Residential Apartments: Weak and Insufficient Management

 

According to the regulations by the Ministry of Construction, the management board of apartment blocks operates under the collective principle, comprising between five and 15 members. The board is the bridge linking households in apartment blocks with block owners. However, just after the fire cat 18-floor JSC building in Hanoi, people can recognise the role of the management board. The management board had been not set up yet for the building; as a result, the owner of JSC was prosecuted for the case.

 

In spite of having decision for the board establishment, not all apartment blocks the management board. Only few have the board among around surveyed 100 ones. Regrettably, despite being set up, the board’s role is very dim. The majority of long lawsuits by apartment households are attributed to the fact that the lack of the board or their weak roles.

 

Many times, people have gathered at the Manor, the most modern building in Hanoi, to oppose unreasonable price levels set by the investor. The investor and the management board have imposed very high price levels without seeking approval from households. Besides monthly water and electricity expenses, the owner of apartments has to pay fees for parking lots at US$10/motorbike/month and US$100/car/month. In addition, they have to bear common services fees at US$0.8/month/m2. Auditing results showed that the investor allowed many companies to lease apartments as offices, and then they divide extra fees among households. The property and housing department said this situation remains popular at current apartment blocks in Vietnam.

 

The most recent case is the opposition of 100 households living Bac Ha apartment block, Ha Dong district, Hanoi for wrong service fees which grow by 200 per cent compared to permitted level. The management board of this block cut water for their daily life for several days after the case.

 

Without the management board, households do not have their representative agency. On the contrary, despite being established, the board will do not show its roles without cooperating with the investor and local authorities.

 

To date, the Housing and Urban Development Corporation (HUD) is a unit which wins successful operations and people’s confidence. Linh Dam urban area was put into use at the time that apartment blocks started appearing in Hanoi. Ten years ago, the model of apartment block management remained lax; therefore, HUD had to send its cadres abroad to learn management experience.

 

After graduating from training courses, HUD decided to open Housing Service Company which specialises in arranging a management group at each building for keeping vehicles and ensuring security. People only had to pay VND30,000 for these services, excluding vehicle keeping.

 

However, not all firms can implement the model successfully like HUD. In 2003, Vinaconex founded Vietnam Urban services and Investment Joint-stock company (VINASINCO) to manage and provide services for 13 apartment buildings. However, Vinaconex failed to carry out its strategy as people living in the buildings complained about the way of serving by VINASINCO which was said to often raise service prices. For instance, it increase fees for vehicles keeping to 300 per cent/motorbike. Until people asked it to specify every receipts and expenses, they detect a range of the company’s wrongdoings.

 

In reality, capacity of the management board at apartment buildings is still limited while they have to take high responsibility. When problems occur, they are often confused in finding out solutions. Therefore, the property and housing management department said, it is necessary to reconsider the complemented and revised laws to develop the board’s capacity fully.