Assessment of Current Legal and Operational Status of Housing Partnerships in Uzbekistan

K:\IAC\THogan\EMAIL INCOMING\NEW REPORTS TO WORK ON\Carol Rabenhorst\ASSESSMENT REPORT\06901-017 UZ.rpt.doc ASSESSMENT OF CURRENT LEGAL AND OPERATIONAL STATUS OF HOUSING PARTNERSHIPS IN UZBEKISTAN Prepared for Local Government Initiative Phase II—Uzbekistan United States Agency for International Development Contract No. EEU-I-00-99-00015-00, Task Order No. 811 Prepared by Carol Rabenhorst, Irina Genstler, and Sabina Gradwal The Urban Institute THE URBAN INSTITUTE 2100 M Street, NW Washington, DC 20037 (202) 833-7200 www.urban.org November 2002 UI Project 06901-017 TABLE OF CONTENTS I. BACKGROUND AND OVERVIEW...........................................................................................1 A. Apartment Privatization............................................................................................................1 B. Creation of Housing Partnerships (TSJs)...................................................................................2 C. Conclusions............................................................................................................................2 II. LEGAL FRAMEWORK FOR TSJS............................................................................................2 A. Law on Partnerships of Housing Owners (1999)........................................................................2 B. Presidential Decree on Additional Measures to Develop Activities of Housing Partnerships (February 2002)......................................................................................................................3 C. Resolution of the Cabinet of Ministers, March 2002, on Additional Measures to Support Partnerships of Housing Owners..............................................................................................4 D. Reform of Management and Control of TSJs “In Practice”...........................................................5 III. RELATIONSHIP BETWEEN TSJS AND GOVERNMENT ENTITIES...........................................6 IV. LOCAL NGO TRAINING AND HOUSING-RELATED ACTIVITIES...........................................13 V. TSJ ACTIVITIES AND ATTITUDES.......................................................................................15 VI. RELATED USAID ACTIVITIES..............................................................................................16 VII. RELATED ACTIVITIES OF OTHER INTERNATIONAL DONORS............................................17 VIII. CONCLUSIONS...................................................................................................................18 ASSESSMENT OF CURRENT LEGAL AND OPERATIONAL STATUS OF HOUSING PARTNERSHIPS IN UZBEKISTAN I. BACKGROUND AND OVERVIEW From October 29 to November 5, 2002, as part of the start-up activities for the United States Agency for International Development (USAID) Local Government Initiative in Uzbekistan, a team of Urban Institute (UI) specialists1 conducted an assessment of the legal framework and current situation for creation and operation of housing partnerships (TSJs, in the Russian acronym). This report contains the findings of the assessment. The assessment was limited in time and scope, and was intended to provide a quick overview of relevant issues at the outset of the project. The information presented and conclusions drawn should be read with that in mind. As the project progresses, additional research will be undertaken to augment and clarify some of the topics discussed. A. Apartment Privatization Multifamily housing privatization began in Uzbekistan in 1993. Today, more than 95 percent of the former tenants of state-owned apartments are owners.2 The Privatization Law provided that ownership of common areas of apartments buildings was transferred to the residents along with their individual apartments. The share of common ownership was determined in accordance with the size of the individual apartment relative to the total size of all apartments. This familiar from of ownership is known throughout the world as “condominium.” In Uzbekistan, however, ownership rights and responsibilities have never been made clear to the owners. While the Privatization Law created de jure condominiums with proportionate ownership of the common property, most new owners were not aware of this. The privatization sales documents made no reference to transfer of an ownership share of common property; rather, the size in square meters of each apartment was simply increased to account for the rest of the building. Residents were confused about this seemingly arbitrary increase in the size of their apartments, and knew that this would increase their fees for communal services or maintenance, but their questions and complaints went unanswered. For the first six years after privatization, there was