Vietnam issues stricter regulations on apartment maintenance fund
The new decree forbids the developers from withdrawing money from the account whose ownership would be transferred to the building management board once it is elected.
The Vietnamese Government has taken actions to handle the building investors' misappropriation of maintenance funds and protect the rights and interests of apartment owners.
This protection has been concretized in the Government’s Decree No.30/2021/ND-CP, which has been recently revised and supplemented from the Decree No. 99/2015/ND-CP on detailing articles of the Housing Law.
The new decree is a resolute action to end long-lasting and pressing issues caused by housing developers, who deliberately delay handing over maintenance funds for their customers.
Accordingly, developers of the apartment buildings are still responsible for collecting the fees for the maintenance fund, equivalent to 2% of the value of apartments, from apartment owners and tenants.
Nam Trung Yen Apartment Building in Hanoi is maintained in accordance with the periodic plan. Photo: Hai Linh
The maintenance fund must be deposited at banks and transferred to the building management board, which is elected by residents of the apartment building.
The fact showed that the appetizing interest earned from the bank deposit has led to disputes between management boards and developers. Many investors have used these savings at their will, delay the transfer to the management board of the apartment building.
Therefore, the new decree forbids the developers from withdrawing money from the account whose ownership would be transferred to the building management board once it is elected.
Lawyer Bui Quang Thu from the Hanoi Association of Lawyers told The Hanoi Times that within ten days after receiving the request from the building’s management board if the developer does not hand over the maintenance fund, the management board could propose the local People's Committee take stronger action forcing the developer to obey the law.
“Apartment purchase contracts must clearly state information about the maintenance fund account,” Thu said.
In April, a team of inspectors from the Ministry of Construction conducted an investigation on 15 apartment projects in Hanoi to settle disputes of maintenance funds between local residents and investors.
The Ministry of Construction said these projects have experienced disputes related to maintenance funds, adding that it has enough evidence to penalize the developers.
Delaying to hold apartment owners conference; Delaying to transfer maintenance funds of the apartment building; Misuse of public space in apartment buildings for the private purpose; Delaying or handing over incomplete documents of the apartment building; Not depositing maintenance funds in a bank account or opening an account without notifying the State management agency for supervising.
Thirty-nine apartment buildings in Hanoi have experienced disputes related to the maintenance funds. Photo: Doan Thanh
Some projects have been inspected and whose violations detected, including CapitaLand - Hoang Thanh apartment project (Seasons Avenue) of CapitaLand - Hoang Thanh Investment Limited Company; Riverside Garden apartment project (Vu Tong Phan Street, Thanh Xuan District) invested by Videc Group Joint Stock Company; and a housing project at 90 Nguyen Tuan (Thanh Xuan Trung Ward, Thanh Xuan District).
The inspection team detected a record of administrative violation and issued a fine of VND15 million (US$652.44) to each investor as they have obstructed the election of the apartment buildings' management board and delayed the transfer of the maintenance fund to dwellers in accordance with regulations.
However, Lawyer Bui Quang Thu told The Hanoi Times that the penalties are too lenient to deter violators.
“They appropriate billions of dong from apartment maintenance, but only get fined a few million to tens of millions of Vietnam dong. If the law allows stricter measures such as blocking of their accounts, the story might be different,” Thu said.
He suggested that forceful measures are required to ensure developers hand over the funds to management.
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