Tenants need some protection under law

Disputes between tenants and landlords at high-rise apartments are becoming more common. Viet Nam News reporter Khanh Linh spoke with a range of people involved in the issue.

Nguyen Manh Khoi, deputy director of the Department for Housing Management and Real Estate Market under the Ministry of Construction

Nguyen Manh Khoi

The main reason for the recent disputes is over ownership of public areas in the apartment buildings such as parking places, basements, corridors and the costs of these services.

According to the Ministry of Construction's Circular 16/2010, the sales contract must contain all the terms of agreement relating to the rights and responsibilities of the parties, including the provisions of common and private ownership towards these areas and additional service costs based on local regulations on limits for service charges.

Basically, the provisions are negotiated between the investors and homebuyers and go into effect when the contract is signed. When a dispute occurs, the authority or the court will look at the contract to resolve the problem.

In my point of view, the recent disputes are partly because of buyers. They hastily spent a large sum of money to buy an apartment but pay little attention to their rights and responsibilities. Some do not read the contract carefully before signing. In these cases, if based on the provisions in the signed contract, it's likely that the advantage will belong to the investor.

The reason buyers are in a hurry is that the supply of apartments was rather limited a couple of years ago. Customers only cared about getting an apartment and quickly signed contracts without getting legal advice as they feared losing the opportunity to buy the apartment. The investors might take advantage of this situation to create terms that bring more profit for them.

Thus, it is important that buyers should keep a cool head and carefully study the terms of the deal, especially those terms that are likely to cause conflict. Investors have a deep understanding of the law and will make profits accordingly. Those who make housing transactions should seek legal advice to assure their rights at legal aid centres, law offices, law consulting companies or send questions to the department for legal consultancy.

In the case of some disputes over service fees, people usually compare the Ha Noi People's Committee's regulation of VND4,000 (US$0.2) per square metre as the fixed rate for this kind of service. Yet this is not totally valid as it only applies to basic services such as cleaning services or elevator operation. This amount of money will increase at apartment buildings with modern utilities such as Keangnam, Golden Westlake or the Manor.

Currently, no legal documents classify the types of apartment buildings and the concept of ‘cheap' or ‘luxury' apartments doesn't exist in the law. Investors use this concept to classify their market and help consumers tell the difference between good and so-so products. As a result, the service cost is mainly the result of negotiations between investors and buyers, and this method can easily result in disputes later.

The establishment of a management board at apartment buildings will protect the interests of its residents. They, together with investors, have the right to choose the management company for the building and find another company when the one chosen by the investors does not perform well.

Most countries in the region have their own law on apartment buildings. I think the State should have a decree on this issue. In other countries, they have so-called building codes that regulate all activities related to high-rise apartment buildings. This housing model has proved to solve the problem of living space in big cities but we need a legal framework to handle all the potential issues.

Nguyen Van Da, deputy director of Vinaconex Xuan Mai Concrete and Construction JSC

Nguyen Van Da

Disputes over the management of apartment buildings are inevitable and unavoidable as both investors and home buyers only care about their own benefits.

Most residents believe that they can freely use the public areas in buildings when they purchase their apartments. In fact, to live in an apartment building means to share public areas and to share the costs related to these facilities. The money paid for the apartment does not cover service costs, including cleaning services, security guards, parking expenses or lighting. This cost is low or expensive depending on the building. Investors and buyers should share this kind of cost.

For example, at our apartment buildings, the cleaning service is VND200,000 per household, parking fees are VND60,000 per motorbike per month and VND1.2 million per car per month. This rate is acceptable and within the city's regulations. However, these fees are higher at more modern buildings. You get what you pay for.

Investors should also clearly discuss issues related to garage basements, corridors, elevators and lobbies and other common areas. When a dispute occurs, the management board needs to enter a dialogue with investors based on signed contracts.

Pham Quang Hai, head of the interim representative board of Ha Noi-based Keangnam Landmark Tower

Pham Quang Hai

I bought an apartment at Keangnam in 2010. The contract followed a common pattern drafted by investors and we had few opportunities to change the terms, which are always good for investors. For example, in the garage, the whole system is equipped with facilities such as fire prevention systems, cameras, utilities and ventilation systems which come under common ownership, but residents bear the cost, while the garage remains as the investor's private property.

When receiving their apartments, many buyers found shoddy infrastructure such as poor drainage in toilets, peeling walls and warped wooden floors. The investor also failed to repair the apartments of about 900 households in a timely way. Letters of complaint or request for repairs by residents sent to the investor received absolutely no response.

In the following months, although the residents paid fees of up to VND21,000 per square metre per month, we continued to receive poor services. The investor and its operator refused to take responsibility for any losses, accidents, theft or attacks inside and around the building.

After one year of disputes, with the establishment of the representative board, the investor finally apologised to us and promised to improve the quality of services. Residents will monitor the implementation of the investor's commitments.

From my experience, I think the infrastructure for basic needs for residents such as parking places should be defined as common ownership. The cost can be calculated into the apartment sale price and specified separately in the contract.

I strongly support the drafting of a law on apartment buildings and sale contract should be issued with further details by the authority to protect consumers.

Investors should change their views on profits and offer after-sale services as a responsibility to their customers. This is a good way of improving their reputation. — VNS