Developers to seek legal help

Urban developments suffer from lack of estate management rules

“The government should issue a decree regarding the development of new urban compounds,” said Nguyen Duc Hung, deputy general director of the Housing and Urban Development Corporation (HUD) under the Ministry of Construction.
This kind of legislation is urgently needed, as the construction of new urban areas, particularly high-rises, is booming across the country, he added.
Foreign property consultants said local developers were encountering many problems in estate management, such as setting and collecting the monthly management fees and ongoing building maintenance of the lifts and other facilities.
To date, no detailed legal framework on the management of housing complexes has been issued, with the exception of a rule devised last year by the Hanoi People’s Committee.
In addition, there are no special agencies to manage and provide services for 24 residential quarters in Hanoi.
Electricity, water supply, sewage, rubbish collection and environmental cleaning are all covered by different agencies, causing many complaints among residents.
Residents are also creating other problems by poorly repairing and renovating apartments and installing their own water tanks, steel cages and water pipes.
This affects the overall architectural design and often causes property devaluation, safety hazards, and legal disputes with neighbours.
Hung said a new decree should provide the detailed obligations of state management agencies, developers and residents and should list the financial mechanisms, such as maintenance fees, for estate management companies.
In the long-term, he added, the decree should act as a roadmap for the Housing Law to guide housing management services after construction is completed.
Hung said in new housing projects, designers are not required to collaborate with management or service providers to determine any irrationalities in building design that could cause difficulties for the management or the occupants.
He added that no administrative agencies have been established to manage new housing complexes, although many projects have been open for years.
Streets inside the new complexes have not been named, and the processes for granting land use and ownership rights remain slow.
In 2001, HUD set up its own management arm, HUDS, which manages 45 high-rise blocks, 254 kiosks and nine supermarkets within newly developed housing compounds.
Its property portfolio will soon expand as the company nears completion on several large residential projects in Hanoi, Ho Chi Minh City and Dong Nai.
HUDS director Nguyen Ngoc Cuong said the management of new housing complexes was a challenge, as people were slow to adapt to living in high-rise blocks, and they freely repaired and installed equipment without managers’ consent.
Maintenance costs for the buildings over the next five to 10 years also present a large problem. Cuong said management companies do not know where to find the funds to maintain buildings, which require lift replacements and fresh coats of paint.
He said estate management companies should be able to maintain and repair high-rise blocks with funds sourced from management fees or included in apartment prices.