Management and operation of apartment buildings - What should enterprises pay attention to?

In Vietnam, management and operation of apartment building services are increasingly focused in the context of more and more apartment construction projects appeared. Those projects are distributed essentially in densely populated cities or places with convenient traffic locations and, therefore, increase their attraction to consumers. For such apartment construction projects, project investors hope their projects to be smoothly implemented, with stable operating systems to optimize maintenance or operating costs. While to the customers, apart from the price and convenient location, safety during the use period of the apartment is one of the central and decisive factors. These concerns mentioned belong to the scope of management and operation of apartment building services.

The following article will analyze some fundamental issues about the management and operation of apartment building services in Vietnam so that readers can get an overview of this service.

1. Knowing about the management and operation of apartment building services?[1]

According to the guidance of the Ministry of Construction in Circular 02/2016/TT-BXD promulgating the Regulations on management and use of apartment buildings, the management and operation of apartment buildings include the following responsibilities:

• Control, maintain operation, constantly maintain elevator system, water pump, generator, automatic fire alarm system, fire fighting system, fire fighting tools, backup devices and other equipment and other equipment under common ownership and common use of apartment buildings and apartment complexes;
• Provide services of environmental protection, sanitation, waste collection, garden care, ornamental plants, insect extermination and other services to ensure regular operation of the apartment building;
• Other related work.

Note: Owners and users can hire different service providers to perform the above-mentioned operational management responsibilities separately, except for the cases that apartment buildings have elevators, the above responsibilities must be performed by managing and operating apartment building services. Therefore, the owners and users are not separately hiring different services to perform operation management.

The management and operation of apartment building services may sign a contract with the service provider to perform the management and operation responsibilities. However, it must be responsible for the operation management according to the contract content.

2. Conditions to carry out the management and operation of apartment buildings[2]

The management and operation of apartment building services must fully satisfy the following functional and capacity conditions:

• Being established and operating under the provisions of the Law on Enterprises or the Law on Cooperatives and has the function of managing and operating the apartment building;
• There must be professional divisions on management and operation of the apartment building, including technical, service, security protection, sanitation, and environment departments;
• Having a team of officers and employees meeting the requirements of housing operation management, including construction, electrical engineering, water, fire prevention and fighting, operation of equipment attached to the apartment building and have a certificate of training and retraining of professional knowledge on management and operation of apartment buildings in accordance with regulations of the Minister of Construction.

Notes: From April 2, 2016, the regulations on the management and operation of apartment buildings must meet all conditions, submit documents to the Ministry of Construction to prove their capacity and apply for an operation license and finally publish their information has been abolished.[3] Accordingly, the units will self-check and meet the functional and capacity requirements to perform the management and operation of the apartment building.

3. Information disclosure[4]

The disclosure of information about the management and operation of the apartment building unit is no longer a mandatory obligation from January 1, 2020. Therefore, if the service providers want to publicize its information, they can send the information to be disclosed to:

1. The website of the Department of Construction where the apartment building management and operation unit is headquartered; or
2. Housing and Real Estate Market Administration.

The information provided to the Department of Construction, Department of Housing and Real Estate Market Management to post the above information includes the name of the apartment building management and operation unit, the full name of the legal representative, address and contact phone number of the management and operation of the apartment building.

4. Some regulations on handling administrative violations

The law abolished administrative procedures related to the appraisal of conditions for performing the apartment building management and operation unit. However, the companies perform the management and operation of apartment building services when not meeting the conditions may be subjected to a fine ranging from VND 60,000,000 to VND 80,000,000 for one of these following violations:[5]

• Without the function of managing and operating the apartment building, but still performing the management and operation of the apartment building;
• There are not enough professional sections on management and operation of apartment buildings as prescribed;
• Employing people without certificates of training and retraining in professional knowledge on management and operation of apartment buildings to perform professional jobs as prescribed;
• Managing and using operating management funds in contravention of regulations;
• Do not send the apartment building management and operation unit information to the Ministry of Construction for posting on the website according to regulations.

In addition, the investor will be fined from 80,000,000 VND to 90,000,000 VND when choosing an apartment building management and operation unit who not meet the conditions and capacity as prescribed.[6]

Therefore, the investor, the apartment building management, and the management and operation of apartment buildings need to check the business requirements and ensure compliance with the statutory conditions before operating. In addition to limiting risks, losing time, and getting caught up in the administrative violations mentioned above, the ultimate goal for using a qualified condominium operation management unit is to protect people living in the apartment building, minimizing possible risks.