Shortcomings of condominium: special case of Ukraine and general inference about prospective property model

The paper presents the conclusions from the authors' search of the problems of multi-apartment building maintenance carried out by inefficient owners in Ukraine and other post-socialist countries after privatization.In the introduction the authors presented a comprehensive historical analysis of the housing sector of Ukraine and identified housing stock degradation trends. Than they analyzed experts' visions of the ways of further housing provision of citizens focusing on the property relations. Especial attention was drawn to the necessity of harmonizing the housing policy with the model of the welfare state which must be clearly defined taking into account the unity of two components in the concept of housing: the vital needs of a person, on the one hand, and the value of real estate as assets of the owner, on the other hand.The author’s methodology of the housing value and cost analysis used several modern economic concepts: imputed rent, life cycle costing, and sustainability. The subject of research was deepened by applying theoretical provisions about legal and economic ownership in relation to residential real estate, in particular, objects of joint ownership. The models of joint ownership of housing in different countries were classified in detail, and the specifics and shortcomings of the formation of the Ukrainian condominium model were clearly shown against this background.Then, multidirectional factors in housing ownership model were theoretically discovered. It was shown, on the one hand, the economic feasibility of joint home ownership, and, on the other hand, the complication of the management system when splitting: a single real estate object into a land plot, buildings, structures and apartments; a single owner into numerous co-owners of common property; a bungle of property rights into individual rights of subjects regarding various objects of residential real estate. In this way, the inevitability of problems in condominiums was theoretically justified.As a practical illustration of attempts to solve these problems, on the examples of different countries, the varieties of the classic dualistic condominium model were shown. Particular attention was paid to the uncertainty of physical objects of individual ownership and their value, which creates numerous problematic situations in management. It was shown that the high and unclearly defined cost of maintaining real estate in a condominium leads to the need for significant indirect state participation in the maintenance of private housing in apartment buildings, which contradicts to the principles of market economy.The inferences were made that, in contrast to the dualistic model of the condominium, the most developed countries returned to the concept of a single real estate object in the form of a unitary model admitting the economic nature of the processes of housing maintenance and operation. Thus, the conclusion about the optimal organizational form of joint home ownership - a housing company – was made.In the specific conditions of Ukraine (poor condition of buildings, insolvency of residents, mass destructions caused by the war, absence of convenient investment mechanism for restoration), the necessity of transforming the real property of inefficient owners in condominiums into corporate rights in a housing company with the possibility of attracting external investors to finance the renovation was substantiated. For this purpose, the principles of state regulation and statutory self-management of housing companies, which will be created based on the best practices of the latest corporate management, were proposed. As a generalization of the advantages of housing companies as a form of ownership and management of real property, the prospects for the use of digital technologies and tokenization in property partial transactions and in the management of housing stock were shown.