Proposed Regulations on Compulsory Transfer of Maintenance Funds for Apartment Buildings

Photo: Illustration – Residents are frustrated with the delayed transfer of maintenance funds.

The Ministry of Construction has proposed new regulations regarding the compulsory transfer of maintenance funds for apartment buildings. The aim is to address the issue of many developers holding onto these funds, causing frustration among residents.

Compulsory Transfer from Shared Ownership Maintenance Fund

The draft decree stipulates that if a developer fails to transfer the shared ownership maintenance funds according to the current housing laws before this decree comes into effect, the local authorities can enforce the transfer. This will apply to cases where the developer establishes a separate account to collect the funds from apartment owners.

If the maintenance fund account is empty or lacks sufficient funds, the authorities can enforce the transfer from the developer’s business account, pursuant to Article 80 of the proposed decree. If the business account is also empty or lacks sufficient funds, the authorities can proceed with the seizure of the developer’s assets, as specified in Article 81 of the proposed decree.

In cases where the developer fails to contribute to the maintenance fund for the unsold or unleased part of the apartment building, the district-level People’s Committee is responsible for issuing a compulsory transfer decision. The funds will be retrieved from the developer’s business account and handed over to the Management Board, in accordance with Article 80 of the proposed decree. If the business account is empty or lacks sufficient funds, the authorities can proceed with the seizure and auction of the developer’s assets, as outlined in Article 81 of the proposed decree.

Photo: Illustration – The Ministry of Construction proposes regulations on the compulsory transfer of maintenance funds.

Compulsory Transfer from Developer’s Business Account

Regarding the compulsory transfer from the developer’s business account, the district-level People’s Committee will request the financial institution to provide information on the developer’s business account and the balance within. Within seven days of receiving the committee’s request, the financial institution must provide the requested information.

Based on the information provided, the district-level People’s Committee will issue a decision to enforce the transfer of funds from the developer’s business account to the Management Board. This decision will be sent to the Ministry of Construction, the developer, the Management Board, and the financial institution overseeing the developer’s account. The Management Board is responsible for publicly announcing this decision on the notice board of the apartment building.

Within five days of receiving the enforcement decision from the district-level People’s Committee, the financial institution must transfer the specified amount from the developer’s business account to the Management Board’s designated account. Once the transfer is completed, the financial institution must notify the district-level People’s Committee, the Ministry of Construction, the developer, and the Management Board.

Compulsory Seizure and Auction of Developer’s Assets

Regarding the compulsory seizure and auction of the developer’s assets, the district-level People’s Committee, in coordination with the Ministry of Construction, the police, and relevant agencies, will inspect and determine the specific area of the developer’s apartments or land within the project where the apartment building is located. This inspection is carried out to facilitate the seizure and auction of assets to recover the maintenance funds.

If the developer does not have any apartments or land in the project or the value is insufficient to cover the required maintenance funds, the authorities will identify other assets belonging to the developer for auction. The district-level People’s Committee will only seize and auction apartments, land, or other assets equivalent in value to the necessary maintenance funds to be transferred to the Management Board, including the expenses for the enforcement and auction process.

Once the specific area of the developer’s assets is determined, the Department of Construction must, within ten days, submit a written request to the district-level People’s Committee to issue a decision on the compulsory seizure and auction of the developer’s assets to recover the maintenance funds. The decision must clearly state the basis for its issuance, the name and address of the developer, the specified maintenance fund to be recovered, the type and quantity of assets subject to seizure, and the location of the asset seizure.

After the successful auction of the assets, a record must be made, containing the signatures of all relevant parties. If the amount from the auction exceeds the required maintenance funds and the expenses for the enforcement and auction process, the Department of Construction has the responsibility to coordinate with the auctioning organization to return the surplus amount to the developer.

These proposed regulations aim to ensure the timely transfer of maintenance funds from developers to the Management Boards of apartment buildings, alleviating the frustrations of residents. They will provide a legal framework for enforcing the transfer and recovering the necessary funds to maintain the shared ownership areas of apartment buildings.