Apartment Ownership Law and the Duties of a Building’s Board of Directors: A Complete Guide

Apartment ownership law is the legal framework for living in residential and office complexes, and it defines the rights and obligations of owners, residents, the manager, and the board of directors. Understanding this law prevents disputes and keeps building management lawful and transparent. In this plain-language guide we review the most important points of the law, the duties of the board and the manager, and how to deal with unpaid service charges.

What is apartment ownership law?

Apartment ownership law is the body of rules that governs joint ownership of a building’s common areas (such as stairwells, the elevator, the yard, the roof, and shared facilities) and the way a complex is administered, funded, and collectively governed. Under this law, shared costs are divided among the owners in a defined proportion, and the building is run by a manager or an elected board of directors.

What are the duties of a building’s board of directors?

In buildings with more than three units, the general assembly of owners elects a board of directors that takes responsibility for running the building. The most important duties of the board are:

• Maintaining the common areas: repair and upkeep of the elevator, facilities, grounds, and shared spaces.
• Calculating and collecting service charges: setting each unit’s share of the shared costs and collecting it on time.
• Preparing a budget and providing financial reports: accurately recording income and expenses and keeping things transparent for owners.
• Building insurance: fire and liability insurance for the common areas.
• Carrying out the decisions of the general assembly: implementing the owners’ collective decisions.
• Setting up a reserve fund: setting aside part of the service charge for major future repairs.

What are the building manager’s duties?

The board appoints a manager, from among its own members or from outside, to carry out its decisions. The manager is responsible for day-to-day affairs: maintaining common areas, paying shared utility bills, keeping financial records, informing residents, and following up on collection of service charges. The manager must keep the accounts transparent and report to the assembly at the end of the term.

Rights and obligations of owners and residents

Every owner or resident is obliged to pay their share of the shared costs and to use the common areas properly. Changing the building’s facade or using the common areas contrary to their purpose without the agreement of the other owners is not permitted. In return, every owner has the right to benefit from shared services and to access the building’s financial reports.

Service charges and the reserve fund under the law

The monthly service charge covers the current shared expenses, and the basis for dividing it (floor area, number of occupants, or a decision of the assembly) must be clear. It is recommended that part of the charge be set aside as a reserve fund for major repairs, so that residents are not hit by a sudden financial burden when the need arises. To learn how it is calculated, see our guide to accurate and fair building service charge calculation.

What should you do if a unit does not pay its service charge?

The law provides an enforcement mechanism for unpaid charges. The manager first notifies the debtor with a formal notice; if payment is not made, the manager may, following the proper legal procedures, withhold shared services (such as the elevator, heating, or common-area water and electricity) from the delinquent unit and pursue the debt through the registry office. Precise documentation of the debt and formal notification are the core requirements of this process.

How does building management software help with legal compliance?

Much of what the law requires – from fair service charge calculation to financial transparency and debt documentation – becomes far simpler and error-free with building management software. Hamkhoneh building management software calculates charges automatically, keeps the fund and expenses transparent, records each unit’s debt with a precise history, and enables notifications by SMS, including targeted messages to debtors. That means financial reports ready to present to the assembly and a dramatic reduction in disputes. To understand this area more fully, read our complete guide to building management software.

Frequently Asked Questions

From how many units is a building board of directors required?

Under the law, in buildings with more than three units whose owners number more than three people, holding a general assembly and electing a manager or board of directors is mandatory.

Can the manager cut off services to a delinquent unit?

Yes. After written notice and following the proper legal procedures, the manager may withhold shared services from the delinquent unit and pursue the debt through the registry office.

What is the basis for dividing the service charge?

Costs related to floor area are usually divided in proportion to a unit’s area, while shared consumption costs are often divided by the number of occupants or based on a decision of the assembly.

Is a building reserve fund mandatory?

Although a reserve fund is not explicitly mandatory in every case, it is strongly recommended for covering major repairs and is usually established by a decision of the assembly.

Further reading

• What Is Building Management Software and What Can It Do?
• How to Choose the Best Building Management Software: A Buyer’s Guide (2026)
• Best Way to Manage Building Service Charges for Residential Complexes

Complete guide: building management software