Prime Minister directs tough action against "hugging" apartment maintenance funds

The Prime Minister has just issued a directive assigning the Ministry of Public Security to coordinate with relevant agencies to organize investigations, prosecute, and prosecute entities that illegally appropriate and use maintenance funds for common property of apartment buildings.

According to the directive, the management and use of apartment buildings in recent times have had disputes and complaints related to the organization of apartment building conferences, the establishment and decision to recognize the apartment building management board. In particular, the management and use of maintenance funds (2% of the apartment value) for common ownership and operational management funds are still in dispute, affecting the security and order situation of the locality and creating negative public opinion.

In a recent report sent to the Government by the Ministry of Construction, there are 8 basic types of apartment disputes, of which up to 36% of disputes are related to maintenance fees.

"Holding" hundreds of billions of dong

According to records, cases of residents "accusing" investors of being late in paying the apartment maintenance fund occur frequently in Hanoi. Residents of the Hoa Binh Green City luxury apartment building (Hai Ba Trung district) have repeatedly hung banners demanding that the investor resolve many commitments, including handing over about 40 billion VND in maintenance fees. According to residents, they have moved in for about 4 years now but the investor has not handed over the maintenance fund as prescribed.

Residents of Hoa Binh Green City apartment building hung banners demanding the investor hand over the maintenance fund.

A similar situation also occurred at Star City apartment building (Thanh Xuan district) which was put into use in 2014, but up to now, the maintenance fund that the investor handed over to residents is only about 2.4 billion VND out of a total of more than 30 billion VND.

When buying an apartment, customers must pay a building maintenance fund of 2% of the total value of the apartment. Each project, depending on the price, will have a different maintenance fund, ranging from tens to hundreds of billions of VND. Mr. Nguyen Van Dinh (a resident of an apartment building in Mo Lao ward, Ha Dong district) said that the investor intentionally delayed the handover because the maintenance fund amount is not small, and generates a lot of interest when deposited in the bank. Meanwhile, sanctions for late handover are not strong enough to deter and penalties are very rare.

Residents suffer the consequences

The delay in handing over the maintenance fund by the investor has caused many consequences when the items in the building are degraded but there is no funding for repairs. This situation occurred at building 17T1 CT2 Trung Van apartment building (Nam Tu Liem district, Hanoi) when the 17 billion VND maintenance fund has been "held" by the investor for many years. Residents of the building have repeatedly sent petitions to the investor and authorities but have all fallen into silence.

Similar situations also occur in many apartment buildings in Ho Chi Minh City. Residents of the 4S Riverside Thu Duc apartment building filed a lawsuit against the investor, Thanh Truong Loc Company, at the District 3 People's Court for repeatedly delaying the handover of maintenance money.

"After only a few years of living in a luxury apartment, it has now become an old apartment. The walls are cracked, the paint is peeling, the swimming pool is damaged, the glass doors are broken... Even though the maintenance fee is up to 3.1 billion VND, we cannot hold the money in our hands. Even though the authorities have issued a notice asking the investor to return this money, they still ignore it" - Ms. Tran Thanh Trang, a resident of this apartment, was upset.

Meanwhile, 23 billion VND of maintenance fees for Phu Thanh apartment building (Tan Phu district) has been misappropriated by the investor for many years. Residents have had to submit petitions everywhere in the hope of having money to upgrade the elevator and paint, but have not received any results.

Recently, although the Ho Chi Minh City Department of Construction concluded the violations at Khang Gia Tan Hung apartment building (Tan Phu district) and requested the investor to return the maintenance fee that has been misappropriated for the past 4 years. However, this unit is still procrastinating, making the residents restless, forcing them to file a petition to the police to protect their rights.

A leader of the Ho Chi Minh City Department of Construction said that many investors use tricks to prolong the organization of apartment building conferences to elect management boards so that there is no unit to receive maintenance fees. Recently, Hoang Nguyen Construction and Housing Development Investment Joint Stock Company was administratively fined 125 million VND for not handing over maintenance fees to residents of the New Saigon apartment building.

"Imagine a 1,000-household apartment building, the maintenance fee can be up to several billion VND or even tens of billions of VND. Just delaying handover, investing money or depositing it in the bank to generate interest can be a huge profit. Therefore, in the coming time, the unit will coordinate with districts to conduct a general inspection of the usage process and the unit managing the apartment building maintenance fee" - this leader said.