Assessment of Maintenance Fee Proposed by Condominium Developer
Ministry of National DevelopmentSpeakers
Summary
This question concerns Mr Melvin Yong Yik Chye’s inquiry regarding the criteria and safeguards for condominium maintenance fees proposed by developers and approved by the Building and Construction Authority. Minister Desmond Lee explained that developers must seek approval from the Commissioner of Buildings prior to collection, which usually occurs just before handing over units to purchasers. The Building and Construction Authority verifies that proposed charges are reasonable, substantiated by quotations, and related specifically to common property management. Following the first annual general meeting, developers transfer management and collected funds to the management corporation formed by the residents. This transition empowers unit owners to collectively assess the services required and determine if any adjustments to the maintenance rates are necessary.
Transcript
79 Mr Melvin Yong Yik Chye asked the Minister for National Development (a) what criteria does the Building and Construction Authority (BCA) use when approving the proposed maintenance fee put forward by a condominium developer; (b) whether the advertised maintenance fee during a condominium sales launch has to be approved by BCA; and (c) what safeguards are available for consumers when the eventual maintenance fee is significantly higher than what was earlier marketed.
Mr Desmond Lee: Condominiums in Singapore vary in size, mix and typology of units, as well as the types of amenities and facilities. Hence, maintenance costs of essential services will vary across developments. Developers typically decide the maintenance charges for new condominiums based on the projected maintenance costs for the development. They are required to seek approval from the Commissioner of Buildings on the maintenance charges prior to collection and typically do so just before handing over the strata lots to purchasers.
Prior to approving the maintenance charges, the Building and Construction Authority verifies that the charges are related to the maintenance and management of the common property within the condominium and checks that they are reasonable and substantiated by quotations from service providers and vendors.
For new strata-titled condominiums, the developer is required to hand over the management, including the maintenance funds collected, to the management corporation after the first annual general meeting (AGM). From the first and subsequent AGMs, unit owners can collectively determine the reasonable services required for their condominiums and assess if rate adjustment is warranted.