When the occupancy permit becomes final, the construction officially turns into a residential building. When, after 2-3 months the Land Registry Office registers the apartment building and releases the individual units for moving in (section 10.3), after some 2-3 months, the apartment building is founded retroactively to the date specified on the occupancy permit. In order to allow the building to commence operation, and to have cleaning, garbage pickup and heating services provided to the first residents moving in, we organize a so-called foundation meeting when the occupancy permit becomes final. Given that there are no separate units at this point, in legal terms the building has one owner, so effectively we are holding a “one-person” general meeting to resolve the important questions.
At the foundation meeting, we adopt the final deed of foundation of the apartment building, which will be used in the application to the Land Registry Office to register the apartment building. We will also adopt the OOR, which will regulate the everyday life of the building. We will elect the joint representative, who is selected by way of a preliminary competitive procedure. The main requirements that the joint representative must meet is a clean record (at least 3-5 years, operation without legal problems), good reputation, appropriate credentials (experience in managing large, new-build apartment buildings), appropriate organization, office space and website, and liability insurance. Additionally, the most important criterion is how cost-effectively he or she can operate the building (ensuring that the communal charges are as low as possible). We cooperate with multiple joint representation companies and are not committed to any one representative, and it is not easy to be included among our partners.
At the foundation meeting, the rate of the communal charges is accepted and we authorize the joint representative to open a bank account for the building and we grant him/her the right to dispose over the account. After the bank account is opened, our first task is to pay a substantial advance, in the range of a million forints to cover the communal charges payable on unsold properties still owned by Metrodom, which ensures the operability of the new building.
After being elected, the joint representative takes over the building, which is a half or full-day procedure, during which the joint representative and the representatives of the general contractor walk through the entire building, look at the appliances, indicate if there are any problems, read the gas, water and electricity meters (this is the reading up to which Metrodom is responsible for the utility bills), receive the designs and certificates of the building, the particulars of the residents, and the keys and the codes. This procedure is a lot like the procedure we follow when we hand over the apartment to the buyer, only the scale is different.
From this point on, the new apartment building is operating in line with the provisions of the Apartment Buildings Act, like any other apartment building; the residents pay the communal charges (Metrodom pays the communal charges due on the unsold apartments), the joint representative pays the bills of the apartment building, concludes contracts with the public utility companies, the cleaning company and the security company, if applicable, and takes care of maintenance, etc. This profoundly changes the previous situation, when everything that concerned the building was Metrodom’s task and responsibility; from this point on, any questions regarding operation must be addressed to the joint representative. Metrodom will be in the same situation as any of the residents, we pay the common costs, heating and water fees for the apartments we own and turn to the joint representative if we have problems.
Therefore, we kindly ask that if you have problems or questions regarding the cleaning service, starting up or turning off heating, the irrigation system or anything similar in nature, please do not contact Metrodom, but instead contact the joint representative, as we are not responsible for the operations of the building, only for guarantee services.
We would like to emphasize that we are not in any way imposing any sort of restrictions on the residents; during the foundation, we do not conclude any contract with the joint representative that would preclude replacing him or her, and we do not make any financial or other decisions that would force the apartment building to take a particular path. If they want, the residents may change everything at their first general meeting following the registration of the apartment building; they may elect a new joint representative, may raise or reduce the communal charges and elect a new audit committee. It should be noted, however, that it is better to wait six months or a year to make these sorts of changes, i.e. when an informed decision can be made, based on actual experiences.