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KZK or OSI: old problems in a new format?

Submitted by Вера Александрова on

Problems in organising and maintaining order in residential associations remain acute in Kazakhstan, despite years of attempts to reform the housing and communal services system (HCS). 

A clear example of such problems is the situation in the consumer cooperative (CC) «Nurly», whose residents have again contacted the editorial office of FBIK with complaints about the activities of the cooperative's chairperson, Karakoz Karipova, about whom the residents have many questions. 

As a reminder, last year the FBIK editorial team actively covered the problem in CC «Nurly», where the akimat of Tselinograd district illegally leased out land plots belonging to more than 200 owners

Shortly after our publications the district authorities began working on restoring the owners' rights.

We learned about Ms Karipova's activities earlier, during the preparation of previous publications about the illegal leasing of plots.

Plot owners in CC «Nurly» mentioned that the current chairperson of the cooperative might have known about the violations related to the plots, but did not bring this information to the attention of the others. 

There is also an interesting situation in the cooperative regarding money collections. According to our sources, in 2023 each plot owner paid 30,000 tenge as membership fees, and the entrance fee, including payments for infrastructure, was 300 MCI, which today amounts to approximately 1.2 million tenge.

When a cooperative member sold a plot, the new owner was not obliged to pay the entrance fee again, because, as residents informed us, according to the CC's charter, it is a one-time payment. 

However, according to our sources, the cooperative's chairperson, Ms Karipova, demanded repeat payment from new owners and even used threats if they refused.

Today, judging by the numerous complaints coming into our anonymous bot, the situation has hardly changed.

Residents of CC «Nurly» note that despite regular utility payments and annual membership fees, many homeowners face problems related to lack of electricity and utility services

People are asking: where is their money going? And, more importantly, why is the lack of utility services, including power cuts, being used as a tool of pressure and manipulation? 

The chairperson of CC «Nurly», Karakoz Karipova, has held this position for 9 years. The election of a chairperson in a consumer cooperative usually takes place through voting, so her re-election to this position should indicate the trust of the cooperative's members in her management skills and work results.

Local residents express a different view on Ms Karipova's long tenure. According to them, the re-election of the chairperson is carried out using "sham commissions", and homeowners' appeals to the akimat, it is claimed, do not lead to the desired results.

In October last year, residents of CC «Nurly» submitted a collective application to the Supreme Court, expressing dissatisfaction with the work of the judicial system and suggesting connections between judges of Akmola region and the cooperative's chairperson. The Supreme Court, citing procedural rules, explained that such cases are subject to gradual consideration in lower courts.

It should be noted that, in accordance with the Law of the Republic of Kazakhstan "On Consumer Cooperatives", the forced removal of a chairperson can be initiated in two main ways:

1. By an extraordinary meeting of the cooperative, if a majority of those present vote for it. Such a meeting may be initiated at the request of at least 10% of the cooperative's members, the audit commission, or by decision of the board.

2. Through a court claim if there is evidence of a violation of the legislation or charter, or if the chairperson exceeds their authority. 

In both cases, the grounds for removing the chairperson must be documented.

It is obvious that the presence of complaints about unlawful actions in the management of a consumer cooperative indicates the existence of deeper and more systemic problems in the organisation and regulation of such structures.

A consumer cooperative performs functions similar to a Condominium Owners' Association (COA), servicing several houses. 

As is known, in 2010, as part of the HCS reform in Kazakhstan, the state began implementing new management mechanisms for apartment buildings, such as the creation of Property Owners' Associations (POAs) to replace old cooperatives. 

The aim was to improve the efficiency of residential building maintenance and the quality of provided utility services.

However, the reform cannot yet be called successful. In 2023, Kassym-Jomart Tokayev stated that the POA reform is not producing the expected results

The case of CC «Nurly» clearly demonstrates that problems in managing residential associations do not disappear simply by changing the organisational form. While the POA reform faces difficulties, the old system of COAs and consumer cooperatives continues to exist with all its flaws – financial opacity, abuse of power, and a lack of genuine accountability to residents. 

Insufficient attention from local authorities in such situations can create a vicious circle of lawlessness, where owners are left alone to face the often-unchecked actions of management. In this situation, the question is no longer which form of management is better – POA or COA – but rather about creating effective mechanisms to protect the rights of owners and ensuring real oversight of the activities of managing organisations, regardless of their form.