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Value for money
A new provision on apartment service charges will hopefully provide more clarity in building management and operation
Apartment blocks have sprung up all over Hanoi in recent years and provided much needed supply for the growing demand for housing in the city. But many apartment owners have been in dispute with investors over accompanying monthly service charges. A recent decision from the Hanoi People’s Committee detailing specific service charges is therefore seen as a positive step forward in the management and operation of apartment blocks.
Monthly service charges are to be set at VND2,400 ($0.12) per square metre for apartment blocks without elevators, while those with elevators are subject to a monthly charge VND3,100 - VND4,000 ($0.15-$0.20) per square metre.
Such “services” include the cleaning of public space, managing and operating technical facilities, and providing security, among others. Owners and investors can also come to their own agreement over service charges.
According to Mr Nguyen Thanh Hung, General Manager of HMS Property, the new provisions will affect investors, managers and residents in different ways. High-end apartments like The Manor and Golden Westlake already have their own agreements so no major change is expected. “But in the future residents could use the regulated charges as the benchmark in negotiations with investors and managers,” he said. At Keangnam Tower, which is yet to open, service providers will have to adjust their service charges because they are yet to come to an agreement with any residents.
In Hanoi there are many apartments with service charges higher than those stated in the new provision. At Golden Westlake they stand at $0.80 per square metre, $0.70 at the Vincom B Building, $0.45 at The Manor and $0.40 at the Sky City Building. As investors note, these buildings provide high quality services that are commensurate with the amount of money being charged.
At other apartment blocks, especially those built as resettlement areas, investors charge residents a reasonable service charge but this tends to be uniform and not dependent upon the size of the apartment. “Under the new provision, residents at some low-income apartments will be subject to a higher charge in the future than they are now,” Mr Hung said. “It won’t be easy at all for them to find $15 or $20 every month.”
According to one experienced building manager, the most important part of managing and operating an apartment block is financial transparency from the outset. “Conflicts and disputes are inevitable,” he said. “It is necessary for building investors and managers to keep records on the services they provide so that residents know their rights and obligations.”
Mr Nguyen Manh Ha, General Director of the Department of Housing Management and Real Estate Market (DoHRM) at the Ministry of Construction (MoC), told local media that the provision was issued to control the recent situation where investors were indiscriminately increasing their service charges.
He recommended that people purchasing apartments carefully consider the provisions in the purchasing contract. “Service charges could be low in one building but extremely high in another, so purchasers should look at these provisions before signing a contract,” he said. “The State cannot intervene in the provisions of a contract but there must be respect for any agreement between investors and residents.”
The Hanoi Department of Construction has recently issued a written request for investors and managers of apartment blocks throughout the city to review their service charges. Investors must notify the department of all charges and seek the opinions of residents. In addition, district people’s committees must actively resolve disputes between investors and residents relating to service charges.
There are some people, however, who are concerned that investors will simply begin to provide lower quality services or implement other “charges” to escape the regulation. Investors, managers and residents must therefore find agreement over the level of services provided.
Hoang Thu
vneconomy
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