After the first flat is sold: the developer as co-owner of the building, the repair fund and defects in common parts

While the developer owns the whole apartment building, it decides on the building alone. With the signing of the first purchase agreement and its registration in the Land Register, the position changes: co-ownership of the common parts arises in the building, together with a duty of management and voting by the owners. The developer remains within it, because all the flats it has not yet sold belong to it. For this period, the Act on Ownership of Flats and Non-Residential Premises (Act No. 182/1993 Coll.) imposes on it the same duties as on the other owners and, in addition, transfers part of its rights against the contractor to the buyers.

Management of the building from the first transfer

The duty to arrange management of the building through an owners’ association or a manager arises, in a building with more than three flats and non-residential premises taken together, on the day of the first transfer of ownership of a flat or of non-residential premises, and several forms of management cannot be agreed at the same time in one building (Section 6(1) and (3)). Since an agreement transferring a flat must contain the acquirer’s declaration of accession to the association agreement or to the management agreement (Section 5(1)(f)), the form of management must be chosen and the agreement prepared before the first sale.

Unsold flats do not come free of duties

Where not all the flats are transferred, the Act determines the developer’s position as follows:

Where ownership of all flats and non-residential premises in the building is not transferred, the original owner of the building is the owner of the remaining flats and non-residential premises in the building, a co-owner of the common parts of the building, the common facilities of the building, the appurtenances and the land, and has the rights and duties of an owner of flats and non-residential premises in the building.

— Section 5(7) of Act No. 182/1993 Coll. (unofficial English translation)

An owner’s duties include paying advance contributions monthly in advance to the operation, maintenance and repair fund according to the size of the co-ownership share (Section 10(1)) and paying for services and for management. The owner of a flat that is not being used cannot seek to be released from those duties (Section 10(7)). Empty flats still on offer therefore generate a monthly cost for the developer, which must be allowed for in the project budget and in the sales timetable.

Voting and its limits

An owner has one vote for each flat and non-residential premises (Section 14(3)). A developer to whom most of the units belong in the early stage can therefore effectively decide on the management of the building. Decisions adopted by its votes are nonetheless open to challenge: an outvoted owner may, within 30 days of notification of the result of the vote, apply to a court and may also seek temporary suspension of the effectiveness of the decision (Section 14a(11)). Decisions in which the developer’s interest plainly differs from that of the buyers, such as the level of contributions to the fund, the choice of manager or the use of common areas, should be prepared transparently and with regard to the fact that a court may review them.

Defects in common parts and rights against the contractor

For the developer, particular importance attaches to the provision that changes who holds the rights arising from defects in the building:

Rights and duties arising from liability for defects and for damage against the contractor of the building pass from the original owner of the building to the owners of the flats and non-residential premises in the building.

— Section 9(1) of Act No. 182/1993 Coll. (unofficial English translation)

Asserting the owners’ rights arising from liability for defects in the building, the common parts, the common facilities, the appurtenances and the land against third parties is a duty of the association or the manager (Section 9(5)(e)). The manager will, however, notify defects to the contractor under the contract concluded by the developer. The periods for notifying defects are not tied to the sale of the flats: the contractor has a defence where the customer failed to notify the defects without undue delay and, for structures, at the latest within 5 years of handover of the works (Section 562(2) of the Commercial Code), unless the contract provided a guarantee. In a building sold gradually, part of that period may therefore expire before the owners even learn of a defect.

Alongside this, flat owners assert defects in their own flats against the developer as seller under the purchase agreements. If the developer has not aligned the guarantees it gives to buyers with those given to it by the contractor, it may bear the cost of defects it can no longer recover from anyone.

What to prepare before the first sale

• The construction contract with the contractor: a quality guarantee covering the sales period, a defect-notification procedure that the manager can also use, and the contractor’s co-operation on handover of the building to the manager.
• A handover pack for the manager: technical documentation, the contract with the contractor to the extent needed to assert defects, handover protocols and guarantee terms.
• The management agreement or association agreement: prepared before the first transfer, with rules for the period in which the developer still owns most of the units.
• The project budget: contributions to the fund and payments for unsold units until they are sold.
• The purchase agreements: a complaints procedure for defects in the flats that dovetails with the contractor’s guarantees.

We prepare the sales documentation, including the materials for starting up management, within our sale of flats in a development project service, and we set the guarantees with the contractor in the construction contract for work. The requirements for the transfer agreement itself are examined in the question on the requirements of an agreement transferring a flat, and the periods applying against the contractor in the question on defects and guarantees under a construction contract.

How this will work under the new Civil Code

On 1 October 2026, the National Council of the Slovak Republic approved the new Slovak Civil Code, which will take effect on 1 July 2027. It no longer provides for a building to be divided into units by the first transfer agreement. Flats will arise through construction under an agreement on construction or by registering the building owner’s declaration in the Land Register. The declaration will set out the units and the purpose of their use, the common parts, the shares, the management rules and the person responsible for managing the building. If ten years have not elapsed since the building was completed, it will also name the contractor and the rights against it for non-performance. The declaration will not be used in buildings where flats arose under the existing legislation.

Contributions to the operation, maintenance and repair fund for unsold flats remain mandatory; the new code makes them due by the end of the month at the latest, but Act No. 182/1993 Coll. still refers to payments monthly in advance. There will still be one vote for each flat, and rights against the contractor will pass to the acquirers of the flats. What is new is that the developer will have to hand the contract for work and documents on asserting these rights to the person responsible for managing the building, at the latest on handing the building over for management. It will have to inform the buyer of them before the transfer. Arrears connected with building management will pass with the flat to the buyer, and the seller will be liable for them as guarantor.

Meetings and quorums will continue to be governed by Act No. 182/1993 Coll., which is not being repealed, and the overlap between the two sets of rules has not yet been resolved. For the construction of a building, the new code provides for a five-year guarantee period; for contracts between the developer and the contractor, this will be settled definitively only by the implementing amendment. Contracts for work concluded by 30 June 2027 will be governed by the existing legislation.

If the first sale falls in summer 2027, first check whether ownership of flats in the building has already arisen under the existing legislation. If not, prepare a building owner’s declaration to cover the possibility that the Land Register does not register the first transfer by 30 June 2027.

Status as of 22 October 2026: the act has been approved and was signed by the President on 20 October 2026, but has not yet been promulgated in the Collection of Laws. Until 30 June 2027, the rules described above in this article apply.