Residential Community in Lithuania
The Apartment Building Owners’ Association (hereinafter: DNSB) — according to Article 3 of the Law of the Republic of Lithuania on DNSB — is a non-profit organization that implements the common rights, obligations, and interests of apartment owners in a building, related to the management, use, maintenance, and upkeep of the building’s common-use areas and the land plot assigned to it in accordance with legal procedures in Lithuania.
To put it simply, a DNSB is a legal entity — a standard organization permitted by the laws of Lithuania to carry out certain activities. After the new Civil Code came into force on July 1, 2001, Article 4.84 obligated municipalities to appoint administrators for the common-use areas of apartment buildings. However, such action contradicts the principles of competition and consumer protection, as it denies apartment owners the freedom to decide. Hence, a need arose for an alternative to municipally appointed administrators. Establishing a DNSB allows for smoother administration and maintenance, increases resident engagement and mutual trust.
A financing model has been developed for DNSBs participating in municipal programs. This encourages the formation of associations and invites residents in Lithuania to become more involved in the management and maintenance of their property, and to more easily access support from municipalities or the state for building renovations. The “owners” of these “companies” are the apartment owners themselves, who care deeply about how their association performs in a free-market environment. Many economists say that money saved is equivalent to money earned — so it’s essential for the association’s chairperson to have business management basics (finance, taxes, negotiation skills) and to maximize benefits for members. With a skilled negotiator and organizer, experts believe utility costs can be cut by up to 50%.
Self-Governance in DNSB Operations in Lithuania
DNSBs can hire their own employees or outsource to other companies (for maintenance, bookkeeping), but when the association chooses its own service provider, no certificate is required. Certification is only needed if the administrator is appointed by the municipality, which creates monopolistic conditions and imposes the highest possible rates. It’s worth noting that for small buildings, it’s practical to manage common property through a joint activity agreement, which must be registered in the public register. This also grants the right to apply for state support.
Currently, legal experts receive numerous resident requests for information. One of the main concerns is chairpersons acting unilaterally and disregarding the community’s decisions. A frequently asked question is: “Where can we turn if the chairman is proceeding with renovation, which we don’t agree with, and has already chosen contractors? He collected signatures a year ago, when life conditions were better. Now, many residents have changed their minds, but he refuses to listen. What should we do?”
If the chairperson does not carry out the community’s will, you can simply elect a new one — resignation is not required. Convene a meeting with at least 51% resident participation, elect a new chairperson, and register them at the Registry Center. The former chairperson will have no legal power and cannot proceed with renovation. Additional requirements: an announcement about the meeting must be posted 2 weeks in advance, signed by 1/4 of residents, and after the meeting, minutes must be written. Otherwise, the Registry Center will not register the new chairperson. Remember — members can convene a meeting only if the board fails to do so within a month. In other situations, member signatures have no legal force. The law is clear on this (Article 21 of the DNSB Law).
Many residents complain about increased administration fees and unclear use of funds collected for technical maintenance. By forming a DNSB or signing a joint activity agreement, you will know exactly where your money goes. However, if you are satisfied with a municipal administrator, remember the call from the Special Investigation Service (STT): residents of buildings in Lithuania planned for renovation must take active and responsible part in selecting authorized individuals and companies for renovation. Afterwards, residents must monitor prices and quality of work. Only active residents can prevent corruption and ensure transparent competition influences prices. Most importantly, whether under a municipal administrator or a DNSB, all representatives must serve the interests of residents, not narrow profit-driven groups.