Major Repairs of an Apartment Building: Who Decides and Who Pays

People usually come with a question about major repairs when works have already started in the building, or when a line for a major repair contribution appears in the payment document and its purpose is unclear. The owner of an apartment or non-residential premises wants to know who took that decision, whether they are obliged to pay, and what happens if they disagree with the decision. An entrepreneur who owns premises on the ground floor asks the same questions, but with an eye to how the repairs will affect their business.

The article examines where the line runs between routine and major repairs, how savings in the building's savings account are formed and what determines the size of the contribution. It separately covers the procedure for formalising the general meeting's decision, acceptance of works and the cost estimate, as well as ways to protect yourself if the owner considers the decision or the contractor's actions unlawful. A separate section is devoted to recovery of arrears on contributions and the objections that can be raised in such a dispute.

Major Repairs of an Apartment Building: Who Takes the Decision and on What Basis

Since 2020, apartment buildings have been managed by property owners' associations (POAs) or simple partnerships under the Law of the Republic of Kazakhstan on Housing Relations. They organise the maintenance of common property and prepare cost estimates, but they do not decide the fate of major repairs on their own.

The decision on major repairs is taken by the general meeting of owners of apartments and non-residential premises by the majority of votes required under the Law of the Republic of Kazakhstan on Housing Relations: they determine the list of works, the source of funding and the procedure for carrying them out. The management body has no right to start repairs at its own discretion.

Certain matters fall within the competence of the local executive body: dilapidated buildings, participation in state housing stock modernisation programmes, and budget co-financing. The owners' decision is not replaced by this.

Which works count as major repairs and which as routine maintenance

The distinction between the works determines the source of funding. Major repairs of the common property of an apartment building are the restoration or replacement of structural elements and engineering systems that have reached the end of their service life, funded from the owners' savings. Routine maintenance covers minor repairs, servicing and fixing local faults, funded from regular payments.

Major repairs affect the common property and concern all owners. Their scope is determined by the design and technical documentation, not by requests from individual residents. The decision is taken by the owners of apartments and non-residential premises at a meeting; without it, works of a major nature are not financed from the savings account.

• replacement or restoration of in-building water supply, heating, drainage and electricity supply systems;
• repair or replacement of structural elements: foundation, load-bearing walls, floor slabs;
• repair of the roof and roofing, including replacement of the covering and drainage devices;
• replacement or modernisation of lift equipment and lift shafts;
• insulation of the facade and repair of the enclosing structures;
• servicing and minor routine repairs, keeping equipment in working order.

Classifying works as major or routine repairs affects how they are financed and how owners take decisions.

Who pays for major repairs: owners, tenants and the budget

Under the Law of the Republic of Kazakhstan on Housing Relations, the burden of maintaining the common property of an apartment building rests with the owners of the premises. They make mandatory contributions for major repairs, which accumulate in the building's savings account; the amount of the contribution is determined by a decision of the meeting. Since 2020, buildings have been managed by property owners' associations (POAs) or simple partnerships: they accumulate the funds and organise the works.

Tenants of the state housing fund and persons living under a tenancy agreement pay for use and maintenance, but the obligation to accumulate funds for major repairs remains with the owner — the state or a private person. The question of who pays for major repairs is decided by title to the premises, not by the fact of residence.

• Contributions of owners of premises to the building's savings account
• Funds previously accumulated in the building's account or held by the previous manager
• Co-financing from the local budget under major repair programmes
• Funds of the owner — a state body — where the premises are in the municipal fund
• Other sources provided for by a decision of the meeting and the legislation of the Republic of Kazakhstan

Major repair contributions: how savings are built up in the building's savings account

Major repair contributions are mandatory payments by the owners of flats and non-residential premises in an apartment building. They accumulate in a savings account opened by the POA or simple partnership of that building. The payer is the owner of the premises, not the tenant or lessee, unless otherwise agreed in the contract.

The amount of the contribution is determined by a decision of the owners' meeting. The charge is shown in a single payment document, and receipts are recorded separately for each premises. Major repair savings are not mixed with current payments for maintenance and utilities.

• contributions are mandatory for all owners of premises in the building
• the area of the premises serves as the basis for the charge
• records are kept separately for each premises
• funds may be spent only on major repairs of the common property
• the decision to carry out repairs is taken by the meeting of owners
• information on the movement of funds is provided upon request of an owner

Calculation of the capital repair contribution: what determines the amount

The amount of the capital repair contribution is calculated from several data points. The basis is the area of the owner's premises in an apartment building: the larger it is, the higher the payment. The area is taken from the title and technical documents for the apartment or non-residential premises.

The second element is the rate per square metre of area. It is approved by the general meeting of owners, taking into account the condition of the building and the plan of upcoming works; there is no single nationwide rate.

The third element is the accrual period. The payment is regular in nature and is calculated for the months during which the person is the owner of the premises. The calculation of the contribution comes down to multiplying the area by the rate, taking into account the period for which the payment is accrued.

• the area of the apartment or non-residential premises owned by the owner
• the contribution rate approved by the meeting of owners
• the period for which the payment is accrued
• decisions of the OSI or simple partnership on matters of the building's common property
• a change of rate by decision of a new meeting of owners

A dispute over capital repair almost always comes down to two documents: the minutes of the meeting and the estimate. If there are gaps in them, what has to be challenged is not the works themselves but the procedure by which they were ordered.

Capital repair and the general meeting: how to formalise the owners' decision

The decision on capital repair of common property is taken by the owners of apartments and non-residential premises at a meeting. The initiator may be the owners of the premises, the building council or the management body — the chairman of the OSI or an authorised person of the simple partnership.

The meeting is quorate if more than half of the total number of owners participate. The procedure for counting votes and the majority required for a decision on capital repair are established by the Law of the Republic of Kazakhstan on Housing Relations — and this is what is checked when verifying the minutes.

The minutes are signed by the chairman and secretary of the meeting and the members of the building council. Attached to them are registration sheets, powers of attorney and voting sheets. They are kept by the building's management body.

The minutes state the agenda, the voting results and the decision. Errors give grounds to challenge the decision in court. The key steps of the procedure are set out below.

• Identify the initiator and convene the meeting with notification of the owners
• Draw up the agenda with the question of capital repair of common property
• Check the quorum against the registration sheets and the number of votes
• Hold the vote and count the votes on each question
• Draw up the minutes with the signatures of the chairman and secretary of the meeting and the members of the building council
• Attach the voting sheets, powers of attorney and registration sheets to the minutes

Capital repair in a new building and in an older housing stock building

In a new building, capital repair is not yet the owners' concern: under the Law of the Republic of Kazakhstan on Shared Participation in Housing Construction, the developer is responsible for the quality of construction and engineering systems during the warranty period. The warranty covers apartments and common property: the roof, facade, risers, lifts. Until the period expires, the costs of remedying construction defects are borne by the developer. Claims are made through the OSI or simple partnership, which since 2020 have managed apartment buildings under the Law of the Republic of Kazakhstan on Housing Relations.

In an old housing stock building, major repairs are the owners' responsibility. The law classifies as major repairs the restoration or replacement of structural elements and engineering systems whose service life has expired. The decision is taken by the general meeting, and costs are distributed among the owners in proportion to their shares. Savings are held in the building's savings account.

• Common property: in a new building, the developer's warranty applies; in the old housing stock, it is the owners' area of responsibility.
• Source of funding: the developer's warranty obligations versus the owners' savings and contributions.
• Decision on repairs: in a new building, a claim against the developer; in an old one, a minutes of the general meeting.
• Building management: both categories are serviced by an OSI or a simple partnership.
• Timelines: the warranty is limited by the contract and the law; in the old housing stock, repairs are carried out as wear occurs.

Since 2020, the management of apartment buildings in Kazakhstan has been carried out by an OSI or a simple partnership.

Cost estimate and acceptance of major repair works

The cost estimate for major repairs of common property is drawn up on the basis of a defect report and the design documentation of a specialised organisation. The calculation includes materials, works, technical supervision services and contingency costs. The decision on major repairs is taken by the owners of apartments and non-residential premises at a meeting, and they also approve the cost estimate. Without an approved cost estimate, works and their payment at the owners' expense are not permitted.

The estimate is agreed at the general meeting by a majority of votes. The estimate is first considered by the building council. The approved estimate is an annex to the works contract and is binding on the contractor. Changing the estimate during the works is possible only with the agreement of the owners.

Major repairs and the owner's rights: access to the flat, inconvenience, damage

Since 2020, the management of an apartment building in Kazakhstan is carried out by an association of property owners (APO) or a simple partnership — the client for major repairs under the Law of the Republic of Kazakhstan on Housing Relations. The contractor acts under a contract with the client; the scope of obligations, deadlines and liability are determined by the contract, not by oral arrangements with residents.

The works affect in-flat risers, ventilation or utility networks, so the contractor needs access to the premises. The owner is entitled to require prior notice, agreement on the time and their presence during the works; refusal of access may be challenged by the client in court if the repairs are necessary for the maintenance of common property.

• Record the damage in a report with a description, date and photographs
• Obtain a copy of the works contract and the minutes of the owners' meeting on major repairs
• Send a written claim to the client and the contractor demanding compensation
• Keep evidence of the costs of restoring the property
• Apply to court if the claim is not satisfied voluntarily
• If access for the works is refused — agree a schedule and the owner's presence

Challenging the decision on major repairs and the contractor's actions

The decision on major repairs of common property is taken by the owners at a meeting. If the procedure for convening was breached, there was no quorum, votes were counted unreliably, or a matter was not on the agenda, an owner who did not take part in the meeting or voted against is entitled to challenge the decision in court within the period established by law from the moment they learned of it, with documentary confirmation of the breaches.

The client is the APO or simple partnership acting on the owners' decision, and the works are carried out by a contracting organisation under a contract. If the contractor departed from the design, delayed the deadlines, performed the works poorly or failed to remedy defects during the warranty period, the owners are entitled to demand the remedy of defects, a proportionate reduction in the price of the works and compensation for losses. The case is built on the terms of the contract, the completed works certificates and an independent expert report.

• adoption of a decision without the required quorum
• breach of the procedure for notifying owners of the meeting
• inclusion in the agenda of a matter not announced in advance
• unreliable counting of votes and distortion of the voting results
• adoption of a decision on a matter within the competence of another body
• material breach of the owner's rights by the decision adopted

Recovery of arrears for major repairs: procedure and objections

A claim for recovery of arrears in contributions for major repairs arises for the owner of premises in an apartment building against the association of property owners or simple partnership, which since 2020 has managed the building under the Law of the Republic of Kazakhstan on Housing Relations. The amount of the contribution and the procedure for paying it are approved by the general meeting — the claim is based on that decision. The creditor is the association or partnership itself, not the akim, the KSK or the contractor.

The obligation to pay contributions does not depend on whether the owner uses the premises, lives in it or received a separate payment document. The basis is the law, the decision of the general meeting and the data on the area of the premises. If payment is overdue, the creditor sends a claim and then files a lawsuit in the court at the location of the defendant or the property.

• the general meeting decision was not adopted or was adopted without a quorum;
• the amount of the contribution was not approved or was calculated incorrectly;
• the sum has already been paid but was not recorded by the creditor;
• the limitation period has expired for some of the periods;
• the payment includes expenses not related to major repairs;
• the creditor has not confirmed the right of claim for a specific premises.