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Apartment maintenance funds up for debate

Released at: 22:30, 17/10/2015

Apartment maintenance funds up for debate

Issue discussed at seminar on draft Moc regulation on apartment block management.

by Thu Hoang

Apartment maintenance fees were among the hot issues discussed at a seminar on draft regulations on apartment block management, which were released for comment on July 17 by the Ministry of Construction (MoC), organized by the Vietnam Building Management and Maintenance Association (VBMA) and the Housing and Real Estate Market Management Agency (HREMMA) under the MoC on October 16.

According to Mr. Nguyen Nhu Vinh, General Director of the real estate company Hoang Thanh, many apartment management boards are still unclear on how to effectively use funds raised from maintenance fees, which are equal to 2 per cent of value of the apartment’s sale price.

“If management boards knew how to use the fees effectively they could last 40 or even 50 years,” Mr. Vinh said. At many apartment blocks, however, the funds run out in ten years. “It is necessary to advise management boards on how to effectively use the funds,” he added.

To ensure effective use, holders of the fund account in banks should include one member who is a representative of the building developer and two others who are representatives of the apartment management board, according to Mr. Nguyen Quoc Hiep, Chairman and CEO of the Global Petrol Investment Joint Stock Company (GP Invest). “This can reduce risks and conflicts in case representatives of management boards sell their apartments and no longer live there,” he added.

Developers and representatives from apartment management boards at the seminar also raised concerns over some management boards using the maintenance funds for the wrong purposes. At some apartment blocks the funds total significant amounts, in the hundreds of thousands of dollars.

According to Mr. Nguyen Manh Khoi, Deputy Head of HREMMA, to guarantee funds are used for the right purpose the draft regulation strictly regulates how they are spent. It also states that management boards must complete certain documents before withdrawing funds from banks and has limits on how much can be withdrawn for maintenance tasks and how much can be paid by bank transfer.

The holders of the bank accounts are representatives of apartment management boards, the number of whom is discussed and decided upon at management meetings. “Holders of the fund account are allowed to withdraw money when 100 per cent of members approve,” Mr. Khoi said.

According to VBMA, a similar seminar for further discussion on the draft regulation is expected to be held at the end of November.

  • TAGS
  • Condo maintenance fee
  • Vietnam
  • Vietnam Building Management and Maintenance Association (VBMA)
  • Housing and Real Estate Market Management Agency

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