(2023.06.20-ны өдрийн орчуулга)                                                   Unofficial translation

LAW OF MONGOLIA

June 18, 2003               Ulaanbaatar city

ON LEGAL STATUS OF ASSOCIATION OF APARTMENT OWNERS AND PROPERTY OF COMMON OWNERSHIP IN PUBLIC RESIDENTIAL BUILDINGS

Article 1.Purpose of the law

1.1.The purpose of this law is to determine the legal basis of organization and operation of association of apartment owners, and to regulate relations related to the ownership, possession, use and protection of the property of common ownership of public residential buildings.

Article 2.Legislation on legal status of association of apartment owners and property of common ownership in public residential buildings

2.1.The legal status of association of apartment owners and property of common ownership of public apartment buildings consists of the Civil Code, the Law on Construction, the Law on Apartments, the Law on Privatization of Apartments, this law and other legislative acts issued in accordance with them.

Article 3.Scope of the law

3.1.This law applies to the ownership, possession, and use of common property in public residential buildings, as well as relations related to the activities of professional organizations that provide public services.

3.2.This law does not apply to the relationship of sole ownership of an apartment building.

Article 4.Definitions of terms in the Law

4.1.The following terms used in this law shall have the following meanings:

4.1.1."public residential buildings" means a building stated in paragraph 1 of Article 3 of Law on Privatization of Apartment;

4.1.2."apartment owner" means a person authorized to dispose of an apartment in a public residential building;

4.1.3."association of apartment owners" refers to an association without the rights of a legal entity and with compulsory membership, whose purpose is to take responsibility for the possession, use, and protection of property, ensuring the normal use of the apartment building /hereinafter referred to "apartment building"/, protecting the rights and interests of the apartment owners;

4.1.4."part per apartment owner" means the percentage of participation of the apartment owner in financing the use, protection, repair, and service of the common owned property of the apartment building and the association of apartment owners;

4.1.5."a non-residential space of solely owned apartment" means the fireplace, toilet and bathroom, hallway between rooms and storage of the apartment;

4.1.6."surrounding area" means public land with green facilities, lawns, children's playgrounds, shade, footpaths, parking lots, and similar facilities for residents and owners of the apartment building.

Article 5.Association of apartment owners 

5.1.The legal status of the apartment owners' association /hereinafter referred to "the association"/ is determined by Article 143 of the Civil Code and this law.

5.2.There shall be one association per apartment building, and apartment owners in several adjacent apartment buildings may join to form one association.

5.3.A meeting establishing the association shall be convened at the initiative of the apartment owners. If necessary, a meeting shall be held at the initiative of the Apartment Privatization Bureau in that area and the Governor of that level.

5.4.A decision of the meeting to organize the association is considered to be established when leaders of the meeting sign it.

5.5.The association shall use seals and printed forms made in accordance with established procedures and shall have a bank account.

5.6.Each apartment owner participates in the meeting of all members with the right to one vote for the number of each apartment he/she owns, and the apartment owner who has combined several apartments of the apartment building into one apartment has the right to one vote for the number of each apartment.

5.7.Unless otherwise provided by law, the association is not responsible for obligations of its members, and members are not responsible for obligations of the association.

5.8.The association shall perform maintenance and service of common owned properties and pipelines by professional organizations on the basis of the contract, and shall have the right to freely choose a professional organization to perform maintenance and services.

Article 6.Charter of the association 

6.1.Charter of the association shall specify the followings:

6.1.1.name of association and its registered address;

6.1.2.purpose and activities of the association;

6.1.3.structure and composition of management and supervisory board of the association, their term of office and powers;

6.1.4.rights and obligations of the association and apartment owners;

6.1.5.procedure for possession and use of property of common ownership;

6.1.6.procedures for each apartment owner to participate in the financing of expenses related to the use, protection, repair, service, and security of the apartment building;

6.1.7.procedures for raising funds, establishing and operating funds necessary for the activities of the association;

6.1.8.procedure for reorganizing the association.

6.2.Charter of the association shall be approved by the meeting of all members.

Article 7.The highest organization of the association

7.1.The highest governing body of the association is the meeting of all members.

7.2.The following issues shall be discussed and resolved only at the meeting of all members:

7.2.1.adoption of rules of the association, amendments thereto;

7.2.2.discuss and approve a budget, report, and balance sheet of the association, establishing a fund and taking a loan to ensure the normal operation of apartments;

7.2.3.make a decision of formation, use, and disposal of funds and loan funds of the association;

7.2.4.select members of management and supervisory board from among the apartment owners, discuss their reports, and handle complaints related to their activities;

7.2.5.reorganize the association;

7.2.6.admitting and expelling the association from membership in non-governmental organizations;

7.2.7.matters related to buildings and entrance security;

7.2.8.use, maintenance and protection of the surrounding area;

/This sub-paragraph was added according to the law as of July 1, 2005/

7.2.9.an owner of the apartment to build a building in the surrounding area in order to change purpose and planning of the apartment;

/This sub-paragraph was added according to the law as of July 1, 2005/

7.2.10.monitor the use of surrounding area of ​​the apartment building for its intended purpose;

/This sub-paragraph was added according to the law as of July 1, 2005/

7.2.11.other matters stated in the law and charter.

/The numbering of this sub-paragraph was amended according to the law as of July 1, 2005/

Article 8.Meeting of all members 

8.1.Meetings of all members can be regular or special.

8.2.Unless otherwise specified in the charter, the regular meeting shall be convened at least once a year.

8.3.The special meeting shall be convened by a decision of the management and supervisory board or the executive director or at the initiative of at least one third of all members.

8.4.Resolutions and minutes of the meeting shall be issued by the meeting, which shall be signed by members of the meeting and certified with the association's seal.

8.5.Date of the meeting of all members shall be announced to members at least 14 days before the meeting, and a draft decision to withdraw from the meeting shall be notified in writing.

8.6.Matters not scheduled to be discussed at the meeting shall be discussed only by the majority vote of members participating in the meeting.

8.7.The meeting of all members shall be chaired by the chairman of the board of directors or, in his absence, any member of the board of directors by majority vote of the participants in the meeting.

8.8.On the basis of a written power of attorney, a member may invite his/her representative to participate in the meeting of members, or submit his/her opinion on the agenda in advance through a voting page. The number of members voting in advance in writing shall not exceed 20 percent of all members.

8.9.The power of attorney and advance vote are valid only for that meeting, and if the meeting of all members is postponed, but the matter scheduled to be discussed at that meeting does not change, the power of attorney and advance vote are still valid for the next meeting.

8.10.In addition to state and local administrative organizations, representatives of non-governmental organizations and professional organizations may participate in the meeting.

Article 9.Validating a resolution of all members' meeting

9.1.A resolution shall become effective with the majority vote of members present at the meeting, and members who did not participate in the meeting or who voted against it is obliged to implement the resolution made at the meeting.

9.2.The meeting becomes effective when more than 50 percent of all members participate in the meeting.

9.3.If more than 20 percent of part per apartment owners is owned by one owner, it becomes effective with the participation of more than 75 percent of all members.

9.4.If the number specified in paragraphs 9.2 and 9.3 of this law is not reached, the meeting of all members shall be considered invalid and a new meeting shall be scheduled.

9.5.The distribution of costs related to repair, protection, and service of property of common ownership shall be decided by a vote of at least two-thirds of the members participating in the meeting.

Article 10.Board of directors, its rights and obligations

10.1.The Board of Directors shall consist of an adult resident of the apartment building, and the board shall be part-time.

10.2.Taking into account the number of members of the association and the characteristics of apartment building, the number of board members representing residents of floors, entrances and buildings shall be determined by the meeting of all members.

10.3.Members of the Board of Directors are elected by the majority vote of owners to be represented.

10.4.Chairman of the Board of Directors shall be elected by the majority of the members of the Board.

10.5.In the temporary absence of chairman of the board of directors and executive director, their deputy shall be appointed by the decision of the Board of Directors' meeting.

10.6.Meetings of the Board of Directors shall be regular or special.

10.7.Regular meetings of the Board of Directors shall be held at least once per quarter, and the charter may specify an increase the number of meetings of the board of directors.

10.8.The Board of Directors has the following rights and obligations:

10.8.1.establish conditions and criteria for candidacy for the executive director of the association;

10.8.2.election and dismissal of the executive director of the association;

10.8.3.decide whether or not to lease, own, or use property of common ownership;

10.8.4.determine authority of the director regarding disposal of funds and other monetary assets of the association;

10.8.5.determine the salary of the executive director and accountant;

10.8.6.discuss reports and plans of the association's executive director;

10.8.7.organize implementation of decisions of the meeting of all members;

10.8.8.conclude a contract with the executive director and evaluate fulfillment of the contract;

10.8.9.discuss issues to be resolved at a meeting of all members.

10.9.Special meetings of the Board of Directors can be convened at the initiative of a member of the Board of Directors, the supervisory board, or the executive director.

10.10. The chairman of the Board of Directors has the following rights and obligations:

10.10.1.announce, organize and preside over the meeting of the Board of Directors and the meeting of all members;

10.10.2.organize the activities of the Board of Directors;

10.10.3.supervise contracts concluded with others on behalf of the association by the executive director;

10.10.4.keep minutes of meetings of all members and the board of directors, monitor the implementation of decisions;

10.10.5.present a report of the Board of Directors to the meeting of all members;

10.10.6.assign duties to the member of the Board of Directors and the executive director;

10.10.7.file a claim in court on the issues specified in paragraph 12.6 of this law;

10.10.8.keep records of all members' meetings and decisions of the supervisory board.

Article 11.Supervisory board, its rights and obligations 

11.1.Depending on the number of buildings included in the association, a part-time supervisory board shall be established with a composition of at least 3 people.

11.2.The supervisory board shall perform the duties of supervision of apartment owners.

11.3.The supervisory board shall have the following rights and obligations:

11.3.1.monitor the activities of the executive director;

11.3.2.control whether activities of the association comply with laws and regulations of the association;

11.3.3.control whether accounting, reports and balances are made accurately according to laws and regulations;

11.3.4.check whether property valuation is correct;

11.3.5.take measures to eliminate violations related to the financial and other activities of the association, and if necessary, to temporarily close the current account in the bank and take measures to stop transactions;

11.3.6.apply to the court and other related institutions to eliminate violations related to the financial and other activities of the association;

11.3.7.report its activities at the meeting of all members;

11.3.8.other rights and obligations specified in the rules.

11.4.A member of the supervisory board is responsible for maintaining the confidentiality of the examined documents, reports and balance sheets.

11.5.A meeting of the supervisory board shall be valid if the majority of members of the supervisory board participate in the meeting.

11.6.A decision of the meeting of the supervisory board shall come into force by the majority vote of the meeting participants.

11.7.If the supervisory board deems that the property of common ownership has been embezzled, squandered, or caused damage in other ways, it shall request the removal of the damage or address it to the competent authority.

Article 12.Executive director, his/her rights and obligations

12.1.During the free time of the meeting of all the members, the daily activities of the association shall be handled by the executive director within the scope of the powers specified in the association's charter and the contract with the board of directors.

12.2.A person who is not a relative of any member of the management and supervisory board shall be elected as the executive director.

12.3.Unless otherwise specified in the rules, a person who is not a member of the association may be elected as the executive director.

12.4.The executive director has the following rights and obligations:

12.4.1.centralize funds required for the use, protection, repair, and service of property of common ownership in the account of the association;

12.4.2.unless otherwise specified in the charter, enter into a contract with a professional service organization for repairs and maintenance of property of common ownership and maintenance of normal housing conditions, and ensure fulfillment;

12.4.3.in accordance with its purpose, direction of activity and the decision of the meeting of all members, the funds of the association shall be used only for the use, protection, maintenance and other common expenses of property of common ownership within the powers granted by this law, other acts of laws and regulations and the rules of the association;

12.4.4.demand from the apartment owners to compensate for damages caused to others due to the failure to fulfill the obligations stipulated in this law and paragraph 148.2 of the Civil Code, and if the demand is not fulfilled voluntarily, file a lawsuit on behalf of the association in accordance with paragraph 149.2 of the Civil Code;

12.4.5.conclude contracts on lease, possession and use of property of common ownership on behalf of the association;

12.4.6.on behalf of the association or at the request of at least 2 apartment owners, raise issues to the competent authorities for resolution;

12.4.7.regularly maintain and enrich the personal records of apartment owners and apartment buildings to the extent required;

12.4.8.on behalf of the association, submit a request for the use of the background and surrounding land of the residential building to the Governor of the appropriate level in accordance with Article 441 of the Land Law, and conclude a land use agreement;

/This sub-paragraph was amended according to the law as of July 1, 2005/

12.4.9.If the board of directors decides to dismiss the executive director from his duties, hand over the association seal and other items to the Board of Directors within 3 working days from the date of the decision;

12.4.10.other rights and obligations stipulated by law and the charter.

12.5.The executive director shall report his/her work at the board meeting at least 2 times a year.

12.6.If the executive director causes damage to the association by exceeding or abusing the rights determined by the meeting of all members and the board of directors regarding the possession, use, and management of the association's property, the damage shall be compensated with his/her personal property.

Article 13.Rights and obligations of apartment owners

13.1.An apartment owner has the following rights:

13.1.1.the rights specified in paragraphs 148.1 and 149 of the Civil Code;

13.1.2.dispose of the individually owned apartment without obtaining permission from the association or other apartment owners;

13.1.3.review resolutions and minutes of the meeting and check their accuracy;

13.1.4.decide whether repair and service fees and expenses are reasonable;

13.1.5.other rights provided by law.

13.2.An apartment owner has the following obligations:

13.2.1.comply with paragraph 148.2 of the Civil Code and this law and the charter;

13.2.2.fulfill decisions of all members and board meetings;

13.2.3.participate in financing the use, protection, repair, service and other common expenses of property of common ownership in accordance with Article 147 of the Civil Code and Article 16 of this Law;

13.2.4.in addition to paying for the services provided by professional organizations, in addition to being responsible for all the costs of repairs and services in the apartment;

13.2.5.if family members, as well as the person who owns his/her own apartment, causes damage to other people's apartment or property of common ownership, to remove the damage with his/her own property;

13.2.6.if an apartment is owned and used by others, perform duties not performed by the owner or user;

13.2.7.not to change the purpose, planning, main structure, design, and engineering network of the apartment without a permission of the authorized organization;

13.2.8.notify the association when transferring the right of residential ownership to others;

13.2.9.other obligations prescribed by law.

13.3.Before transferring the apartment to his/her own ownership, the apartment buyer is obliged to check with the seller and related organizations whether there are any unfulfilled obligations related to the apartment, and he/she is fully responsible for consequences of non-fulfillment of those obligations.

Article 14.Registry of apartments

14.1.The apartment registration consists of registration of apartments and property of common ownership in the apartment building.

14.2.The registration of apartment shall include the followings:

14.2.1.complete drawings and projects of residential buildings;

14.2.2.apartment number, total area, number of rooms, apartment owners' surnames, parents' names, civil registration number, if the owner is a legal entity, its name and state registration number;

/This sub-paragraph was amended according to the law as of June 3, 2022/

14.2.3.surname, parent's name, civil registration number of the owner of the non-residential part of the apartment building, if the owner is a legal entity, his/her name, state registration number, and the area of part he/she owns;

/This sub-paragraph was amended according to the law as of June 3, 2022/

14.2.4.registration of property of common ownership, size of background and surrounding land;

14.2.5.others stated in the law and the charter.

Article 15.Property, grounds and surrounding area of common ownership of residential buildings

15.1.Common owned property of a residential building includes the following property:

15.1.1.exterior walls, load-bearing walls, columns, basements, roofs, attics, escalators, stairs, tunnels, technical and first-floor service rooms for non-residential purposes, inter-apartment areas, balconies, common property inside the apartment, equipment, entrance windows, doors, stairs, awnings, garbage pipes, the first barrier of the control node of heating and hot and cold water supply networks of residential buildings, electrical input panels, communication lines up to the connection box of the floor, sewage above the +0.00 mark of the floor assets such as pipelines, public swimming pools above and below the apartment, parking lots, and similar facilities;

15.1.2.funds of the association.

15.2.The assets of the association fund consist of the following sources:

15.2.1.interest on depositing the free balance of fund assets in the bank;

15.2.2.donations and assistance to the association fund;

15.2.3.income from business activities of the association;

15.2.4.money accumulated for maintenance;

15.2.5.loan capital;

15.2.6.other sources.

15.3.It is forbidden to spend the funds of the association for anything other than the use, protection, repair, maintenance and other common expenses of the property of common ownership.

15.4.Apartment owners shall jointly own property of common ownership.

15.5.If provided by the charter, property of common ownership can be transferred to the ownership and use of a specific person on the basis of an agreement.

15.6.Apartment owners are prohibited from obstructing professional organizations engaged in the operation, repair and maintenance of engineering networks and equipment while exercising their right to co-ownership of property of common ownership of the apartment building, to own and use the grounds and surrounding land of the apartment building.

15.7.The right to limited use of the surrounding land of the residential building shall be implemented according to Article 151 of the Civil Code, and the amount of the limited use land /servitude/ shall be determined according to Article 8 of the Construction Law and building norms and standards.

15.8.In accordance with sub-paragraph 18.1.4 of this law, the surrounding land shall be used on the basis of the association agreement.

Article 16.Allocation of repair, maintenance and service costs of common owned property

16.1.Article 147 of the Civil Code shall be followed when allocating the costs of repair, protection, and service of common owned property.

16.2.The costs related to the repair and maintenance of common owned property belonging to one or more apartments of residential building /engineering networks, ventilation pipes, floor doors and other equipment, etc./ shall be paid by owners of the apartments  who use the common owned property.

16.3.A budget loan can be granted to the association for the major renovation of the property of the common ownership of the residential building, and the procedure for granting the budget loan shall be approved by the Government.

16.4.The costs related to the repair, protection and maintenance of the common owned property may be paid by the following apartment owners in a higher amount than other apartment owners, and the amount to be paid shall be determined by a meeting of all members:

16.4.1.if the repair, protection and service of some property of the common ownership is more in the interest of a particular apartment owner than others;

16.4.2.if they are engaged in production and services in accordance with laws and regulations in residential and non-residential areas.

16.5.The issue of distribution of costs related to the repair and maintenance of common owned property shall be decided at a meeting of all members.

16.6.During the lifespan of a residential building, if a large amount of common owned property such as roofs and elevators is required for major repairs belonging to common owned property, it can be financed once from the state or local budget based on the opinion of the building control organization.

Article 17.Powers of the state central administrative body in charge of apartment matters

17.1.The state central administrative body in charge of housing issues has the following powers:

17.1.1.take measures to implement the laws and regulations on legal status of association of apartment owners and property of common ownership in public residential buildings, and monitor their implementation;

17.1.2.determine the requirements for changing the purpose, planning, engineering network, main structure and design of residential buildings;

17.1.3.support the activities of the association;

17.1.4.adopt a model rule of the association.

Article 18.Powers of Governors of aimag, capital city and district 

18.1.Governors of aimag, capital city and district has the following powers:

/This paragraph was amended according to the Law as of April 22, 2022/

18.1.1.the Office of the Sum and District Governor shall register the association based on the decision of the meeting to organize the association;

18.1.2.take measures to implement relevant laws and regulations and monitor their implementation;

18.1.3.support operation of the association;

18.1.4.let the association use the area and surrounding area according to the contract under certain conditions as specified in the legislation on land, based on the general plan of the apartment building;

18.1.5.specify rights, obligations and responsibilities of the association in the contract regarding the surrounding area where several associations are jointly responsible for its improvement and services, and support and control its implementation;

18.1.6.determine an amount of loans and investments from the local budget for the repair of property of common ownership;

18.1.7.at the request of members of the association and, if necessary, on their own initiative, to conduct inspections of activities of the association by authorized organizations and officials, and draw conclusions.

Article 19.Rights and obligations of professional organization

19.1.The professional organization has the following rights and obligations:

19.1.1.in the case of repairs and maintenance of the property of common ownership in residential buildings in accordance with a contract, the costs shall be paid by the association from time to time;

19.1.2.to be responsible for services such as cleaning and dirty water, heat, electricity and telecommunications;

19.1.3.to regularly monitor the normal operation of property of common ownership, to organize preventive inspections at least 2 times a year to ensure normal operation, and to draw conclusions and take necessary measures;

19.1.4.to carry out repairs and maintenance of apartment engineering network and equipment within the specified time, and to ensure the normal operation of usage.

/This paragraph was added according to the law as of February 9, 2011/

Article 20.Liquidating the association 

20.1.The association shall be liquidated on basis of the following grounds:

20.1.1.all apartments in the apartment building have been transferred to the ownership of one person;

20.1.2.the grounds stipulated in Article 144 of the Civil Code have been established.

20.2.It is prohibited to liquidate the association on basis of grounds other than those specified in Article 20.1 of this Law.

Article 21.Liabilities for violators of the Law

21.1.Any person or legal entity who violates this law shall be held liable under the Criminal Code or the Law on Violations.

/This Article was modified according to the law as of December 4, 2015/

THE CHAIRMAN OF STATE GREAT KHURAL OF MONGOLIA S.TUMUR-OCHIR