Since condominiums had emerged (their history dates back to the Roman Empire), they have covered several stages in their evolution moving towards greater efficiency as market relations established themselves in society. In early 20th c. this form of ownership was already known in Western and Eastern Europe, but it was over the past twenty years that it has become widely spread in most developed countries of the globe.
In the course of their existence condominiums have proved their efficiency in many respects, including common ownership, management and maintenance of residential buildings property.
The building type or construction scheme do not matter here. Standard multifamily buildings mainly constructed in Ukraine under socialist rule provide ideal premises for condominiums. A group of one-family houses can be also united in a condo.
Condominium makes it much easier to address the issues related to mixed (individual and collective) ownership for residential and non-residential units, to joint ownership of technical facilities. It also facilitates distributing expenses and responsibilities considerably.
Setting up condominiums is a timely issue not for Ukraine alone. Other CIS countries are also working towards this goal. In Russia condominiums have been already formed and are operating in Moscow, Ryazan, Yaroslavl and Ekaterinburg.
The first units owners' associations in Ukraine (modeled on condominiums) sprang up in Kharkiv in 1994. Multifamily buildings' residents who initiated their formation strove to achieve the first-priority objective - enhance the efficiency of using funds allocated for the maintenance of buildings and attached territories from the local budgets and collected from residents.

Condominium is an economic organizations, a form of uniting co-owners of residential and non-residential units in a multifamily building for joint management of real estate, for owning, using and managing, within the law-established limits, common indivisible property.
The main document providing legal foundation for building relations between individual owners of residential and non-residential units in the building where the condominium is set up is the Condominium By-Laws. The By-Laws establish specific mechanism for distributing responsibilities and harmonizing interests of all unit owners in each multifamily building.
The supreme governing body is the General Meeting. Each unit owner in the building has a number of votes at the General Meeting which is determined by ratio between the floor area owned by each owner and the total area of residential and non-residential units owned jointly by all owners. This ratio is called each owner's interest.
The condominium is free to identify all activities necessary for adequate management and maintenance of the building and its adjacent territory on its own. Its managerial operation is based on an annual financial plan. This plan does not only include a list of major jobs to be performed in the building within a year, but also identifies financial sources to cover the expenditures involved in their performing.

Current control over incomes and expenditures is exercised by the condominium board. The board reports to the General Meeting periodically on the progress in financial plan realization. The board enters into contracts with and hires workers to maintain the building. If there is much to be done in terms of management, the board is entitled to hiring a professional building manager (it could be a person who used to work for Zhek or for a business, or a person who had been trained professionally).
Condominiums are managed either by in-house staff, or by hired professionals (building manager, accountant), or by a managing company (Zhek, for instance) on a contractual basis.

Many dwelling residents in Ukraine still hope that buildings owners or former monopolist owner in the nearest future will be able to overhaul their building or to raise the standard of current repairs. Unfortunately, in most cases these expectations are totally groundless. It is only when the residents themselves, and not the executive authorities will control the services standards and bear responsibility for their timely financing, that the situation will change for the better.
In order to design the concept for restructuring municipal housing stock through forming condominiums, local governments should have a clear vision of the advantages offered by this action. The principal potential advantages for the key participants in the process (individuals, local governments and Zheks) are listed below.

Individuals:

- become owners of the building property and units in common use;
- obtain an opportunity to set up a managerial structure of their own to address the issues of building maintenance;
- get a chance to improve the building's physical condition and living conditions;
- obtain a mechanism to solve problems ensuing from common residence in the building;
- have an opportunity to control the standard of services in the building;
- expand opportunities for residents' daily social exchanges;
- acquire actual levers for influencing those who fail to comply with general agreements;
- select contractors on competitive basis to improve the building maintenance and reduce general expenditures;
- control the use of rent, housing maintenance payments, benefits and subsidies;
- have a possibility to control the use of and safety on the territory adjacent to the building;
- can rent out common use premises in order to raise income to cover the expenditures.

Local governments:

- reduce expenditures from the local budget for housing maintenance;
- get rid of the problems involved in rent calculating and collecting;
- delegate much of their authority in decision-making related to housing maintenance and use to the residents;
- make it possible for individuals to realize their freedom of choice in housing sector;
- benefit from substantial improvement in the municipal buildings' physical condition;
- promote effective mechanism for managing housing market;
- separate clients' and contractors' functions with respect to providing communal services.
ZhEK's (housing management and maintenance enterprises):
- get an opportunity to enter into an agreement with the client (condominium) with explicitly stated provisions of its implementation;
- are guaranteed full payment in case they provide services in full if owners/clients are in control of the funds earmarked for housing maintenance;
- can conclude better contracts and will have to deal with one legal entity only;
- will become competitive, will build up a wide range of clients and, subsequently, get higher profits.

Legal issues involved in program implementation and possible ways of addressing them

1. There is no legal definition of a condominium's legal status as a subject of economic activities. The type of ownership is not determined (joint common, joint partial or new specific form, for example - joint condominium ownership)- the fact that affects considerably relationship between condominium members, as well as relations between condominium and other persons and legal entities. Condominium is not a subject of land, civil and economic law, as well as tax law.
It is necessary to have the Law of Ukraine "On multifamily buildings co-owners' associations and condominium associations" passed as it will regulate these issues; it is also necessary to draft amendments for the Civil and the Land Codes of Ukraine and introduce appropriate amendments into tax law and the Law of Ukraine "On Ownership".
2. The issue of membership in condominiums is not spelled out properly in the Law of Ukraine "On privatizing public housing stock". For instance, owners of non-residential units built into the building are not envisaged as condominium members. For this reason in many cases they refuse to contribute to housing and adjacent land maintenance.
It is necessary to have amendments and additions to the Law of Ukraine "On privatizing public housing stock" adopted ( to Article 10, in particular). They should stipulate mandatory formation of condominiums, and provide for all co-owners in a multifamily building to become condominium members and contribute to housing and adjacent land maintenance.
3. The Law of Ukraine "On privatizing public housing stock" is not explicit enough on the issue of condominium taxation. As a result, it is rather ambiguous. This issue is vital since a condominium is not-for-profit organization, and in order to preserve the existing housing stock it is necessary to provide taxation benefits for condominiums.
It is advisable to word Part 2 of Article 10, the Law of Ukraine "On privatizing public housing stock" differently and to amend tax law of Ukraine.
4. There is no clear-cut list of economic activities related to building and adjacent territory maintenance. This enables taxation agencies to levy taxes upon a number of condominium activities, proceeds from which are used exclusively for building and adjacent territory maintenance.
The Center suggests having this issue settled in the Law of Ukraine "On multifamily buildings co-owners' associations and condominium associations" which has been drafted and submitted to the State Committee for Construction, Architecture and Housing Policy of Ukraine.
5. An important obstacle on the road to condominiums is the fact that the participation of the former monopolist buildings' owner in the building first capital repair following the privatization has been addressed only in theory. Thus, the Cabinet of Ministers Resolution of October 8, 1992 No.572 stipulates that the Procedure for the participation of the former buildings' owners in arranging for and financing the repairs in privatized residential buildings shall become effective upon reforming labor remuneration system. Lack of a national program for labor remuneration system reforming, however, testifies to the fact that the procedure will not become effective in foreseeable future.
It is necessary to amend the Cabinet of Ministers Resolution of October 8, 1992 No.572 to stipulate that Provision 11 of the Procedure should become effective from the adoption date of the Resolution "On amending the Cabinet of ministers Resolution of October 8, 1992 No.572".
6. A specific form of joint ownership emerges in condominiums which is not accounted for either by the effective Civil Code of Ukraine, or its new draft. On the one hand, in the course of privatization units are transferred into private (joint common or joint partial) ownership. On the other hand, with private ownership for residential or non-residential units in place, legal relations emerge between their owners based on their right to ownership to a portion of construction elements, technical facilities and ancillary premises, building services structures and the land plot adjacent to the building. These elements are not owned according to the right to joint common ownership, since this form of ownership is valid for a married couple only; they are also not owned according to the right of joint partial ownership, since co-owners' portions are indivisible and inalienable under effective law. This results in a legal vacuum with respect to legal settlement of the relations between the right of ownership subjects.
The Law of Ukraine "On multifamily buildings co-owners' associations and condominium associations" has been drafted, submitted to the State Committee for Construction, Architecture and Housing Policy of Ukraine and scheduled to submit for consideration to the Supreme Rada of Ukraine. In addition, it is necessary to amend the effective Civil Code of Ukraine and the draft Code, as well as the draft Housing Code of Ukraine.
7. The issue of servicing in-building and out-building engineering networks in the buildings where condominiums have been set up is not settled yet. On the one hand, residential and non-residential units' owners are co-owners of the building technical facilities (that is, co-owners of engineering networks), on the other hand, municipal structures - services suppliers should provide their complete services through engineering networks (from a faucet to a battery and to a gas burner). The problem arises of who should maintain in-building and out-building engineering networks.
We deem it necessary that the State Committee for Construction, Architecture and Housing Policy of Ukraine should draft a Procedure for demarcating out-of-building water, sewage, heat and electricity supply networks which would settle this issue.
8. Complicated procedure for transforming housing and construction (housing) cooperatives into condominiums and lack of legal framework for this procedure holds back the growth of condominiums. Condominiums differ from cooperatives substantially, since when all the cooperative members acquire rights of ownership to their units, its board cannot represent their interests or manage common property in the building.
To solve this problem, it is advisable that the State Committee for Construction, Architecture and Housing Policy of Ukraine should work out and approve a simplified procedure for restructuring housing and construction (housing) cooperatives into condominiums, and for having their By-laws re-registered.
9. At present, the issue of including a building, in which all the residential and non-residential units have been privatized, in Zhek's or association's balance sheet is not sufficiently clear. On the one hand, as it is Zhek's responsibility, the city should provide funds for its maintenance and make depreciation allocations amounting to five percent of its balance value for its renovation. At the same time, condominium members also make contributions for these purposes.
In order to have the issue settled it is necessary for the Ministry of Finance in conjunction with the State Committee for Construction, Architecture and Housing Policy of Ukraine, Ministry of Economy and Ministry of Justice to design a Procedure for removing privatized units from the balance sheets of state, municipal structures and local governments.
10. After a condominium has been formed in a building, it is not infrequently that the former monopolist building owner rents out common use units to commercial structures, thus making profit and violating the rights of other co-owners protected by the Constitution of Ukraine and the Law of Ukraine "On Ownership".
We deem it necessary that the Cabinet of Ministers should adopt a Resolution "On intensifying setting up and operation of condominiums" which would stipulate that the former monopolist owner should transfer the rented ancillary units into common ownership of condominium members with the paid rent coming to the condominium account and being used by the condominium for building and adjacent territory maintenance needs.
11. Standard Certificate of right of ownership to a unit (house) does not provide for residential unit owners' right of ownership to common use elements. Since the certificate is a legal document, it should state the right of ownership to common use elements.
It is advisable that the State Committee for Construction, Architecture and Housing Policy of Ukraine should amend appropriately the order issued by the State Committee of Ukraine for Housing and Municipal Economy on September 13, 1992 No.56 (appendix 12) .Under the amendment, the Certificate should identify the residential unit owner's interest in the common property. The Construction Committee should also, in conjunction with the Ministry of Justice, amend and supplement legal documents which confirm the transfer of right of ownership to a unit (house) or built-in non-residential units from one owner to another and which are liable to notary certification.