Slick action required by developers

Developers and residents must follow regulations carefully

Ngo Quang Phuc, general director of Phu Dong Real Estate JSC, said that conflicts at high-rise apartment buildings mostly come from very small disputes. However, these small spats can escalate immensely and bring about negative consequences for both developers and buyers.

One of the most efficient solutions was to set up a special team of technicians to support residents 24/7. “All problems must be resolved as soon as possible in order to avoid escalating conflicts between developers and buyers,” he said.

Meanwhile at the Him Lam An Phu building located in District 9 of Ho Chi Minh City, developer Him Lam Land has managed to address resident demands before a dispute could arise.

According to Le Thi Bich Ngoc, deputy general director of Him Lam Land, complaints were made because the nearby paper mill was polluting some units at the building.

In order to avoid any dispute, Him Lam Land has decided to buy out the units impacted by pollution, or move residents to other units until the paper mill is removed from the vicinity.

Main factors involved

According to the Ministry of Construction (MoC), conflicts also come up between the building’s developers and their management boards, or developers and apartment residents, as well as disagreements related to land recovery and compensation for land clearance, and building quality.

According to the laws, residents – before receiving their apartments – have to shell out 2 per cent of the apartment’s value as maintenance fee, with the fund under the temporary management of the apartment building’s developer. When the building’s management board is established via a vote by the residents, the developer has to hand over the fund to this board. However, the MoC stated that at many projects, residents have claimed that the developers misappropriated this fund to use for other purposes.

Other reasons for disputes include a number of unclear guidelines in the regulations on management and the use of buildings, such as the ­calculation of the apartment area, balcony area, the technical box, and common and private areas.

Some unqualified developers deliberately violated regulations on construction investment, housing, real estate business, and fire prevention.

In addition, apartment ­buyers did not carefully ­consider all terms in the signed contracts, particularly the terms related to the rights and ­obligations of the parties ­involved in the management and use of the house.

Setting up legal frameworks

According to Vu Ngoc Huong, general director of Venus Corporation, a company ­providing management and ­operation services in high-rise apartment buildings, the MoC issued Circular No.14/2008/TT-BXD on the standards of high-rise apartments more than ten years ago. However, Huong claimed that this circular remains general, which leads to ­confusion amongst both developers and buyers.

“This is one of the ­outstanding issues in high-rise apartment buildings which Venus Corporation is trying to ­improve right from its first days in operation,” Huong said. “When negotiating with buyers, we have clearly defined all of the services, obligations, and rights of developers and buyers.”

She added that this ­regulation is also a foundation for all related sides, including ­residents, developers, management units, and local competent authorities to observe and ­assessing the exact level of services.

The Ho Chi Minh City Real Estate Association has just sent a document to the MoC, ­suggesting to let developers or professional management units manage high-rise apartment projects, instead of a ­management board elected by residents.

According to a recent report by the MoC, 215 apartment building projects in 43 cities and provinces are ­currently embroiled in such ­disputes, with 108 of them ­occurring between developers and residents and the remaining having to do with land ­reclamation, land clearance, and other civil matters.