearing structures (foundation, walls, floors and ceilings) and other structures (roofs, joint balconies, loggias);

house means a separate building connected by joint engineering facilities extending from the foundation to the roof and communal-use premises, and to which a land lot either is or must be allotted.

Article 2. Purpose of the Law

The Law shall regulate the activities of associations of multi-family apartment house owners which hold the property belonging to them by the right of common ownership.

Article 3. The Association of Multi-Family Apartment House Owners and its Status

The association of multi-family apartment house owners shall constitute a method of holding property which belongs to the owners in multi-family housing by the right of common ownership.

The association shall consist of no less than three natural or legal, natural and legal persons who are the owners of house premises.

The association shall be a legal person.

The legal status of the association shall be regulated by this Law and other laws, legal acts and the regulations of the association. Model regulations of associations shall be approved by the Government of the Republic of Lithuania.

Article 4. The Purpose of Establishing Associations

The owners of residential use and non-residential use premises shall establish associations of multi-family housing owners for the purposes of maintenance, repairs and other management and exploitation of the common house premises, common engineering facilities, common house constructions, and for keeping in order the exterior property area (the allotted land plot), discharging common pecuniary liabilities and protecting other common rights and interests.

II.    ESTABLISHMENT OF THE ASSOCIATION

Article 5. Establishment of the Association

The owners of apartments in multi-family apartment houses or the mayor (board) of the municipality shall call meetings of the owners for the establishment of the association. Only one association of multi-family apartment house owners may be established per one or several houses connected by common engineering facilities.

Article 6. Constituent Meeting of the Association

A constituent meeting shall be called for the establishment of the association. No later than two weeks prior to the day of the meeting, the initiative group of the association founders shall notify in writing, the owners of the house premises and the mayor (the board) of the municipality, of the constituent meeting, announcing its agenda.

The mayor (the board) of the municipality must delegate his (its) authorised representative and present the initiative group with the list of owners of house premises and the premises they own; the form of the list shall be approved by the Government of the Republic of Lithuania.

The constituent meeting of the association shall be deemed lawful, if attended by no less than 1/2 of the owners. In the event that the stated number of owners fail to attend, within two weeks the initiative group of founders shall have the right to call a repeat meeting. The repeat meeting shall be lawful if attended by at least 1/4 but no fewer than 3 owners.

The resolutions of the constituent meeting shall be lawful if more than a half of the owners present at the meeting voted in favour thereof. The meeting shall have the right to establish the association of the multi-family apartment house owners and approve the regulations thereof.

Article 7. The Regulations of the Association

The regulations of the association shall regulate its activities, its establishment, reorganisation and liquidation, the rights and obligations of its members, the election of management and control bodies, the procedure for the collection of charges established by the association and the use of the collected money, and other relations connected with the activities of the association.

The regulations of the association must state the following:

1) the name of the association and the address of its location;

2) the objectives of its activities;

3) the bodies management and control of the association, their election procedure, rights and duties;

4) the procedure for calling meetings and voting at them;

5) the procedure for the payment of targeted and accumulative contributions and payments related to the activities of the association, the procedure for assessing non-monetary (property) contributions;

6) the procedure of payment for public utilities;

7) the procedure of accumulation and use of association funds;

8) the rights and duties of the association members, their liability for the obligations of the association; and

9) the procedure of the reorganisation and liquidation of the association.

Other provisions which are in compliance with the laws of the Republic of Lithuania may also be established in the regulations. The provisions of the regulations that are not in compliance with this Law or model regulations shall not be valid.

Article 8. Registration of the Association Regulations

The regulations of the association shall be registered in the town (district) municipality in accordance with the procedure established by the Government of the Republic of Lithuania. The following documents shall be filed for registration:

1) application concerning the registration of the association;

2) a copy of the minutes of the constituent meeting;

3) the regulations; and

4) the list of the owners of premises and of the premises owned by them recorded in the established form.

Within one month of the filing of the documents the mayor (the board) of the municipality must register the regulations of the association and issue plans of land plots approved in the established manner or notify the founders of the association in writing of the reasons for refusing to register. Refusal to register the regulations of the association may be appealed to the municipal council or court in accordance with the procedure established by the laws of the Republic of Lithuania.

Upon registration of the association regulations, a general meeting shall be called for electing the board or the manager of the association and the auditing commission or the auditor.

The regulations of the association, and amendments and supplements thereto shall become effective as of the day of registration. The association shall acquire the rights of a legal person as of the day of registration of the regulations.

Associations (co-operatives) of apartment house maintenance, which were established and registered prior to the coming into effect of this Law must, within 6 months of the day of approval in the Government of the Republic of Lithuania of the model regulations, amend and supplement their respective regulations and file them with mayor (board) of the municipality.

Associations (co-operatives) which fail to file regulations for re-registering within the above time period shall be deprived of the rights of legal person.

Article 9. The Rights and Obligations of the Association

The association shall be entitled to:

1) engage in the activities provided for in the regulations;

2) have accounts with the banks of the Republic of Lithuania and foreign states;

3) hold and use the property belonging to it and dispose thereof;

4) build or reconstruct in the established manner structures required for the needs of the association;

5) obtain credits; and

6) unite with other associations or be reorganised into smaller associations, establish unions of house, apartment owners or join said unions.

The association may also have other rights provided for in the regulations provided that said rights are in compliance with the laws of the Republic of Lithuania.

The association must:

1) maintain and repair houses, their engineering facilities and territory;

2) comply with the rules and norms of technical maintenance of residential use premises, and fire prevention, sanitary and environmental protection requirements;

3) pay the charges and dues established by law, by the appointed date; and,

4) be answerable for its liabilities.

Upon re-registering its regulations the association shall be the successor of the rights, obligations and liabilities it formerly had.

The association may not be the founder of enterprises.

III.   MANAGEMENT OF THE ASSOCIATION

Article 10. The Bodies of Association Management

The bodies of the association management shall be the meeting of the association members and the board or manager of the association.

The meeting of the association members may determine the quotas of representation, elect its authorised representatives, call a meeting of authorised representatives instead of a general meeting and delegate to it a part or all of its rights.

Resolutions of the meeting of the association members and of the association board (manager) on the issues within their competence shall be binding to all members of the association.

Article 11. The Meeting of the Association Members

The supreme body of association management shall be the meeting of the association members which shall have the right to:

1) amend and supplement the regulations of the association taking into account the model regulations;

2) elect and remove from office the board or the manager and the auditing commission or the auditor;

3) determine the amount and procedure of remuneration of the board members (manager) for the work performed;

4) evaluate the activities of the association members, the annual report and the conclusion presented by the auditing commission (auditor) concerning the financial activities of the association;

5) determine the number of the staff and the procedure of remuneration for their work;

6) determine the amount of targeted contributions and contributions related to the activities of the association, the procedure of payment and use thereof;

7) establish the procedure of payment by the owners of residential use and non-residential use premises for the maintenance of the building and public utilities;

8) adopt decisions concerning the disputed issues of membership in the association;

9) resolve issues concerning the disposal of the property and funds of the association;

10) as necessary, invite experts for examining the financial activities;

11) set the internal regulations in apartment house of the association;

12) decide on the issues as regards the joining of unions by the association or withdrawal therefrom as well as issues concerning reorganisation of the association; and

13) resolve issues related to the association activities entrusted to the board provided this is requested by the board.

Article 12. The Procedure for Calling and Organising Meetings

Meetings of the association members shall be called by the board (manager) of the association in accordance with the procedure established in the regulations but no less frequently than once per year. A meeting must also be called if requested by the auditing commission (auditor) or no less than 1/4 of the association members (authorised representatives). The members shall be notified in writing of the forthcoming meeting and its agenda shall be announced at the same time.

A meeting of the association members shall be considered lawful if attended by no less than half of the association members and the meeting of authorised representatives – if attended by no less than 2/3 of the authorised representatives. In the event that the required number of members fail to attend the meeting, a repeat meeting may be called within two weeks, which shall be lawful if attended by no less than 1/4 of the members or 1/2 of the authorised representatives.

The resolutions of the meeting shall be lawful if voted in favour of by more than a half of the attending association members (authorised representatives).

Article 13. The Board of the Association or the Manager

The board of the association or the manager shall be the managing body of the association, directing the activities of the association in the period between the meetings of the association members (authorised representatives). The board shall be elected of no less than three board members for a period not to exceed three years. The number of terms of office of the board members shall not be limited. Employment contract shall not be concluded with the association board members (manager).

Meetings of the association board members shall be lawful if attended by no less than 2/3 of the board members. The resolutions of the board shall be lawful if voted in favour of by more than a half of the board members participating in the meeting.

The association board members shall elect the chairperson of the board who shall organise the work of the board, represent the board and the association.

The board or the manager of the association shall be subordinate to the body which elects them and shall perform all the functions assigned to them.

Article 14. The Rights and Duties of the Association Board or Manager

The board or manager of the association shall:

1) implement the resolutions of the meeting;

2) organise maintenance of the house and its engineering facilities, and the territory;

3) conclude contracts and other transactions on behalf of the association, announce invitations for bids for the performance of contract works of larger scale;

4) employ and discharge employees;

5) draw up plans of the association, build up its budget, prepare reports and other document related to the activities of the association;

6) organise record keeping and maintenance of accounts;

7) when the building is maintained only with the own effort of the association, determine the expenditure of labour of the association members and their family members a well as the procedure for crediting the expenditure against the contributions.;

8) dispose, in accordance with the documents adopted at the meeting of the association members (authorised representatives), of the association funds held in its bank account;

9) resolve other issues; and

10) be answerable for the economic and financial activities of the association.

Article 15. Inspection of the Activities of the Association

The activities of the association shall be inspected by the auditing commission (auditor), the number of members of which shall be established and which shall be elected for the period not exceeding 3 years, by the meeting of the members of the association. Members of the Association Board and persons which are related to the members of the Board (manager) by close kinship or marriage may not serve on the auditing commission .

Having received justified information about the shortcomings of the activities of the Board (or its manager), auditing commission (auditor) shall have the right to inspect the activities of the Board (or its manager) at any time. If the violations are determined, the material shall be submitted to the general meeting for consideration.

At the close of a business year, the auditing commission (auditor) shall conduct a thorough inspection of the activities, provide its evaluation and submit audit findings concerning the financial activities of the association. The Board (or its manager) must present to the auditing commission (auditor) explanations and necessary documents.

State institutions shall be entitled to inspect the activities of the association in compliance with the established procedure.

IV. MEMBERS OF THE ASSOCIATION, THEIR RIGHTS AND DUTIES

Article 16. Members of the Association

Members of the association are owners of the premises contained in the houses. Each owner shall be entitled to one vote in the association. Legal entities (municipalities, enterprises, offices, organisations) shall be represented by a duly authorised person. The owners of the premises of a house shall acquire the rights and duties of the members of association as of the date of the registration of the regulations of the association or as of the date of the occurrence of the ownership rights to the premises in the house belonging to the association. A natural person who is a member of the association may, in the prescribed manner, authorise another person to participate in the activities of the association on his behalf.

If the premises belong to several co-owners, they must agree among themselves who shall represent them in the association. The co-owners' representative shall have one vote in the association.

Members of the association shall be registered in the register book, stating the full name, address (the name and address of a legal entity), the grounds for and the date of the acquisition of property, the space belonging to a member of the association by the right of ownership and its ratio with the total area of the premises of the house expressed in percentage.

Article 17. Changes in the Membership of the Association

A membership in the association shall terminate when the member looses his right of ownership to all residential and non-residential premises held by him in the association.

Upon selling the premises held by him or upon transferring them in any other way, as well as upon his death, the person who has acquired or inherited said premises shall become the member of the association.

If members of the association were in arrears to the association and there is no possibility to recover said arrears from them, such arrears shall be cleared by the successors of members removed from the association.

Premises that are recognised in the established manner as having no owner shall be transferred into the ownership of a municipality. The municipality must settle accounts with the association for all arrears pertaining to the former members, relative to the activities of the association.

Article 18. The Rights and Duties of a Member

A member of the association shall have the right:

1) to attend the meetings of the members of the association, to elect and be elected to the Association Board and auditing commission, to submit proposals on issues relative to the activities of the association;

2) to work in the association under employment contract;

3) to obtain information relative to the activities of the association, its economic condition, assets, resources and charges for public utilities and operation of the house; and

4) to replan and alter the premises belonging to him by the right of ownership.

Member of the association must:

1) observe the regulations of the association;

2) fulfil the obligations of the association and the resolutions of the Association Board and of the bodies of control;

3) participate in the activities of the association;

4) protect and take care of the property belonging to the association;

5) make due payments;

6) ensure that persons who utilise the premises should comply with the regulations of the association and the internal rules of the house;

7) allow to repair the communal - use engineering facilities that are located on their premises, check the readings of measuring devices;

8) refrain from causing damage to other premises, communal-use premises, or communal use-engineering facilities, when replanning, restructuring, or repairing the premises belonging to him;

9) in the event of mortgaging, selling or transferring the premises as a gift or otherwise, notify the association board (manager) and meet his obligations to the association.

A natural or legal person, having acquired premises in a house of the association, must within 10 days notify the Association Board (or its manager) thereof in writing.

V. THE PROPERTY AND FUNDS OF THE ASSOCIATION

Article 19. The Property of the Association

The property of the association shall consist of the residential or non-residential premises, purchased or acquired in any other manner, and other material assets.

Article 20. The Property Held and Utilised by the Association

The communal-use premises in a multi-family apartment house, its communal-use engineering facilities, and communal-use structures shall belong to all the owners of the house by the right of common partial ownership. The share of each owner in the common ownership shall be proportionate to the total area of premises held by him by the right of ownership.

The association shall have the right to manage and utilise communal-use premises, house structures, and engineering facilities.

Upon registration of the regulations of the association, the municipality must, within a 1-month period, convey the multi-family apartment house (houses) to the management and use of the association. The association, having taken over the house, shall decide issues concerning the review of contracts, concluded by the inhabitants with the organisations operating the house, and the conclusion of new contracts of the association.

Article 21. Funds of the Association

The funds of the association shall consist of:

1) targeted contributions (for maintenance, repair, etc.)

2) contributions relative to the activities of the association;

3) income received from the disposal of the property of the association or management of communal-use premises; and

4) aid by the state, municipalities and natural or legal persons, as well as charity.

Members of the association may make non-cash (property) contributions, the procedure for the assessment of which shall be established by the meeting of the members of the association. The funds of the association shall not be subject to taxation.

The business year of the association shall commence on 1 January and end on 31 December.

VI. THE REORGANISATION AND LIQUIDATION OF THE ASSOCIATION

Article 22. The Reorganisation of the Association

The association, following the resolution of the meeting, may merge with other association (other associations) or split up into smaller associations provided each of them may act in a separate house (houses). The regulations of the reorganised association shall be registered with the municipality board in accordance with the established procedure. Upon the reorganisation of the association, its rights and obligations shall pass over to the reorganised association (associations) from the date of the registration of its (their) regulations.

Article 23. Termination of the Activities of the Association

The activities of the association shall terminate when the house of the association is demolished or removed.

The association may be liquidated if the decreased number of its members is less than the minimum number established by laws, or by the decision of the court if its activities do not comply with the laws.

The Board of the Association (or its manger) shall use the existing property and funds of the association primarily for the settlement of accounts with the hired employees, then for the payment of debts to the creditors. The remaining funds and property shall be distributed among the former members of the association pro rata to their contributions.

VII.  UNIONS OF THE ASSOCIATIONS OF THE OWNERS OF MULTI-FAMILY APARTMENT HOUSES

Article 24. Objectives of the Unions of Associations

The unions of associations may be formed for the coordination of the activities of associations and protection of their interests.

Article 25. Establishment and Activities of the Unions of Associations

The union may consist of two or more associations. The unions of the associations of multi-family houses shall act under the agreement concluded by the parties.

VIII. MISCELLANEOUS PROVISIONS

Article 26. The Use of Residential Premises for Business and Commercial Purposes

Residential premises in the multi-family apartment houses, upon obtaining consent of the meeting of the house association (or the board) and with the permission of the mayor (board) of the municipality, and after design documentation has been approved, may be used for commercial, public catering purposes, the needs of law enforcement agencies, communications, medical services, distribution of printed periodicals, and household services (except production services). Such premises must have a separate entrance and their utilisation may not disturb the normal operation of the house and its engineering facilities.

If a separate entrance is not installed, residential premises may be used for other (non-production) purposes according to the spheres of activities approved by the Government of the Republic of Lithuania, and upon notifying the association in writing, only if it is not necessary to reconstruct the premises and to remove them from the housing stock.

Article 27. Settlement of Disputes

Disputes arising between the association and the members of the association, between the association and other legal entities or natural persons, shall be settled by court.

Owners' arrears with maintenance costs and public utilities shall be recovered according to the procedure established by the laws of the Republic of Lithuania.

Article 28. The State Support to Associations

The State and municipalities, being responsible for the preservation of the national property - the housing stock, shall render the following assistance to the associations:

1) grant soft-credits for the major repairs and renovations of houses, giving priority to houses which are deemed unsafe and unsanitary;

2) grant subsidies to socially -vulnerable persons who live in houses which are under repair and renovation;

3) install in the house heat and water measuring devices free of charge;

4) exempt the association from land tax; and

5) other means of support.

For the support of the associations, a special association support fund shall be formed from the revenue of a municipality received from the rent of non-residential premises. For the formation of the fund other sources of the revenue of the state and municipality may be used. The procedure for the formation of the support fund of associations and allocation of its resources shall be established by the Government of the Republic of Lithuania.

The organisation that operated houses belonging to the association shall, within 3 months from the registration of the association, transfer the unused funds allocated for the major repairs of the building, its structures and engineering equipment to the association.