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Building Association Act

Issuer:Riigikogu
Type:act
In force from:23.03.2014
In force until: In force
Translation published:03.04.2014

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In force

Building Association Act

Passed 09.06.2004
RT I 2004, 53, 368
Entry into force 01.01.2005

Amended by the following legal instruments (show)

PassedPublishedEntry into force
12.10.2005RT I 2005, 57, 45001.01.2006
27.09.2006RT I 2006, 43, 32622.10.2006, partially 01.01.2009
21.11.2007RT I 2007, 67, 41328.12.2007
19.11.2008RT I 2008, 52, 28822.12.2008
21.10.2009RT I 2009, 51, 34915.11.2009
22.04.2010RT I 2010, 22, 10801.01.2011, enters into force on the date which has been determined in the Decision of the Council of the European Union regarding the abrogation of the derogation established in respect of the Republic of Estonia on the basis provided for in Article 140 (2) of the Treaty on the Functioning of the European Union, Council Decision 10889/10 ECOFIN 360 UEM 209/10 of 13 July 2010 (OJ L 197, 28.07.2010, p. 24-26).
02.05.2012RT I, 25.05.2012, 509.01.2013, partially on the tenth day after publication in the Riigi Teataja.
05.12.2012RT I, 18.12.2012, 319.12.2012
19.02.2014RT I, 13.03.2014, 301.01.2018, partially 23.03.2014 and 01.01.2016

§ 1.  Definition of building association

 (1) A building association is a commercial association the purpose of which is to support and promote the economic interests of its members through joint economic activity in the ownership and administration of an immovable or a right of superficies and of buildings which form a part thereof (hereinafter immovable) enabling the members of the building association sole use of specified parts of the buildings.

 (2) The provisions of the Commercial Associations Act apply to building associations, unless otherwise provided by this Act.

 (3) A building association shall be liable for its obligations with all of its assets. The articles of association shall not prescribe the personal or additional liability of the members of the association for the obligations of the association.

 (4) The name of a building association shall include the words “building association” [building association].

 (5) A building association has no supervisory board. The provisions of subsection 55 (4) of the Commercial Associations Act apply to the general meeting.

§ 2.  Membership in building association

 (1) The rights and duties of a member of a building association arising from membership (hereinafter membership) are related to the part of the building enabling independent use, which has been assigned, by the distribution plan of the building, for the use of the member.

 (2) A member of a building association has the right, exclusive of other persons, to use a part of the building in the ownership of the building association which is delimited in real terms by construction and enables independent use, and which has been assigned to the member by the distribution plan of the building (the part of the building in the sole use of the member).

 (3) Members of building associations shall not receive dividends or other payments from net profit. The net profit of a building association shall only be used for attaining the goals of the association.

§ 21.  Share capital of building association

 (1) The share capital of a building association shall be at least 2500 euros.
[RT I 2010, 22, 108 - entry into force 01.01.2011]

 (2) The holding of a member of a building association in the share capital of the building association (contribution) shall correspond to the rate of his or her membership fee.

 (3) The share capital of a building association shall be specified in the articles of association of the building association and entered in the commercial register.
[RT I, 18.12.2012, 3 - entry into force 19.12.2012]

§ 3.  Parts of building in sole or common use

 (1) The part of a building in the sole use of a member of the building association is a dwelling or non-residential premises and parts of the construction works belonging thereto assigned to the member by the distribution plan of the building, which enable separate use and which can be altered, removed or added without violating the rights of other members of the association and without altering the external form of the construction works. A part of a garage with a permanent marking may also be part of the part of building in the sole use of a member of the building association.

 (2) The immovable, its parts and equipment prescribed for the preservation of the building, for ensuring safety or for common use even if they are located within the boundaries of a part of the building which is in the sole use of a member of the building association, are deemed to be in the common use of the members of the building association.

§ 4.  Foundation and entry in register of building association

 (1) A building association may be founded by at least two persons.
[RT I 2009, 51, 349 - entry into force 15.11.2009]

 (2) A building association is entered in the commercial register based on the petition of the management board of the association. Upon the existence of an immovable or a later acquisition of an immovable, the number of the register part in the land register and the address of the immovable in the ownership of the building association shall be submitted to the registrar in addition to the documents specified in subsection 7 (1) of the Commercial Associations Act. In addition to the articles of association of the building association, a copy, issued by the registrar of the state register of construction works or the authority which granted the relevant building permit, of the plan of the building in the ownership of or to be constructed by the building association shall be submitted, setting out the parts of the building in the sole use of each member of the building association identified by a membership number assigned to the member (hereinafter distribution plan of the building).
[RT I, 18.12.2012, 3 - entry into force 19.12.2012]

 (3) Upon the existence of an immovable or a later acquisition of an immovable, the number of the register part in the land register and the address of the immovable in the ownership of the building association shall be submitted to the registrar in addition to the documents specified in § 8 of the Commercial Associations Act.

§ 41.  Specifications for election of member of management board

  In the case provided for in § 53 and subsections 60 (11) and (12) of the Commercial Associations Act, any member of a building association may sign the record of voting, minutes of the general meeting or petition for entry of a member of the management board in the register.
[RT I 2008, 52, 288 - entry into force 22.12.2008]

§ 5.  Membership

 (1) The provisions of Division 1 of Chapter 3 of the Commercial Associations Act apply to acceptance into membership, taking into account the specifications prescribed in this Act.

 (2) In the case of transfer or succession of membership, the transferee becomes member by way of transfer of membership without the procedure for acceptance into membership.

 (3) Membership shall be registered in the commercial register. For such purpose, the interested person shall submit to a notary the documents certifying ownership provided by law. The notary shall forward any amendment to the data provided for in subsection 6 (3) of this Act to the commercial register. The procedure for forwarding the data shall be established by the Minister of Justice.
[RT I, 18.12.2012, 3 - entry into force 19.12.2012]

§ 6.  List of members of building association

 (1) Lists of members of building associations are maintained at the commercial register. The procedure for maintaining the lists shall be established by the Minister of Justice.
[RT I, 18.12.2012, 3 - entry into force 19.12.2012]

 (2) Memberships entered in the list of members of a building association shall be numbered.

 (3) For each member, the following shall be entered in the list of members of a building association:
 1) the name or title of a member;
 2) the personal identification code or registry code of a member and, if a person does not have Estonian personal identification code, the foreign personal identification code and the date, month and year of birth of the person;
[RT I, 13.03.2014, 3 - entry into force 23.03.2014]
 3) [Repealed - RT I 2007, 67, 413 - entered into force 28.12.2007]
 4) [Repealed - RT I 2007, 67, 413 - entered into force 28.12.2007]
 5) information on transfer or encumbrance of membership, and any restrictions related to membership;
 6) data on admission to membership;
 7) the membership number and the size of the related area of the part of the building in the sole use of the member;
 8) the rate of the membership fee expressed in the form of a common fraction.
 9) other information provided by law.

 (4) Data entered in the list of members are public. The Minister of Justice shall establish a procedure for the examination of the lists of members and for obtaining extracts thereof.

 (5) The member of a building association shall notify the building association of his or her telecommunications numbers, primarily telephone number and e-mail address.
[RT I, 13.03.2014, 3 - entry into force 23.03.2014]

 (6) If the residence or registered office of the member of a building association differs from the location of the immovable, the member shall notify the building association also of the postal address of his or her residence or registered office.
[RT I, 13.03.2014, 3 - entry into force 23.03.2014]

 (7) Unless the member of a building association has notified the building association of the postal address of his or her residence or registered office, the building association shall have the right to consider as his or her residence or registered office the location of a part of the building which is in the sole use of the member.
[RT I, 13.03.2014, 3 - entry into force 23.03.2014]

§ 7.  Specifications for termination of membership

  The provisions of §§ 16, 20–24 and 33 of the Commercial Associations Act do not apply to termination of membership in building associations.

§ 8.  Transfer of membership

 (1) A transaction by which acquisition or transfer of a membership is undertaken shall be notarised.

 (2) A transaction by which assignment of a membership is undertaken shall be notarised.

 (3) If one spouse enters into a transaction to assign a membership which is in the joint ownership of the spouses, consent of the other spouse is required. In the absence of consent, the transaction is void.

 (4) Upon certifying an assignment transaction, the notary shall send the amendments to the data specified in subsection 6 (3) of this Act to the registrar of the commercial register and the management board of the building association within two working days after certifying the transaction. The procedure for forwarding the data shall be established by the Minister of Justice.
[RT I, 18.12.2012, 3 - entry into force 19.12.2012]

§ 9.  Pledging of membership

 (1) Membership may be pledged.

 (2) A transaction constituting an obligation to pledge membership and a disposition must be notarised.

 (3) Upon certifying a pledge contract, the notary shall send the amendments to the data specified in subsection 6 (3) of this Act to the registrar of the commercial register within two working days after certifying the transaction.
[RT I, 18.12.2012, 3 - entry into force 19.12.2012]

 (4) Upon pledging of a membership, the rights related to the membership are performed by the member of the building association. The provisions concerning pledging of rights apply to pledging of membership unless otherwise provided by this Act. Upon assignment of membership, the pledge remains valid with regard to the transferee.

 (5) If a claim secured by pledging of membership is not performed, the pledgee has the right to demand compulsory execution by compulsory auction. The membership encumbered with a pledge shall be sold on the basis of an enforcement document at a public auction organised pursuant to the procedure provided by law.

§ 10.  Transfer of membership to successor

 (1) Upon the death of a member, the membership shall transfer to a successor of the member.

 (2) [Repealed – RT I 2009, 51, 349 - entry into force 15.11.2009]

§ 11.  Obligations of member of building association

 (1) A member of a building association is required to:
 1) maintain the part of building in the sole use of the member, and use such part of the building and the parts of the building in common use in a manner not exceeding the effects produced on other members by the normal use thereof;
 2) endure effects which remain within the limits specified in clause 1) of this subsection;
 3) enable other persons to use the part of the building in the sole use of the member if this is necessary for the maintenance of the parts of the building in common use. The member shall be compensated for damage caused by such use;
 4) pay the membership fee in the amount determined by § 13 of this Act.

 (2) A member of a building association is required to ensure compliance with the provisions of clauses (1) 1) and 2) of this section by his or her family members, temporary residents and persons who use the part of the building in the sole use of the member.

§ 12.  Obligation to transfer membership

 (1) If a member of a building association has repeatedly violated his or her obligations with regard to the building association or another member of the building association and other members of the building association consider such member’s continuing membership in the building association impossible, they may demand that the member transfer the membership.

 (2) In particular, transfer of membership may be demanded if:
 1) a member of a building association has repeatedly failed to perform the obligations listed in § 11 of this Act;
 2) a member of a building association has delayed payment of at least six months’ membership fee for more than three months;
 3) the activities of a member of a building association severely interfere with the use, by other members of the building association, of the parts of the building which are in their sole use.

 (3) Presentation of the demand specified in subsection (1) of this section shall be decided by the general meeting.

 (4) The provisions of subsection (1) of this section shall not be precluded or restricted by the articles of association.

 (5) In a member of a building association who has violated his or her obligations does not transfer membership in the building association, the transfer shall be decided by a court based on an action filed by the building association or at least one member of the association. The court shall make a judgment on the basis of, among other, the facts on which the demand for transfer is based.

 (6) A building association or a member thereof may demand execution of a court judgment on the basis of the provisions of the Code of Enforcement Procedure.

§ 13.  Membership fee and rate of membership fee

 (1) Based on a resolution of the general meeting, the members of a building association are required to cover the costs related to the maintenance and administration of the parts of the immovable in common use according to the rate of the membership fee. The membership fee for each member shall be calculated based on the rate of the membership fee related to the membership of the member.

 (2) A member of a building association is not required to compensate for expenses exceeding the amount necessary for the regular maintenance of the parts of the immovable in common use if the member did not consent to such expenses.

 (3) The rate of membership fee is a fractional number corresponding to the parts in sole ownership of a member, expressed in the form of a common fraction. The sum total of the rates of membership fees is 1. The rate of membership fee for each membership shall be determined by the articles of association of the building association.

§ 14.  Management plan

 (1) The board of a building association shall prepare a management plan for a financial year which contains the following information:
 1) an overview of the condition of the immovable in the ownership of the building association, and of planned actions;
 2) income and expenses planned for administration of the immovable;
 3) the obligations of the members of the building association upon covering, based on the rate of membership fee, of administration costs;
 4) size of payments to be made in the legal reserve;
 5) quantity and cost of fuel, heat, water and electricity consumed in the building association.
[RT I 2006, 43, 326 - entry into force 22.10.2006]

 (2) The management plan of a financial year of a building association is approved by the general meeting.

§ 15.  Administration

 (1) A member of a building association has the right to demand administration of the immovable in the ownership of the building association in compliance with the articles of association of the building association and the resolutions of the general meeting and, in the part not regulated thereby, pursuant to the interests of the members of the building association.

 (2) In particular, the following is deemed to be administration pursuant to the interests of the members of a building association:
 1) establishment of the internal rules regulating the use of the parts of the immovable in common use;
 2) regular maintenance of the parts of the immovable in common use;
 3) entry into a non-life insurance contract by the building association on the basis of the reinstatement value of the building, and insurance of the liability of the members of the building association;
 4) accumulation of a legal reserve with an appropriate size;
 5) preparation of a management plan;
 6) enduring measures necessary for building and maintenance of reasonable communications for a member of the building association;
 7) ordering of energy audit and energy performance certificate.
[RT I 2006, 43, 326 - entry into force 22.10.2006]

 (3) The energy performance certificate of a building shall be ordered by the management board of a building association on its own initiative or at the request of at least one member of the building association within one month as of the submission of the request.
[RT I, 25.05.2012, 5 - entry into force 09.01.2013]

§ 151. Specifications of requirements for controllers

  The controller of a building association may be a member of the building association unless the articles of association prescribe otherwise.
[RT I, 13.03.2014, 3 - entry into force 23.03.2014]

§ 16.  Amendment of distribution of rights of sole use and of rates of membership fee

 (1) A resolution to amend the articles of association whereby the distribution of the parts in the sole use of members or the rates of membership fees are amended is deemed to be adopted if at least two-thirds of the members of the building association who participate in the general meeting vote in favour. To make such amendment, the consent of the persons whose rights are prejudiced by the amendment is required.

 (2) A petition to be submitted to the commercial register to such effect shall contain, in addition to the resolution and minutes of the general meeting, the following:
[RT I, 18.12.2012, 3 - entry into force 19.12.2012]
 1) in the case of amendment of the rights of sole use, the amended distribution plan of the building;
 2) in the case of amendment of the rates of membership fees, the amended articles of association.

§ 17.  Dissolution of building association

  The consent of all members of a building association is required for dissolution of the building association. The provisions of Chapter 5 of the Commercial Associations Act, except for § 74 of the Commercial Associations Act, apply to other aspects of dissolution of building associations.

§ 18.  Dissolution of building association by division of immovable or right of superficies into apartment ownerships or rights of superficies in apartments, correspondingly

 (1) Differently than provided by Chapter 5 of the Commercial Associations Act, an immovable which has parts in the sole use of its members, or a right of superficies may, upon liquidation of a building association, be divided into apartment ownerships or rights of superficies in apartments, correspondingly, and such apartment ownerships or rights of superficies in apartments may be transferred to the members of the building association who use them based on membership.

 (2) An immovable or a right of superficies shall be divided into apartment ownerships or rights of superficies in apartments, correspondingly, based on the distribution plan of the building, taking account of the rates of membership fees of members of the building association.

 (3) A resolution to dissolve a building association by dividing an immovable or right of superficies into apartment ownerships or rights of superficies in apartments, correspondingly, is deemed to be adopted if at least two-thirds of the members of the building association who participate in the general meeting vote in favour.

 (4) If a building association has been founded for the purpose of constructing a building after which the immovable or the right of superficies are to be divided into apartment ownerships or rights of superficies in apartments, correspondingly, then, after the right for use of the building has been received, the members of the building association acquire the right to demand the division of the immovable with parts in sole use of its members, or the right of superficies into apartment ownerships or rights of superficies in apartments, correspondingly, and the dissolution of the building association.

 (5) If a building association is dissolved in the manner provided by this section, the claims of creditors shall not be satisfied out of the immovable or the right of superficies subject to division into apartment ownerships or rights of superficies in apartments, correspondingly.

 (6) If, during liquidation proceedings, it becomes evident that the assets of the building association are not sufficient to satisfy the claims of all creditors then, before transferring the apartment ownerships or rights of superficies in apartments to the members of the association, the apartment ownerships or rights of superficies owned by the association shall be encumbered by mortgages for the benefit of the creditors in order to secure their claims.

 (7) For encumbrance of apartment ownerships or rights of superficies with mortgages, the board of the building association shall prepare a plan which determines the distribution of mortgages, the transfer of claims and other relevant terms and conditions. The plan shall be submitted to the members of the building association and creditors for review.

 (8) The general meeting approves the plan specified in subsection (7) of this section after the expiry of a term of one month during which opinions on the plan can be provided. If a creditor does not provide consent to the plan, the resolution of the general meeting to approve the plan shall be void.

 (9) If a member of the building association or a creditor does not agree with the plan approved by the general meeting, the terms and conditions of the plan shall, at the request of the person who did provide consent to the plan, be decided by a court.

§ 19.  Protection of members of building association upon transfer of immovable

 (1) Upon transfer of an immovable in the ownership of a building association, the members of the building association who, based on the right for sole use arising from membership, have used as dwellings a part of the building which constitutes a part of the immovable shall retain their rights and obligations, arising from membership, with respect to the transferee within six months after the transfer.

 (2) The provisions of this section do not apply in cases where a building association is dissolved pursuant to the procedure provided in § 18 of this Act.

§ 20.  Implementing provisions

 (1) After the entry into force of this Act, establishment of legal persons which have members and the purpose of which is to support and promote the economic interests of its members through joint economic activity in the ownership and administration of an immovable or a right of superficies and of buildings which form a part thereof enabling the members of the building association sole use of specified parts of the buildings is permitted only pursuant to the procedure provided by this Act.

 (2) The Building Association Act shall apply to legal persons corresponding to the characteristics provided for in subsection (1) of this section, which have been established before the entry into force of this Act. Any member of a relevant legal person may demand that the articles of association of such legal person be brought into compliance with this Act.

 (21) [Repealed – RT I 2009, 51, 349 - entry into force 15.11.2009]

 (3) The management board of a legal person shall perform the acts necessary for amendment of the articles of association on the board’s own initiative or at the request of a member.

 (4) If the general meeting adopts a resolution to bring the articles of association of a legal person into compliance with this Act, the management board shall submit to the non-profit associations and foundations register a petition for making an entry concerning the amendment of the articles of association in the register, to which the minutes of the general meeting which adopted the resolution to amend the articles of association and the new text of the articles of association shall be appended.

 (5) A member whose rights are prejudiced by amendment of the articles of association of a legal person has the right to contest the resolution to amend the articles of association by filing a protest with a court within two months after the date on which the general meeting made the resolution.

 (6) If the general meeting fails to adopt a resolution to amend the articles of association, a member of the legal person has the right to file a petition with a court, and the court shall adjudicate on amendment of the articles of association. In such case the resolution of the general meeting shall be substituted by the court judgment which has entered into force.

 (7) Legal persons which correspond to the characteristics provided in subsection (1) of this section shall bring their articles of association into compliance with this Act not later than by 1 January 2008. After such date, the registrar of the non-profit associations and foundations register has the right to require that such legal persons bring their articles of association into compliance with this Act. The provisions of subsection 59 (5) and § 71 of the Commercial Code apply correspondingly.

 (8) This Act also applies to legal persons corresponding to the characteristics specified in subsection (1) of this section if an immovable in their ownership is in commerce as a movable.

 (81) [Repealed - RT I, 18.12.2012, 3 - entry into force 19.12.2012]

 (9) If the articles of association of a legal person corresponding to the characteristics provided for in subsection (1) of this section contradicts to this Act or the Commercial Associations Act, the provisions of law shall apply.

 (10) Legal persons which correspond to the characteristics provided for in subsection (1) of this section shall be automatically transferred from the non-profit associations and foundations register to the commercial register.
[RT I, 18.12.2012, 3 - entry into force 19.12.2012]

 (11) If a legal person which corresponds to the characteristics provided for in subsection (1) of this section has failed to bring its articles of association into compliance with this Act, it shall be entered in the non-profit associations and foundations register until bringing the articles of association into compliance, and thereafter it shall be automatically transferred into the commercial register.
[RT I, 18.12.2012, 3 - entry into force 19.12.2012]

§ 21.  Amendment of Dwelling Act

  [Omitted from this text.]

§ 22.  Amendment of Privatisation of Dwellings Act

  [Omitted from this text.]

§ 23.  Entry into force of Act

 (1) This Act enters into force on 1 January 2005.

 (2) Subsection 15 (3) of this Act enters into force on 1 January 2009.
[RT I 2006, 43, 326 - entry into force 22.10.2006]

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