BACKGROUND

This is just one case that may be not so noticeable to the public but it initiates a very important process. But all in good time.

HOA "Stryiska 93"

  

A typical post-Soviet unkempt multi-apartment building of white lime bricks in Lviv residential district, constructed in 1987. Nine stories, three entrances, 104 apartments – there are many such buildings in Ukraine.

In June 2010, a Homeowners association (HOA) called “Stryiska 93” was established here. The building soon became part of the “Oberih” Condominium Association consisting of 5 buildings constructed in late 1990s. 

These buildings, even before the HOA was established, were equipped with individual heat substations (IHS), so they had no problems with weather-based control of the heat supply. But they had numerous other problems requiring immediate solutions. 

A typical post-Soviet unkempt multi-apartment building of white lime bricks in Lviv residential district, constructed in 1987. Nine stories, three entrances, 104 apartments – there are many such buildings in Ukraine.

In June 2010, a HOA called “Stryiska 93” was established here. The building soon became part of the “Oberih” Condominium Association consisting of 5 buildings constructed in late 1990s. 

These buildings, even before the HOA was established, were equipped with individual heat substations (IHS), so they had no problems with weather-based control of the heat supply. But they had numerous other problems requiring immediate solutions. 

PROBLEM

During transfer of the building to servicing by the HOA, it was revealed that all the utility systems are worn out and required urgent renovation.

The old sewage pipes in the basement were replaced in 2010 with funds allocated by the municipal budget. But further improvements (replacement of the cold water supply pipes, replacement of electric wiring in the stairwells and installation of motion sensors and energy saving lamps) were made step by step at the co-owners’ expense from the renovation fund. By using this approach, the co-owners managed to arrange a new waste collection site in 2013, and to replace the rainwater disposal system in the building. It was also decided to increase the amount of contributions to the renovation fund in order to implement other projects promoting energy conservation, saving money, and improving the comfort level.

In 2014, the members of Stryiska 93 encountered one more problem. An examination of the heating pipes in the basement showed that without replacement of the pipes, the system would likely break down during the next heating season.  The cost of the repair works and materials was about UAH 100,000. The HOA did not possess the required amount of money and its accumulation would take at least five years.

Realizing the real threat of remaining without heat supply next winter, the HOA board convened a general HOA meeting in April 2014. It was decided to replace the heating pipes in the basement with the renovation fund money, and to take out a UAH 50,000 loan.

NOVELTY

Then HOA Chairman Ms. Stefaniia Klymko addressed the only private bank in Lviv at that time  that had developed and introduced a Program on Lending for Energy Saving Measures in HOAs.  This was made possible by the participation of the bank in the program implemented with support of the USAID Municipal Energy Reform Project in Ukraine. The Project helped the bankers in understanding the legal and financial issues of HOA operations, as well as the technical, financial and organizational-and-legal aspects in implementing energy efficiency measures in multi-apartment buildings.

According to the decision of Bank Lviv Credit Committee, Stryiska 93 received the required amount for 60 months at 25% per annum. The Oberih HOA association has undertaken the obligation to prepare documents for formalizing the credit agreement.

With this, Stryiska 93 has become the first ever HOA in Lviv to receive a loan for implementing energy efficiency measures. Moreover, it was also the first HOA in Ukraine to receive a loan from a commercial bank. And Bank Lviv started the history of loans to HOAs from commercial banks.

RESULTS

Participation in the lending program allowed the HOA not only to replace the heating pipes on time and reduce heat losses by 15%. This helped the co-owners to change their attitude to the mechanism of fund raising, first of all, for implementing a lot bigger projects. The best proof of this is the fact that Stryiska 93 has concluded a credit agreement with the state bank on the State Energy Efficiency Program for the Insulation of Building Envelopes. The loan amount is UAH 1,905,000.

The residents of Stryiska 91 followed the example of their neighbors and in 2015 took out a UAH 234,000 loan for installing energy efficient windows in the stairwells. A year later, they took out a UAH 1 million loan in order to install heat insulation for the building envelope.

The weighted and economically feasible solutions for the co-owners enabled resolution of the most acute problems related to ensuring the proper condition of their property, and proved once again that the establishment of HOAs not only provides for the adoption of responsible decisions, but also promotes the development of local communities, increases social activity, and changes  the mentality of ordinary Ukrainians for whom saying “It is none of my business” is no longer true.

The Lviv city authorities saw the activity of the co-owners who were prepared not only to contribute their own money, but also to take out bank financing, and in March 2015 the City Council deputies approved the “Program of Compensation of Part of Credit Funds Received by HOAs and Housing Cooperatives for Energy Saving Measures, Reconstruction and Modernization of Multi-Apartment Buildings in Lviv for 2015-2018”.

Thus, the joint efforts of the community, authorities, and businesses in Lviv have initiated a promising direction for Ukraine in relation to the revival of multi-apartment buildings.

Andrii Zaharevych, Manager of Lending Program for Energy Saving Projects, PJSC Bank Lviv:

“It was surprising how explicitly the HOA Board convinced the apartment owners in the need for a loan, and this guaranteed the decision of the HOA general meeting, how strictly the  instructions of the Bank analysts regarding the submission of documents and their form were followed. All this impressed the Bank and resulted in the positive decision of the Credit Committee. The borrower complied with the target of lending and carefully fulfills all the obligations, despite the objective difficulties. Many business companies have something to learn from here!”

 

Contact information

Chairman of Condominium Association “Oberih” – Stefaniia Klymko, tel. 0677339263, 0950241063. E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it..

Chairman of HOA “Stryiska 93” – Orest Chupashko, tel. 097 314 4902.

Postal address: 91/28, Stryiska Street, Lviv, 79031.

 

Bank Lviv

Andrii Zaharevych, Manager of Lending Program for Energy Saving Projects, PJSC Bank Lviv, tel. 032 245 64 23.

Postal address: 1, Serbska Street, Lviv, 79008.  

E-mail: http://www.banklviv.com/uk/map/.