Final Report: Apartment building management and maintenance for 40 refugee households in Goris

EFFECTIVE MANAGEMENT OF MULTI-APARTMENT RESIDENTIAL BUILDING CONSTRUCTED FOR 40 REFUGEES IN GORIS

FINAL REPOT

PROJECT IS FUNDED BY: SWISS AGENCY FOR COOPERATION AND DEVELOPMENT (SDC)

PROJECT IS IMPLEMENTED BY: THE URBAN FOUNDATION FOR SUSTAINABLE DEVELOPMENT (UFSD)

NOVEMBER 2OO6, YEREVAN

TABLE OF CONTENTS

I. BACKGROUND ...................................................................................................................................... 2 II. PREPARATION STAGE ...................................................................................................................... 2 1. PREPARATION OF MATERIALS ........................................................................................................................ 2 2. INITIAL/COGNITIVE VISIT TO GORIS AND MEETINGS IN YEREVAN ................................................................. 2 III. MEETINGS WITH STAKEHOLDERS ............................................................................................. 2 1. ROUND-TABLE IN YEREVAN .......................................................................................................................... 2 2. SEPARATE MEETINGS AND AGREEMENTS ...................................................................................................... 3 a) Meeting with the Mayor of Goris ............................................................................................................. 3 b) Meeting with the Deputy Marzpet of Syunik ............................................................................................ 3 c) Meeting at the Migration Agency ............................................................................................................. 4 d) Meeting at Cadastral offices .................................................................................................................... 4 e) Discussion with UNHCR .......................................................................................................................... 4 f) Meeting with the Construction Company ................................................................................................. 4 IV. MEETINGS WITH RESIDENTS ........................................................................................................ 5 1. SITE VISITS .................................................................................................................................................... 5 2. INTRODUCTORY MEETING .............................................................................................................................. 5 3. TRAINING SESSIONS WITH 40 RESIDENTS ....................................................................................................... 5 4. TRAINING SESSIONS WITH NOMINEES ............................................................................................................ 6 V. PUBLIC INFORMATION MATERIALS ............................................................................................ 7 VI. PARTNERSHIP .................................................................................................................................... 7 VII. PROJECT RESULTS .......................................................................................................................... 7 VIII. RECOMMENDATIONS ................................................................................................................... 7

1

I. BACKGROUND On July 2006 the Swiss Agency for Development and Cooperation (SDC) funded the Urban Foundation for Sustainable Development (UFSD) to implement a project for Goris refugee families called “Effective Management of Residential Building for 40 Refugees in Goris.”

The goal of the Project was to promote the establishment of Condominium Association in newly constructed residential building for refugee families in Goris through conducting series of training sessions regarding multi-apartment building management, condominium associations, budgeting, and fundraising. The duration of the Project was 3 months.

II. PREPARATION STAGE 1. Preparation of Materials UFSD started preparing materials for introductory meeting with beneficiaries. Such activities have been carried out over time during all project implementation period for trainings with residents and nominees for community active group (CAG). Particularly, training packages for beneficiaries included materials regarding description of multiapartment building, their characteristics, types of ownership, multi-apartment building maintenance mandatory requirements, owners’ rights and responsibilities, condominium associations, condominium structure, establishment, and registration. Besides, other necessary materials were prepared during the project implementation period: reports (for round table and final report), baseline and follow-up questionnaires and analysis of responses (Annex 1), analysis of beneficiaries based on their locations in Goris (Annex 2) preparing a multi-apartment building management guidebook for building owners, etc.

2. Initial/Cognitive Visit to Goris and Meetings in Yerevan UFSD made an initial visit to Goris to have clear picture on real situation. During that visit, UFSD visited the building, met with building engineer and workers, visited temporary shelters of beneficiary refugee families and met with some of them, had a meeting with the Mayor of Goris.

In Yerevan, UFSD met with the Agency of Migration Refugee Department Head and SDC National Officer/Program Manager.

III. MEETINGS WITH STAKEHOLDERS The purpose of the meetings with stakeholders and partners was to receive information about the newly constructed building, on the different issues connected with the beneficiaries, which was necessary for designing training sessions and providing accurate information to the beneficiaries. The meetings also aimed at gaining stakeholders support and assisting them in unifying and directing their efforts for successful implementation of the project.

1. Round-Table in Yerevan On August 10, UFSD convened roundtable in participation of all stakeholders and partners of the Project: SDC, UNHCR, Migration Agency, Syunik Governor’s Office, Goris Municipality (not attended), and UFSD. UFSD presented findings identified during the initial visit in Goris and meetings in Yerevan.

The following findings were presented (Annex 3):

2

    

Absence of organized community of refugee families Absence of final approved list of 40 refugee families Concern about the sale of newly allocated apartments foreseen to be privatized Concern about the high rate of participation of refugee families in the trainings Difficulties responding to the questions of ineligible refugee families related to reasons of their non-participation in the project.

UFSD provided the following recommendations to address the aforementioned issues:  Additional meetings to promote unification of the community  Necessity for final list before meeting with beneficiaries  Employ restriction on apartment sale  Necessity for stakeholders and partners support to ensure high rate of participation  Provision of beneficiary eligibility criteria.

During the meeting all stakeholders and partners committed to support the implementation of the project and signed the minutes of the meeting (Annex 4).

2. Separate Meetings and Agreements a) Meeting with the Mayor of Goris UFSD met with Nelson Voskanyan, Goris Mayor in Goris. The Mayor welcomed the idea of introducing effective building management and committed to support UFSD in Project implementation. The Mayor told that the Municipality always would assist the strengthening of the newly established condominium association and added the Municipality was going to install garbage cans near the building.

Since the Mayor had not been present in the roundtable of stakeholder and partners, UFSD briefed him about the issues discussed and recommendations made.

The Mayor agreed with the suggestion of putting apartment sale restriction on the newly constructed building units, also assigned the Municipality Construction Department/City Architect to provide for UFSD all necessary documentation regarding the building. Some of those documents (decision about land allocation, construction permission, etc.) have been already provided for UFSD. b) Meeting with the Deputy Marzpet of Syunik UFSD met with Ara Dolunts, Syunik Deputy Marzpet in Kapan. Mainly legal issues regarding the building and owners were discussed. Particularly, UFSD proposed its support in assisting the regional or local government (whoever would take over the first ownership to the building) to issue one title certificated for the whole building rather than 40 titles for each apartment of the building, which would be very expensive for the first owner of the building.

UFSD also discussed with Syunik Deputy Marzpet the issue of taking over the first ownership rights to the building, since before residents start individually applying for privatization of apartments, apartments should belong to some entity with ownership rights. It can be either regional government or local government. UFSD advised to register regional government’s right to the building, since the Syunik regional government is a co-financer of the building construction, if the government is the owner,

3

the ownership registration package will be much cheaper than in case of ownership of the local government.

Deputy Marzpet was for UFSD proposal to impose sale restriction on the privatized apartments of newly constructed building in Goris. c) Meeting at the Migration Agency At Migration Agency UFSD discussed with the Ara Harutyunyan, Refugee Department Head the issue of registration of ownership rights. Migration Agency clarified on the process of privatization of apartments by refugee families. According to the Agency, families should submit application to the regional government and based on the decision the Governor, family can be issued with title certificate at cadastre office.

UFSD advised to register ownership rights of the residents to the apartment based on the donation contract which would be safer ground for new owners.

UFSD raised also concerns of residents with regard to using basement of the building for their household purposes. The Department Head informed that usually basements were allocated to the residents of the building but for Goris building’s basement there had not been a decision, yet.

UFSD informed about the concern of residents with regard to the equipping of apartments. The thing is that necessary furniture, especially in hostels and hotels where refugees reside temporarily belongs to a given institution (hotel, hostel, etc.) and entering a new home, most of beneficiaries reported not to have any conveniences to sleep in and/or sit on. The Migration Agency informed that the Government would support refugee families in this issue. d) Meeting at Cadastral offices To facilitate and streamline privatization process, UFSD met with the officials at Central Cadastre Committee. Agreement has been reached as to provision one ownership title for the whole newly constructed building in Goris. e) Discussion with UNHCR UFSD lawyer discussed with UNHCR lawyer some issues regarding newly constructed building. Particularly, the issue of imposing sale restriction on the privatized apartments of newly constructed building in Goris was discussed. It was clarified that in previous years UNHCR had experience in putting sale restrictions on the apartments privatized by refugees, but currently UNHCR policy did not allow imposing sale restriction. f) Meeting with the Construction Company UFSD met with the representatives of Construction Company (including the Mr. Budaghyan, Head of Contractor’s organization) on the construction site and clarified on some issue raised during the meetings by the future residents.

Telephone cables were installed and residents might have access to the telephone.

Gas line will not be installed by the contractor; however another residential building standing very close to newly constructed one, has gas line installed and residents can

4

apply to the relevant gas authority and install (as a community or individually) gas line for the building.

Area not far from the building was allocated to serve as a place for garbage cans.

IV. MEETINGS WITH RESIDENTS UFSD divided meetings and work with beneficiary families in several stages: 1. Site Visits In the beginning of the Project UFSD conducted site visit to Goris to have an idea about the refugees their living conditions, and their relationship among each other as members of future community. Particularly, in Goris hotel, where about one third of future beneficiaries of the building are living, UFSD, after talking with the residents as a group and individually, figured out that there was some tension among households and it was demonstrated by them not only during group conversation but also during individual meetings with UFSD. Some of them were assumed to be ineligible refugee families, who were failed in the Government Housing Certificate Program and who were dissatisfied with the other housing offer by the donor (social housing), others were eligible family representatives. After that initial investigation, UFSD concluded that before starting main training sessions, there would be a need for an additional meeting aimed at making beneficiary families closer more tolerant.

2. Introductory Meeting Next meeting UFSD conducted with eligible beneficiary families. The purpose of the meetings was to have an idea on how beneficiaries are ready and willing to take care of and manage their own building and receive additional information which will assist them in it; to make beneficiary families closer as future neighbors.

Two meetings were arranged and 20 families were involved in each meeting. Families were briefed by UFSD about the purpose of the Project. Family representatives represented themselves and got introduced with each other. Each of them told about their lost building, the state of their relationship with neighbors, about current living conditions and relations with neighbors, how were they caring of their temporary shelters. The atmosphere of the meeting surprisingly was positive as compared to the previous site visit in Goris hotel. One of the reasons, according the UFSD, was that people need a good attitude to them, they appreciated that somebody allocated time for them and is interested with them.

In the end of the meetings anonymous questionnaire developed by UFSD, was delivered to participants to fill out. The questionnaire aimed at giving clue about the income of families, relations among families, and their knowledge about multi-apartment building management. Analysis of questionnaire is presented in the annex (Annex 4).

3. Training Sessions with 40 Residents For the next meeting, refugee families were divided in 3 smaller groups. The groups were formed based on the following methodology: again one of the goals was to make future neighbors as closer as possible, promote communication among them. To this end, UFSD formed groups in a way that each group included families that would live in future directly as neighbors: next door, same floor, or neighboring floor (s). Having the 5

apartment numbers allocated to the refugees, UFSD grouped numbers in a way that households which apartments have the numbers next to each other and on the same floor were invited as separate training groups to the same meeting. During the training future residents were communicating to each other without knowing that they were possibly doing this with their direct neighbor.

UFSD trainers divided training session into the following sections: a) Lecturing training topics: - Introduction to multi-apartment building management - Types of ownership for multi-apartment building - Mandatory requirements for multi-apartment building maintenance - Rights and responsibilities of the owners of multi-apartment building - Management types of to multi-apartment building based on Armenian legislation - Introduction to Condominium associations. b) Questions and Answers section: The goal of this section was to promote communication among future neighbors of the building and answer to the questions of the regarding the training topics. c) Nomination of candidates for CAG In this section of the training, the project management team proposed participants of the training to nominate candidates, who should take deeper training courses and represent the interests of the building residents, before the building management body is established.

Each family representative in writing nominated a candidate(s) to be elected as CAG member.

4. Training Sessions with Nominees The goal of this training session was conduction more detailed training course with the building residents who were nominated by their neighbors as candidates to be elected as CAG. Training folder included materials related to: - Multi-apartment building management - Condominium associations - Basic Budgeting - Introduction to fundraising Trainers of UFSD presented the participants of the training types of ownership in multiapartment building, mandatory requirements for multi-apartment building maintenance, rights and responsibilities of the owners of multi-apartment building structure, condominium

6

associations, registration procedures, condominium budget and cost estimate, basics of fundraising and proposal writing. UFSD also introduced participants to the building characteristics.

V. PUBLIC INFORMATION MATERIALS During the implementation of the project UFSD developed public information materials regarding multi-apartment building management and maintenance and handed them out to the participants of the trainings.

Based on those materials, UFSD published Multi-Apartment Building Management and Maintenance Guidelines for the future management body of the building.

VI. PARTNERSHIP During the Project implementation successful partnership was created between UFSD, UNHCR, local (Municipality), regional (Syunik Marzpetaran), central (Migration Agency) governments, local non-governmental organizations (Human Rights Protection Armenian Center Goris Branch, Yerevan Press Club Goris Branch, and Healthy Generation of Mountain Residents).

Especially UFSD appreciates the support of Human Rights Protection Armenian Center Goris Branch. This organization kindly provided space for providing meetings with refugees as well as being closely worked with refugee in past years, it ensured two way communication between UFSD and refugees and vice versa.

VII. PROJECT RESULTS 1. 40 residents are trained about the basics of multi-apartment building management and maintenance 2. 10 residents being nominated by their neighbors as their future leaders were trained more thoroughly on establishment, registration and management of condominium association, budgeting, fundraising and proposal writing.

3. Multi-Apartment Building Management and Maintenance Guidelines was published for the future management body of the building VIII. RECOMMENDATIONS •

Need for Preliminary assessment.

•

It is more appropriate to conduct trainings with the residents who have already registered their ownership rights.

•

Usually, privatization is costly: it’s needed to regulate this issue by multi-lateral Agreement by including registration fees in the donor organization cost estimate or in the co-financing of local/central government.

•

Provide opportunities for residents to choose their residential status: ownership rights or usage rights (including tenancy right and right of use).

•

Avoid creation of the army of poor owners. Should be considered not only the willingness of beneficiaries to become owners but also their real capabilities in terms of carrying burden of the property which belongs to them with ownership rights.

7

•

Provide opportunities for the residents to use common areas of the building for the purpose of recreation, household needs, as an office space for management body, and income generation aimed at the maintenance of the building.

•

Government needs to find donors to support the management body at initial stage in order ensure proper management and maintenance of the building.

•

Privatization process should be arranged in a way that each title includes clear information about the property rights to apartments, basements and other common areas.

•

To be comprehensive this activity should be continued to form condominium and follow-up sustainability.

COMMENTS ON THE GROUNDS OF ACQUIRING OWNERSHIP RIGHTS TO THE RESIDENTIAL REAL ESTATE AND ON OTHER LEGAL ISSUES Existing legislation According to the RoA Civil Code all citizens, legal entities and the Republic of Armenia can acquire a property (including residential real estate) with ownership right.

Grounds for acquiring ownership rights are specified in the Article of 172 of RoA Civil Code.

1. The right of ownership to new property made or created by a person for itself with an observance of a statute and other legal acts is acquired by this person.

The right of ownership to fruits, products, and incomes received as the result of the use of property may be acquired on the bases provided by Article 144 of the present Code.

2. The right of ownership to property that has an owner may be acquired by another person on the basis of a contract of purchase and sale, of barter, of gift, or on the basis of another transaction for the alienation of this property.

3. In case of the death of a citizen the right of ownership to property belonging to him shall pass by inheritance to other persons in accordance with a will or by a statute.

4. In case of reorganization of a legal person the right of ownership to property belonging to it shall pass to the legal person (or legal persons) that are the legal successor of the reorganized legal person.

5. In cases and by the procedure provided by the present Code, a person may acquire the right of ownership to property that does not have an owner, to property, the owner of which is unknown, or to property that the owner has abandoned or to which he has lost the right of ownership on other bases provided by a statute.

6.A member of a housing, vacation-home, garage, or other cooperative, and other persons having the right to share accumulation, who have fully made their participatory share contribution for an apartment, vacation-home, garage, or other structure, provided to these persons by the cooperative acquire the right of ownership to this property.

8

The ownership right to the newly created real estate arises at the moment of its state registration (RoA Civil Code, Article 173): The ownership rights to the property are registered based on the RoA Law # 295 on State Registration of Rights to the Property as of April 14, 1999. Particularly, Articles 21 and 24 of the aforementioned law specify the procedures of implementation of state registration and the list of documents necessary to submit to the territorial sub-division of the real estate cadastre for that purposes.

Article 21. Cadastre Files Compiled For Each Real Estate Unit Cadastre Files compiled for each real estate unit include documents evidencing rights and encumbrances to particular real estate unit, as set below. a.

On plots allocated to subjects of real estate as well as allocated with the right of ownership or use (homesteads, horticultural (dachas), for construction and service of residential dwellings, for running peasants’ and peasants’ collective farms, as well as for urban development) and buildings and constructions; b.

Agreements on real estate alienation (acquisition), lease, sublease, use, mortgage, exchange and servitude as well as court decisions with regard to the servitudes; c.

Decisions or agreements on transferring lands or buildings and constructions for permanent use; d.

Agreements on the land boundary consolidation, subdivision or modification; e.

Decision and agreements on the encumbrances to the real property use; f.

Decisions, sentences and verdicts on termination of the right of ownership to the real estate; g.

Decision and sentences on termination of the right of use or lease to the land, building and construction; h.

Decisions on renunciation of real property or a part of it by the owner; i.

Documents evidencing ownership rights to real property and encumbrances of rights, origination, conveying, modification and termination thereof.

Article 24.

Implementation of State Registration

For the purposes of state registration subjects holding rights to the real property shall submit documents stipulated by Article 21 of this Law together with the application to the local subdivision of the State Register of Real Property.

Local subdivisions of the state register verify the conformity of the submitted documents with the legislation of the Republic of Armenia.

In the event of unconformity, the submitted documents shall be returned with compulsory comments on drawbacks within five days after the receipt. Returned documents, with relevant additions and corrections, shall be submitted again within 5 days from the day the documents were returned to the owner (user).

Cadastral file on real property is compiled after checking the documents and registered in the real property state registration unified registry with the appropriate changes in the cadastral maps.

Rights to the property shall be considered registered from the moment of registration in the Registry.

9

Information on the registration of rights to the property shall be transferred to the Information Center of the state register of real property within twenty four hour time (this provision shall be valid from the year 2001).

The state registration shall be carried out within 15 days from the date the documents are submitted to the local subdivision of the State Register of Real Property.

Rights to personal property are subject to state registration in cases envisaged by Law. Regulations on the state registration of rights to personal property shall be defined by the Government of the Republic of Armenia.

10

ANALYSIS OF OPTIONS FOR SANDI-DZOR, GORIS BUILDING PRIVATIZATION Below is presented potential mechanisms of acquiring ownership rights to the apartments of the newly constructed multi-apartment residential building in Goris Sandi Dzor district for 40 refugee households taking into account that the Agreement on Cooperation Aiming to the Construction of Permanent Shelter for Refugees in Goris as of 28.07.2004, signed among five parties does not tell anything about who should take over the first ownership rights to the newly constructed building Syunik Regional Government on behalf of the Republic of Armenia (state) or Goris Municipality?

OPTION 1 If a newly created property, that is, the multi-apartment building constructed for refugee households is recognized as an ownership of the Republic of Armenia (which, in our opinion, derives from the RoA applicable legislation, particularly from the requirements of the RoA Law HO-458-N as of 20.11.2002 on Allocation of Constructed Apartments with Ownership Rights to the Refugees Displaced from the Republic of Azerbaijan from 1988-1992, as well as from several international treaties, agreements and memoranda of understanding concluded by the Republic of Armenia), then taking into account the legislation gap concerning legal regulation of privatization of the state-owned housing stock, and based on the already existing practice in RoA, it is expedient that apartments of residential multiapartment building constructed under SDC funding and Syunik Regional Government cofunding for 40 refugee households be privatized separately by refugee households based on Syunik Governor’s decision. UNHCR’s experience in allocation and privatization of apartments for refugees in other Regions of Armenia also confirms the expediency of this approach. This approach is cheaper in terms of state fees, since when registering ownership rights at the territorial cadastral sub-division based on the decision one needs to pay state fee amounting AMD 1000 and cadastral fee for issuance of ownership title and master plan amounting AMD 11000.

From legal perspective it is correct to allow refugee households to privatize the state-owned apartments based on the donation agreement or allocation agreement with a relevant state authority, which derives from the content and logic of RoA Civil Code and clearly defines rights and responsibilities of the Donor and the Recipient of donation.

The Article 3 of the RoA Law HO-458-N as of 20.11.2002 on Allocation of Constructed Apartments with Ownership Rights to the Refugees Displaced from the Republic of Azerbaijan from 1988-1992, also specifies the allocation agreement as a ground for provision of apartments to the refugees with ownership rights. However, imperfectness and unclearness of the following articles of the law do not allow to definitely assert that apartments should be privatized based on the allocation agreement signed with the relevant authority, moreover it is not in the interest of refugees, because agreements regarding the alienation of the real estate (in this case non-refundable allocation or donation agreements) are subject to notary certification, which assumes payment of set out fees: state duty and fee for notary services (AMD 5000 + AMD 5000-10000), unified official information about restrictions on real estate necessary for starting notarization process (AMD 7000), state duty for state registration of ownership rights- AMD 20000 and cadastral fee for master plan and issuance of ownership title – AMD 11000. In General registration of rights deriving from the alienation agreements will cost about AMD 48000-53000 (It should be mentioned that the aforementioned are

11

official fees in Armenia, actually they can be more, if we take into account misappropriation and corruption).

OPTION 2 If newly made or created property that is, multi-apartment building constructed for refugees, should be recognized as an ownership of Goris Municipality and only later will be alienated to the refugee households, then first of all Goris Municipality should carry out the first state registration of the aforementioned multi-apartment building, and then alienate 40 apartments one by one to the refugee households. To carry out state registration, Goris Municipality should submit the following documents to the territorial sub-division of the real estate cadastre:    

Decision on allocation of the community owned land for construction purpose, Building design approved in a manner specified by Armenian legislation, which should be in compliance with the actual condition of constructed building, Construction permit, Construction completion document (Completion Act).

The responsible department of the real estate cadastre territorial sub-division carries out measurement, cameral activities, and physical inspection. For each activity separate cadastral fees are specified. Attached please find the Order of the State Committee of the Real Estate Cadastre # 89-K as of February 12, 2002, in which tariffs of all services are mentioned. State duty for the first registration of the real estate is foreseen AMD 1000. The ownership rights may be registered to the each of 40 apartments separately. In this case, Goris Municipality will have 40 certificates of ownership for 40 apartments and the Municipality has to pay AMD 11000 for each apartment. However, we have experience when 1 certificated of ownership may be issued for the whole building, which will have master plans of 40 pages for each residential unit. If necessary other options may be discussed with the real estate cadastre state committee to come up with cheaper options for privatization in future.

To carry out the first state registration, Goris Municipality has to make some payments (measurement, cameral activities, and physical inspection). It is difficult to say at this moment how much will it cost because it depends on the sizes of land plot and building, however we do not have the final design and the cadastre measurement results. Based on our estimate it will cost from AMD 30000-50000.

During the alienation of the community owned property, all adult members of the household have to com to notary office and in the presence of the notary sign either apartment allocation or donation contracts.

A person authorized by the Mayor can sign the contract. The Mayor also can sign the contract earlier and does not have to come to the notary office, if notary recognizes the Mayor’s signature and can certify it. RoA applicable legislation provides such possibility, however, in each separate case it is the notary who makes such decision.

The acceptable privatization practice based on the Governor’s decision is as follows: the household member visits the Governor’s office receives the decision and submits it to the real estate cadastre territorial subdivision to register co-ownership rights of household members to the apartment.

12

While being agreed that the registration of ownership rights based on the Governor’s decision is easier, cheaper and appropriate, we would like to mention also that it would be reasonable to send to the real estate cadastre territorial subdivision the list of refugees with household members (who will become co-owners of the apartment) approved by the Governor, to avoid possible inaccuracies.

At the same time, the circumstance that the Syunik Governor’s office is located in Kapan may create difficulties in the process because to correct inaccuracies residents have to visit Governor’s office for the second time.

My personal opinion differs from the acceptable practice. I am for signing contracts with refugee households, which should be notarized and registered at cadastre, even if this way is expensive, however it is possible to include those costs in the estimation of costs for building construction, find other donors or put those responsibilities on the community in the Memorandum of Understanding.

One more comment (which will be covered by our report): before issuance of title it is unclear that what kind of rights refugee households will have to their apartments, which will create considerable difficulties for refugee households in signing agreements with the service providers: water, electricity, communication companies, etc.

Recommendations basement areas of the building constructed for 40 refugee households in the Sandi Dzor District, Goris Taking into account that the privatization process of the apartments of newly constructed residential building in Goris has not been started yet, Taking into account that there is not a final decision, yet on targeted usage of newly constructed building’s, basement areas, Taking into account that the future residents of the building are interested in, willing and find it very important to provide part of basement area to them for taking care of their individual household needs (as a storage) and the other part for arranging recreation/leisure of all owners of the building, as well as the issue of provision of office space for the condominium to be created in future, Taking into account that the provision of an office space for the building management body in the building is the most important pre-condition for the sustainability and effective activity of the condominium, Taking into account that there will be a need to ensure sustainable sources of income for effective management, sustainable maintenance and operation of the areas of common share ownership of the building, The Urban Foundation for Sustainable Development recommends.

1. Before starting the privatization process, provide 6-10 sq.m. area out of total area of the basement (the exact size will be determined later based on measurements) to each of 40 households either with use or ownership rights, stretching the length of the building (from the yard side) for taking care of their individual household needs. The Urban Foundation has 13

talked to the construction organization (Budaghyan, Vararakn Ltd.) and he found it possible to equally allocate areas to 40 households.

2. If parties of the Agreement wish to allocate the basement areas with ownership right, than it is desirable to allocate them with one decision along with the apartment allocation.

3. The rest of basement areas register as a common share ownership of the building owners.

4. Allocate 25-30 sq.m. office space out of commonly owned basement area for the future management body of the building. This are should be allocated out of those sections of the building, which have separate entrance and window.

5. Allocate are out of commonly owned basement area for building residents for arranging their recreation/leisure and other events.

6. The rest part of the commonly shared ownership of the building basement provide to the other organizations, including NGOs, based on the lease agreement to ensure sustainable income generation which will be directed the effective management and maintenance of the common share ownership of the building.

Taking into account the willingness of the future residents of the building to establish condominium association the Urban Foundation at its own expenses will support the process of establishment and registration of condominium association in the building by taking care of registration expenses including ordering and obtaining stamps for the Condominium Association.

14

Annex 1

Swiss Agency for Development and Cooperation

The Urban Foundation For Sustainable Development

Analysis of Survey Conducted by the Urban Foundation throughout the 40 refugee beneficiaries in Goris within the framework of “Effective Management of Residential Building for 40 Refugees in Goris” funded

by SDC On August 18, 2006 the Urban Foundation conducted a survey among the 40 refugee families in Goris within the framework of the project “Effective Management of Residential Building for 40 Refugees in Goris” funded by SDC. By conducting this survey, the Urban Foundation aimed at identifying information about the future residents of the building and their relationships, which would be helpful for the Urban Foundation to correctly design, training course, topics and conduction process, to understand based on collected information, whether future residents of the building have capacity, ability, and willingness to manage and maintain their building.

Over 85% (34 out of 40) refugee beneficiaries participated in the survey. Out of respondents, 67.65% (or 23) were 26-55 years old, 23.53% (or 8) were over 56 years, and 8.82% (or 3) were less than 25 years old. This means that more than two third of the building future residents are physically capable for taking care of the management and maintenance of their building.

About 80% (or 26) of respondents have more than 3 family members. Most of the respondents (64.71% or 22) are living in “collective centers” (Hotel Goris and in hostel at the address Komeritmiutyan 2) as a sort of group, others (about 35.29% or 12) are scattered in anther public assets and temporary shelters as their individual residences throughout Goris city. Nearly all respondents (97.06% or 33) have been living in Goris for more than 10 years.

Most of the respondents (94.12% or 32) reported to have refugee families as their neighbors and about 96.88% (or 31) have friendly or good relations with them. Only about 11.76% (or 4) of respondents reported to be in conflict with their neighbors (non-refugees). Most of respondents (94.12% or 32) considered relationship with neighbors important. It can be assumed that there is a possibility to expect cooperation among building residents connected with management and maintenance of a new residential building.

32.35% (or 11) respondents reported that they spent up to AMD 20000 and 41.18% (or 14) up to AMD 50000 for their food, clothing, transportation and utilities during last time. For the same period, for only utilities about 57.58% (or 19) respondents spent up to AMD 5000,

15

30.30% (or 10) up to AMD 10000, the rest of respondents (about 12.12% or 5) spent more than AMD 10000 for utilities during last month.

41.18% (or 14) of respondents had experience in paying randomly additional money (in addition to regularly paid state fees) for addressing problems with regard to their building.

35.71% out of them (or 5) paid up to AMD 2000 and 64.29% (or 9) more than AMD 2000.

57.14% (or 8) mentioned that payment was voluntary and the other 42.86% (or 6) reported that it was mandatory. Respondents paid because they had money (8.82% or 3), they trusted the person who collected money (20.59% or 7), they were sure that money collected will be spent to address the targeted problem (14.71% or 5), they had money and they trusted the person who collected money (2.94% or 1), they had money and they were sure that money collected will be spent to address the targeted problem (5.88% or 2), they had money, they trusted the person who collected money, and they were sure that money collected will be spent to address the targeted problem (24.14% or 7). The rest of respondents (20.59% or 7) did not provide any answer. It can be expected that refugees mostly tend to pay if they had money, they trusted the person who collected money, and they were sure that money collected will be spent to address the targeted problem.

Vast majority (88.24% or 30) preferred having an apartment with ownership rights and stated that they would live there (100% or 34) rather than sell, lease, or just lock without living.

This means that establishment of management body in this building is important.

88.24% (or 30) of respondents had no idea about a Condominium and would like to have more detailed information (94.12% or 327) about them. This means that trainings on Condominiums as a way of multi-apartment building management is justified.

16

Annex 2

Swiss Agency for Development and Cooperation

The Urban Foundation For Sustainable Development

EFFECTIVE MANAGEMENT OF RESIDENTIAL BUILDING FOR 40 REFUGEES IN GORIS

Project Beneficiaries Selected by UNHCR ## 1

Collective Center Hotel Goris

Address

2

Hostel

Komeritmiutyun 2

5

Containers

Mashtotsi 151

3

Wooden temporary shelters

Arevshat 2

4

HES administrative building

Tatevatsu 2

7

Arzumanyan 1

6

Vorotan channel administrative Building ATDz administrative building

8

Cable site administrative building

Avangardi 22

Total

Arakelyan 30

# of Households

15 11 4 3 2 2 1 1 39

17

Annex 3

Swiss Agency for Development and Cooperation

The Urban Foundation For Sustainable Development

Effective Management of the Residential Building for 40 Refugees in Goris Funding Organization: SDC Implementer: UFSD At the preparatory stage of Project implementation the following issues were identified: 1. Assumption: before starting the Project, it was assumed that there was an organized community in Goris (particularly in Goris Hotel).

Reality: our visit to Goris and meeting with refugee families in Goris Hotel indicated that the real picture is different: refugee families were not unified, did not have good relations, there was not feeling that they had willingness and commitment to jointly solve common problems.

Risk: mere conduction of trainings and increasing awareness of refugees is not sufficient for success and cannot promote the effective practicing of the received knowledge, if there is not there is not mutual understanding and favorable environment.

Proposed Solution: there will be a need for longer, additional meetings, efforts and work aimed at bringing families closer, forming and sustaining a community.

2. Assumption: it was planned to start activities with the list of refugees provided by UNHCR. Reality: during one of preparatory meetings it was figured out that there was a final approved list of refugees available. UFSD does not know whether it matches with the list provided by UNHCR or changes are made in the list.

Risk: families, which are not on the approved list, might be invited to the trainings.

This can create expectations for these families connected with being selected as a resident for the newly constructed building, which in future will cause inconveniences and difficulties for the Municipality and other stakeholders. And the reverse, families who are not on UFSD list but are on the approved list will not be invited for the trainings, which can also cause undesirable consequences.

Proposed Solution: in order to start training sessions as soon as possible, UFSD needs to be provided with a copy of the final approved list of beneficiaries signed and sealed appropriately.

3. Assumption: it was foreseen that after the allocation of apartments refugee families would be allowed to privatize them.

Reality: this approach was confirmed during the meetings with stakeholders, moreover it was figured out that apartments might be privatized immediately based on the Municipal asset alienation contracts.

18

Risk: during the meetings in Goris it was figured out that there were rumors that there were many interested people in Goris who were ready to pay even a little bit more than the market price to move to the newly constructed building and comfortable apartments. On the other hand, refugee families (most of which are needy) based on the rumors tend to sell their privatized apartment. If this happens, the effectiveness of conducted trainings will suffer, since during short period of time instead of trained residents we can find new ones who purchased apartments, who did not participate in the trainings and do not receive necessary knowledge about the management and maintenance of the common areas of multi-apartment building.

Proposed Solution: we find that it is important to provide apartments to the refugees with ownership rights, however, we propose to apply restriction of rights for some period of time (there are legal mechanism for this and it was successfully applied in the USAID Earthquake Zone Recovery Program), which  Will restrict the rights of the owners to sell, lease, to donate, to mortgage, or otherwise alienate their apartments for some period of time,  Will bring families closer,  Will give them an opportunity to live in apartments and make them feel attached to apartment, building, and neighbors  Be conscious of their roles in the building management and maintenance.

4. Assumption: conduction of orientation meetings and trainings and participation of families on the list in those trainings was defined as an important pre-condition for the future residents/owners of the newly constructed building. The aim was to ensure that future owners of the building get necessary knowledge about management and maintenance of multi-apartment building common areas before they move to the building.

UFSD expected that interest would be ensured to the trainings and residents would participate in the meetings and trainings.

Reality: meeting in Goris with refugee families showed that they expressed some interest to participate in the meetings/trainings, however there was not impression that all of them found those meetings/trainings and necessity to obtain additional knowledge important.

Risk: Now, when the final list of residents are approved, UFSD has concern that the process of arranging meetings/trainings may fail, since future residents/owners of the building knowing about the decision of their selection as a beneficiary of the building, will not find important attending the trainings and obtaining knowledge considering those not essential, and UFSD does not have any leverage to ensure their participation. The project implementation period is short and it is not possible to make more efforts in working with each family individually.

Proposed solution: it is necessary that all stakeholders dealing with the residents/owners of the newly constructed buildings (UNHCR, Migration Agency, Syunik Marzpetaran and Goris Municipality) demonstrate unified approach and in turn draw the attention of all to the circumstance that meetings and trainings by UFSD are necessary and important prerequisite, and ensure that all refugee families on the list participate in the meetings and trainings, allow UFSD to present this approach on behalf of stakeholders in the course of arranging meetings/trainings.

19

5. Assumption: it was assumed that in Goris there were not conflict of interest between eligible and ineligible refugee families living hotels, hostels and other collective residencies.

Reality: during the visit to Goris it was figured out that for instance in Goris Hotel there were ineligible families (based on the list we had) who probably knew about their ineligibility and wanted to find out reasons for that. UFSD did not know eligibility criteria moreover UFSD was not in a position to clarify on such questions.

Risk: UFSD will inevitably face those families while inviting their neighbors to the meetings. Those families also would like to participate in the trainings. Leaving their questions without answer may cause risk to the all training process and favorable environment created around it.

Proposed solution: inform UFSD about eligibility criteria to explain ineligible families the reasons why they cannot participate in the meetings as well as provide information about their future housing opportunities. For this purpose UFSD will arrange separate office hours for ineligible families.

20

Swiss Agency for Development and Cooperation

The Urban Foundation For Sustainable Development Annex

Effective Management and Maintenance of the Residential Building for 40 Refugees to be Built in Goris Funding Organization: SDC Implementer: UFSD Legal Questions to be Clarified 1. Address of the buildings, land allocation decision for construction including square of the land under the building, sizes (square) of the land necessary for building maintenance, other areas: yard area, playground, etc.

2. Description of building’s common use areas 3. Construction permit 4. Building/construction design approved based on legislation 5. A document certifying completion of construction 6. Name of construction organization 7. Name of construction organization 8. Information about the person carrying out author’s verification 9. Information about person carrying out technical inspection 10. Name of the subject of registration of ownership rights to the building 11. Availability of documents which are the basis for registration of ownership rights.

12. Will the ownership be registered to the all building or to each apartment unit separately?

13. List of residents signed and sealed by a relevant authority.

14. List of documents which are basis for registration property rights to the apartments allocated to refugees.

15. Are apartments provided to refugees with common ownership rights or other rights will be registered to the apartment (e.g.: lease or free use) 16. If in the beginning the ownership right is registered in the name of community, who will pay registration expenses.

17. Is there any sample ownership contract or a contract on transferring other property rights.

21

Annex 4

Swiss Agency for Development and Cooperation

The Urban Foundation For Sustainable Development

MINUTES #1

Yerevan

August 10, 2006

Of the Stakeholders Meeting held within the framework of the “Effective Management of Residential Building for 40 Refugees in Goris” Project

PARTICIPANTS ERNESTO MOROZIN

Swiss Agency for Development and Cooperation (SDC), Deputy Regional Director for the South Caucasus

MARINA SHAHBAZYAN

UNHCR, Field Assistant

ARA HARUTYUNYAN

RoA Ministry of Territorial Administration, Migration Agency, Head of Department of Refugees Issues

ARA DOLUNTS

Syunik Regional Government, Deputy of Governor

IRINA VANYAN

The Urban Foundation for Sustainable Development (UFSD), Executive Director

ARMEN VAROSYAN

The Urban Foundation for Sustainable Development, Project Manager

HAYASTAN STEPANYAN

The Urban Foundation for Sustainable Development, Senior Legal Expert

SAMVEL NAZARYAN

The Urban Foundation for Sustainable Development, Program Assistant

22

AGENDA 1. Presentation of issues arisen during the preparation phase of the Project and proposed recommendations (presented by A. Varosyan) 2. Stakeholders’ Presentations 3. Presentation of the legal issues rose in the project (presented by H. Stepanyan) 4. Exchange of ideas and recommendations discussion 5. Summarizing the meeting and conclusion (A. Varosyan, I.Vanyan)

23

1. Presentation of issues arisen during the preparation phase of the Project and proposed recommendations (presented by A. Varosyan) Armen Varosyan briefly presented the Urban Foundation and the areas of the organization’s activities. Then he presented the objectives of the project “Effective Management of Residential Building for 40 Refugees in Goris” funded by SDC and being implemented by the Urban Foundation, also the issues arisen during the preparatory phase of the project was presented. A. Varosyan mentioned the adopting the common and unified approach to these issues promote the effective implementation and completion for the project.

The following findings were presented:  Absence of organized community of refugee families  Absence of final approved list of 40 refugee families  Concern about the sale of newly allocated apartments foreseen to be privatized  Concern about the high rate of participation of refugee families in the trainings  Difficulties responding to the questions of ineligible refugee families related to reasons of their non-participation in the project.

A. Varosyan presented possible risks and proposed the approaches of the Urban Foundation to the solution of those issues.

2. Stakeholders’ Presentations Speaking of the Beneficiaries List, Ara Harutyunyan of the Migration Agency told that only UNHCR signature was left and after that the List can be considered as a final and approved.

After it will be provided to the parties. A. Harutyunian clarified on the eligibility criteria for the selected beneficiaries for the building. As for housing privatization, A. Harutyunian mentioned that the legislation required resolving privatization issue within 1 year. He also asked to present topics of the trainings with refugees.

Ara Dolunts, Deputy Governor of Syunik Regional Government presented the work had been done since 2004 in Syunik with regard to sheltering of refugees. He mentioned 3 types of shelter projects for refugees in Syunik: Housing Certificates, new construction for 40 households and Social Housing Model.

Speaking of sale restriction on privatized apartments, A. Dolunts mentioned that he did not have any information about the intention of selling the apartments to be provided for refugees. He told that the fact that refugee families had to vacate and hand over their temporary shelters would impede them from selling their apartments. However, he did not exclude such risk and agreed with the recommendation of applying sale restriction.

Speaking of condominiums, A. Dolunts mentioned that there are difficulties for sustaing condominiums in Sunik and the solution he saw was partial subsidizing of those associations by other organizations. He welcomed the idea of assistance in establishing a Condominium in newly constructed building and mentioned that selected families are socially vulnerable and insolvent.

Marina Shahbazyan, Field Assistant of UNHCR agreed that there was not organized community through the Goris refugees, however, she mentioned that based on her experience

24

with refugees, the community was formed when they move to the building. She told that in many buildings refugees took care of the maintenance of their building.

Speaking of the List of beneficiaries, M. Shabazyan told that the list would be signed by UNHCR soon and would be provided for the Urban Foundation.

3. Presentation of the legal issues rose in the project (presented by H. Stepanyan) Hayastan Stepanyan, Senior Legal Expert of the Urban Foundation raised the following legal question clarifications on which were considered important for the successful implementation of the project: 18. Address of the buildings, land allocation decision for construction including square of the land under the building, sizes (square) of the land necessary for building maintenance, other areas: yard area, playground, etc.

19. Description of building’s common use areas 20. Construction permit 21. Building/construction design approved based on legislation 22. A document certifying completion of construction 23. Name of construction organization 24. Name of construction organization 25. Information about the person carrying out author’s verification 26. Information about person carrying out technical inspection 27. Name of the subject of registration of ownership rights to the building 28. Availability of documents which are the basis for registration of ownership rights.

29. Will the ownership be registered to the all building or to each apartment unit separately?

30. List of residents signed and sealed by a relevant authority.

31. List of documents which are basis for registration property rights to the apartments allocated to refugees.

32. Are apartments provided to refugees with common ownership rights or other rights will be registered to the apartment (e.g.: lease or free use) 33. If in the beginning the ownership right is registered in the name of community, who will pay registration expenses.

34. Is there any sample ownership contract or a contract on transferring other property rights.

H. Stepanyan found these issues important since the special training should be conducted with selected initiative group and a package of documents should be submitted to them so that they would be able in future to apply to the right addressee with regard to the problems arisen and make literate decisions.

4. Exchange of ideas and recommendations discussion There were some clarifications on some issues: for instance, there are documents regarding the building/ construction, construction permission.

Answers to some questions were not clear yet: for instance, who should belong the building after putting it into operation: Goris City, or Syunik Regional Government? Should it immediately be alienated to the refugees?

A. Dolunts also was concerned about the uncertainty of those issues.

The answers to those questions were decided to find during further working meetings among parties.

25

5. Summarizing the meeting and conclusion (A. Varosyan, I.Vanyan) Irina Vanyan of the Urban Foundation summarized shortly all difficulties that have risen in the first stage of the Project. She emphasized that the appeared problems cannot be completely solved because the short duration of the project. Especially she mentioned that the period allocated for the project is not enough to integrate 40 beneficiaries that are currently dispersed territorially or to make some legal changes in the acting low. This should be considered as a main obstacle for achieving serious results and having big expectations during the organization of the further management of the building.

Ernesto Morosin (SDC) mentioned that he was not waiting for such difficulties in that stage of the project; moreover this confirm that the project touch a very sensitive topic in this integration process and it also is attesting the excellent work performed by UFSD in this initial phase.

He added that, as far as he knows, all houses and apartments built by UNHCR Armenia have been privatized without considering the “Condominium Management and Maintenance’ component.

In that sense, UNHCR Shelter project in Goris is the best and last opportunity (Syunik Regional Government is partner in the project, and shows great interest and cooperation).

According to SDC experiences, “Condominium Management and Maintenance’ should be taken into consideration in all construction projects where the integration or re-integration of displaced/refugees are considered (Durable Solution).

The main goal of the project is to contribute/ensure an effective sustainability of the new shelters provided to beneficiaries. The project sustainability, besides being a donor objective, will benefit to the beneficiaries households and to the local community as first.

E. Morosin would like all raised questions to be solved before residents would enter their new apartments.

Having agreed with above mentioned, the participants found it important the implementation of the project hoping that it would be sustainable and would be part of other project.

By the end of the meeting A.Varosyan summarized all of suggestions and thanked presented stakeholders to take part in the meeting.

Decisions: 1. Trainings have to be held for refugee families included in the List approved in 2006 by the Migration Agency of the Ministry for Territorial Management of RoA and UNHCR and officially submitted to the Urban Foundation.

2. All questions by ineligible households should be directed to the Migration Agency.

3. Viewpoint connected with sale restriction application to the privatized apartments should be discussed further during working meetings.

26

Signature of Parties: ERNESTO MOROZIN Swiss Agency for Development and Cooperation

______________________

MARINA SHAHBAZYAN UNHCR

______________________

ARA HARUTYUNYAN Migration Agency, RoA Ministry for Territorial Administration

_______________________

ARA DOLUNTS Syunik Regional Government

_______________________

IRINA VANYAN The Urban Foundation for Sustainable Development

_______________________