HoREA proposes not allowing investors to run condo maintenance funds

The Ministry of Construction had earlier proposed amendments to the Housing Law, saying that the apartment maintenance fund can either be managed by apartment building investors or by professional building operators.

The fund managers will be selected by apartment residents and the fund managers’ performance will be supervised by building management boards.

On June 11, HoREA sent to the ministry its comments on the amendments to the law, objecting to the tentative proposal to give apartment building investors the right to manage the fund, saying it may lead to disputes with homebuyers who pay to create the fund.

According to the association, investors will only be allowed to manage condo maintenance funds if they are capable of managing and operating apartment buildings and are selected to manage the fund by apartment owners, as stated in the Housing Law and the Ministry of Construction’s Circular 02/2016 on the management and use of apartment buildings.

Therefore, it is unnecessary to amend the law to assign condo investors to manage the maintenance funds.

The condo maintenance funds are often large and there have been many disputes between apartment building developers and residents as well as building management boards over the use of apartment maintenance funds. For a medium-scale condo project, the fund may amount to tens of billions of Vietnamese dong, as homebuyers are required to pay a sum 2% of their homes to the fund.

HoREA also suggested using the apartment maintenance funds to maintain shared areas of buildings only, such as walls, floors, roofs, corridors and emergency-exit staircases.

Regarding the proposal that the apartment maintenance funds should be managed by professional building operators, these service providers must prove their ability to effectively manage and operate apartment buildings.

According to the Ministry of Construction, the country is currently home to more than 4,400 apartment buildings, with 10% of them involving disputes, mainly over the management and use of the maintenance funds, investors’ delays in the handover of the funds to building management boards, poor quality of buildings and high service fees.