Summary

The Apartment Ownership Act that was in force before 1 July 2001 prescribed that an apartment association, of which each apartment owner is a member, was to be founded for management of the legal shares of the apartment ownerships, or a contract for joint activity was to be entered into by all the apartment owners. Yet no time limit for the foundation of an apartment association or entry into a contract was prescribed. As a result, after the apartment ownership had been established, there was often a long period of time when no legal form existed through which the property in common ownership could be managed. Even if an apartment association was founded, it could just as easily disappear, as the law allowed for apartment associations to be liquidated. This, however, would render management of legal shares more difficult.

A new Apartment Ownership Act entered into force in 2001, which prescribed a new type of legal relationship between apartment owners known as a community of apartment owners. According to the explanatory memorandum, the law was drafted based on the German apartment ownership law and German court practice. Nevertheless, the new Act also allowed for the continued use of the regulation established by the former Act. Judging from the number of associations dealing with real property, it appears that communities of apartment owners are not as popular as was expected.

Does this mean that legislators have failed to eliminate the problems relating to management of an apartment association (or “administration”, as set out in the new Act) despite replacing this regulation with the rules governing communities of apartment owners? If this is the case, why is it that a system that has been tried, successfully implemented and favoured in Germany, Austria and Switzerland is not successfully implemented in Estonia in the form of communities of apartment owners? The author endeavours to answer these questions in this article.