Apartment associations: rights and duties of flat owners

Who is a member of the apartment association?

An apartment association is a legal person in private law whose members are all owners of the apartment ownerships of one immovable divided into apartment ownerships (KrtS § 1 lg 4) [1]. Membership follows from the Act and goes with the apartment: when an apartment ownership is transferred, the owner's rights and obligations pass to the acquirer from the moment ownership passes (KrtS § 43 lg 1) [5].

How much do I have to pay for management costs?

The basis for payments is the management plan. The management board draws it up for the financial year and the general meeting of apartment owners adopts it (KrtS § 41 lg 1 and 3) [6].

The main rule is that advance payments are made in proportion to the owner's share in the co-ownership (KrtS § 40 lg 1) [2]. The articles may provide for a different allocation if, considering all circumstances, it is reasonable and does not excessively harm the legitimate interests of any owner; for example, costs that depend on actual consumption may be paid according to the volume of the service consumed (KrtS § 40 lg 2) [2]. According to the Supreme Court (Riigikohus), this exception must be interpreted narrowly and applied only in exceptional cases (RK 2-18-12753/34) [7].

An owner may refuse to bear costs they did not agree to if requiring them to do so would be contrary to the principle of good faith (KrtS § 40 lg 3) [2]. Even where no management plan has been adopted, the association may claim the costs if the general meeting decided that the specific costs are to be borne (RK 2-19-8045/46) [8].

What happens if management costs are not paid?

• Late interest. The association may claim late interest at the rate set in the second sentence of § 113 lg 1 of the Law of Obligations Act (võlaõigusseadus, VÕS) (KrtS § 42 lg 1) [3], i.e. the interest rate set by law plus eight percent per year (VÕS § 113 lg 1) [9]. A different rate may be agreed only in the agreement on specific ownership (eriomandi kokkulepe) (KrtS § 42 lg 1) [3].
• Collection costs. The association may claim compensation for them in a total of up to 30 euros if the claim is up to 500 euros; up to 40 euros if the claim is over 500 euros and up to 1000 euros; and up to 50 euros if the claim is over 1000 euros (KrtS § 42 lg 2) [3]. Greater damage may be claimed only in exceptional circumstances (KrtS § 42 lg 3) [3].
• Right of pledge. To secure its claims arising from the apartment ownership, the association has a right of pledge over the apartment ownership, to which the rules on a first-ranking mortgage apply (KrtS § 44 lg 1 and 2) [10]. Its amount is the sum of the management costs of that apartment for the previous financial year, but no more than 50 percent of the proceeds distributed in enforcement proceedings or of the sale price of the pledged property in bankruptcy proceedings (KrtS § 44 lg 3) [10]; the agreement on specific ownership may set a fixed amount for the pledge (KrtS § 44 lg 6) [10].
• New owner. When an apartment is transferred, except in enforcement and bankruptcy proceedings, the acquirer is liable to the association as a surety for the seller's obligations arising from the apartment ownership that have fallen due, up to the value of the apartment ownership (KrtS § 43 lg 2) [5].
• Demand to transfer. If an owner has been more than three months late in paying at least six months' management costs, the owners may decide by majority to demand that they transfer their apartment ownership (KrtS § 32 lg 2 p 2 and lg 3) [11]. If the owner does not do so within three months of the demand, a court decides on the transfer; the action must be filed before one year has passed since the demand (KrtS § 33 lg 1 and 3) [12].

How are general meeting decisions made?

Decisions taken by majority vote are adopted at the general meeting of apartment owners (KrtS § 20 lg 1) [13]. The management board calls the meeting, with at least seven days' notice unless the articles provide for a longer period (KrtS § 20 lg 1; MTÜS § 20 lg 1 and 5) [13] [14] – this follows from the Non-profit Associations Act (mittetulundusühingute seadus, MTÜS), which applies to the meeting. If an owner has given the association their e-mail address, the notice must be sent to that address (KrtS § 20 lg 4) [13].

• Quorum. The general meeting has a quorum if the participants hold more than half of the votes and more than half of the co-ownership shares, unless the articles provide otherwise (KrtS § 20 lg 2) [13]. Otherwise the board calls a new meeting with the same agenda, which has a quorum regardless of the number of participants (KrtS § 23 lg 1) [15].
• Votes. Each apartment ownership gives one vote; the articles may provide that each owner has one vote or that the number of votes depends on the size of the co-ownership share (KrtS § 22 lg 1) [16].
• What is decided by majority. Matters of ordinary management, for example ordinary upkeep and repair of the common property and creating a reserve and a repair fund of appropriate size, unless the articles set stricter requirements (KrtS § 35 lg 1 and 2) [17]. A reorganisation going beyond a change needed for upkeep requires an agreement of the apartment owners (KrtS § 38 lg 1) [18]; the consent of an owner whose rights the reorganisation does not affect beyond what they must tolerate by law is not needed (KrtS § 38 lg 2) [18].

What does the management board do?

The management board is the association's governing body that represents and manages it (KrtS § 24 lg 1) [19]. The board may have one to three members unless the articles provide otherwise (KrtS § 24 lg 2) [19]. No board is needed if there are no more than ten apartment ownerships or all of them belong to one person; the owners then manage and represent the association jointly (KrtS § 24 lg 3 and 4) [19]. A board member is elected for up to three years unless the articles set another term, and the general meeting may remove them at any time regardless of the reason, unless the articles provide that a member may be removed only for a material failure to perform their duties, inability to manage or another good reason (KrtS § 24 lg 1; MTÜS § 28 lg 1¹, 2 and 3) [19] [20].

The board draws up the management plan and must draw up a new one and call an extraordinary general meeting if the plan in force does not ensure management or the association's lasting solvency (KrtS § 41 lg 1 and 4) [6]. An owner has the right to receive information from the board about the association's activities and to examine its documents (KrtS § 45 lg 1) [21].

What the law says

• „Korteriühistu on eraõiguslik juriidiline isik, mille liikmeteks on kõik ühe korteriomanditeks jagatud kinnisomandi korteriomandite omanikud“ [1] (translation: an apartment association is a legal person in private law whose members are all owners of the apartment ownerships of one immovable divided into apartment ownerships; KrtS § 1 lg 4) – there is no separate joining.
• „Korteriomanikud teevad majanduskava alusel perioodilisi ettemakseid korteriühistule vastavalt oma kaasomandi osa suurusele.“ [2] (translation: apartment owners make periodic advance payments to the association under the management plan in proportion to their share in the co-ownership; KrtS § 40 lg 1) – unless the articles provide for a different allocation, the larger your share, the larger your part of the costs.
• „Korteriomanik võib keelduda kandmast kulusid, millega ta ei ole nõustunud, kui nende kandmise nõudmine temalt oleks vastuolus hea usu põhimõttega.“ [2] (translation: an owner may refuse to bear costs they did not agree to if requiring them to bear these costs would be contrary to the principle of good faith; KrtS § 40 lg 3) – an exception, not a general right not to pay.
• „Korteriühistu organi otsuse kehtetuks tunnistamise nõude esitamise tähtaeg on 60 päeva otsuse vastuvõtmisest arvates.“ [4] (translation: the time limit for a claim to declare a decision of an apartment association body invalid is 60 days from the adoption of the decision; KrtS § 29 lg 3) – the period runs from the decision.

What to do

1. Give the association your phone number or e-mail address and, if you live elsewhere, your postal address (KrtS § 46 lg 1 and 2) [22].
2. Check in the management plan and the articles how costs are allocated (KrtS § 40 lg 1 and 2; KrtS § 41 lg 1) [2] [6].
3. If a bill seems wrong, ask the board for information and documents (KrtS § 45 lg 1) [21].
4. If you disagree with a decision, file an application with the court in non-contentious proceedings to declare it invalid within 60 days of its adoption (KrtS § 29 lg 2 and 3) [4].
5. If you are in arrears, pay as soon as possible: late interest runs from when the obligation fell due until proper performance (VÕS § 113 lg 1) [9].

Frequently asked questions

Do I have to join the apartment association?

No. All apartment owners are members of the association (KrtS § 1 lg 4) [1].

Do I have to pay for a repair I voted against?

Ordinary upkeep and repair are decided by the owners by majority vote (KrtS § 35 lg 1 and 2) [17]. You may refuse to bear costs you did not agree to only if requiring them from you would be contrary to good faith (KrtS § 40 lg 3) [2]; according to the Supreme Court, you can rely on this even if you did not challenge the decision adopting the management plan (RK 2-19-8045/46) [8].

Is the buyer of an apartment liable for the previous owner's debts?

Yes, for the previous owner's obligations arising from the apartment ownership that have fallen due, as a surety and up to the value of the apartment ownership, except for a purchase in enforcement or bankruptcy proceedings (KrtS § 43 lg 2) [5].

Can the board refuse to show documents?

The board may refuse if there is reason to believe that this may cause significant harm to the legitimate interests of another owner or a third party (KrtS § 45 lg 2) [21]. You may then ask the general meeting to decide or apply to a court in non-contentious proceedings within two weeks of receiving the refusal or, if the board has not replied within four weeks, within six weeks of your request (KrtS § 45 lg 3) [21].