HCM City grapples with high-rise construction boom

A high-rise boom in ever-growing HCM City is posing new management challenges for authorities, a construction official reported on Monday. - Photo thoibaotaichinhvietnam.vn

Speaking at a nine-month review meeting on the southern city’s socio-economic development, the municipal Department of Construction Director Tran Trong Tuan said that approximately eight to 10 per cent of apartment buildings in the city were witnessing major conflicts between either the building’s investor and its management board or the investor and the apartment residents.

Tuan said the disputes usually arise over the use of the apartment management fund, which makes up part of the sum apartment buyers pay to investors for their future home.

The investors often receive the apartment management/maintenance fee as part of the total sale price of an apartment are supposed to transfer the money to the building’s management board, but often investors do not transfer the fee in a timely manner, leading to the conflicts.

The amount of the fund varies in each building.

“The management cost could be between five and seven million dong (US$220 to 310) in some buildings. But there were also some having extremely large funds, about a few dozens of billion dong, or even up to VND70 billion,” Tuan said.

The two new developing districts of Tan Phu and Tan Binh accounted for a remarkable number of such conflicts, he added.

“Some conflicts happen at apartments still under construction or even at projects yet to be built,” Tuan said.

While the State management role is quite limited according to the law, the investors were granted considerable leeway to oversee their projects, which left the authorities little room to handle the issue.

The construction department had to set up a specific force to handle such conflicts, Tuan said, and was planning to open training workshops for members of any apartment management board in the city to better prepare themselves for the matter.

Construction violations

Breaches of construction regulations are extremely common among high-rise projects in HCM City, Tuan said at the review meeting, noting that up to 10 per cent of high-rises were found to have broken the law.

The rate in individual housing was much lower, at two to three per cent.

“It is like a ticking bomb with authorities unable to know when it will blow up,” he said.

According to the latest report of the HCM City People’s Committee, 51,557 construction projects were inspected over the first three quarters of this year. Within those projects, 1,695 violations in construction were found, an increase of 24 per cent compared to the same period last year.

There were some 830 cases where builders had failed to obtain a construction licence, while 557 had licences but completed projects not in accordance with the terms of their licence. The breaches were up by 35.6 and 15.1 per cent, respectively, over last year’s.