When buying an apartment in Vietnam as a foreigner, either for living or for investment, you as the owner are still obliged to continue to pay some fees after the apartment has been handed over to you (even if the unit is unoccupied). The fee we are referring to is called the “management fee”.
So what is the management fee?
The management fee refers to a fee charged by the management company of the project to continue the building operations such as the cleaning and maintenance of the common areas, gardening, pool maintenance, security services, salary of the management company staff, and also it gives you or your tenant access to the facilities of the compound.
If the unit is not occupied however, you don’t need to cover some aditional costs such as parking fees, electricity fees, water consumption, internet or any other costs as prescribed by the management company, but the monthly management fee is a payment you must certainly continue to pay on a monthly basis from the moment the unit is handed over to you.
How much is the management fee?
Well, it depends on the market your property is a part of and the segment type. In Hnaoi, mid-end projects will have a management fee of about 6,000 – 10,000 VND/m2, high-end projects, on the other hand, will have a fee of about 10,000 – 16,500 VND/m2.
Ho Chi Minh City projects are generally more expensive than Hanoi, which is proportionate to the more expensive cost of living compared to the capital. Mid-end projects will have a management fee of about 10,000 – 17,000 VND/m2, while on high-end projects it will cost you about 20,000 – 25,000 VND/m2.
The management fee is always charged on a monthly basis, however, many management companies offer discounts if the fee is paid in advance (6 months to 1 year upfront).
This fee will be used by the building management for such things as: Cleaning common spaces & public utilities, beautifying the landscape, collecting and treating waste, maintaining the garden; maintain & replant the trees/flowers in the decorative areas of the building, security fees, salary for the Management Board and expenses for security guards, cleaning staff and other members of the technical team.
So, is it fair to pay for such fee when the unit is unoccupied?
The answer is YES. When buying an apartment, even though the buyer himself is not in the apartment, the apartment is being enjoyed, protected and cared for by the management company. Therefore, the service fee collected is completely reasonable.
In addition to the monthly management fee, apartment occupants also have to pay maintenance costs with a total rate for the entire life of the apartment. Specifically, home buyers will have to pay 2% of the apartment value when receiving the house. Normally, the maintenance fee will be collected when the customer receives the notice of apartment handover and only has to pay it 1 time. This fee is about 2% of the total gross value of the apartment and is stated in the purchasing contract.
Important: In compounds, the management fee does not cover the cost to access the facilities such as gymnasium or swimming pool. In such cases, the membership to access the facilities must be paid separately.
Apartment buyers must know that all payable fees post handover are specified in the terms of the apartment purchase and sale contract. Therefore, before signing a house purchase contract, buyers need to carefully read and determine the service fees, parking fees, and the apartment maintenance fees for that particular unit.
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