Regulations on contract for apartment building administration and operation services in Vietnam

Regulations on contract for apartment building administration and operation services in Vietnam (Internet image)

Regarding this matter, LawNet would like to answer as follows:

1. Regulations on contract for apartment building administration and operation services (the service contract) in Vietnam

According to Article 29 of the Regulation on management and use of apartment buildings issued together with Circular 02/2016/TT-BXD (amended in Circular 28/2016/TT-BXD), regulations on contract for apartment building administration and operation services are as follows:

-  The management and operation of the apartment building must be carried out under a service contract for management and operation of the apartment building signed by and between the managing unit and the management board of that apartment building.

The service contract signed by the parties must include main contents prescribed in Clause 2 of Article 29 of the Regulation on management and use of apartment buildings issued together with Circular 02/2016/TT-BXD (amended in Circular 28/2016/TT-BXD) and made by referring to the template of service contract stated in the Appendix 02 to the Regulation on management and use of apartment buildings.

Phụ lục số 02

- The service contract comprises following information:

+ Full name, address, representatives participating in contract signing;

+ Scale and area of shared portions inside and outside apartment buildings that need administering and operating;

+ Requirements for quality, quantity, time and venue for provision of services;

+ Service price calculated on the basis of usable square meter (m2); payment of charges;

+ Service contract duration;

+ Cases of contract termination;

+ Rights and obligations of the parties; responsibility for coordination between the parties; settlement of disputes over terms and conditions of the contract;

+ Other agreements;

+ Effectiveness of the contract;

- Acceptance, payment, financial settlement and contract settlement shall be carried out according to terms and conditions in the contract and civil laws.

2. Regulations on apartment building administration and operation service price (the service price) in Vietnam

Article 30 of the Regulation on management and use of apartment buildings issued together with Circular 02/2016/TT-BXD stipulates the apartment building administration and operation service price in Vietnam as follows:

- The service price shall be instructed in Article 106 of the Law on Housing 2014 and based on types of apartment buildings and agreements with managing units. In case an apartment building is put into service but the first apartment building meeting is yet to be held, the service price shall be decided by the investor and specified in the purchase and lease purchase contract; after the first apartment building is held, the service price shall be based on negotiations with managing unit.

- The service price is expressed in Vietnam dong and calculated according to usable square meter (m2) or other areas within the apartment building (determined according to carpet area).

- For mixed-use apartment buildings, the service price for the functional area, and privately-owned area used as auto parking space is determined as follows:

+ The service price for office, service and commercial area shall be negotiated between the parties on the basis of actual business, service and office activities and specific positions of apartment buildings.

+ The service price for privately-owned area used as auto parking space shall be negotiated between parties and may be lower than the service price for apartment buildings in the same apartment building. The Regulation on management and use of apartment buildings issued together with Circular 02/2016/TT-BXD also apply to privately-owned areas used as auto parking space of residential apartment buildings.

+ If the service price as prescribed in Points a and b, clause 3 of Article 30 of the Regulation on management and use of apartment buildings issued together with Circular 02/2016/TT-BXD cannot be agreed by the parties, the service price issued by People’s committees of provinces where such apartment building is situated shall be used instead.

- Managing units shall determine and collect expenditures on administration and operation of apartment buildings from owners and occupants on the basis of prices prescribed in Article 30 of the Regulation on management and use of apartment buildings issued together with Circular 02/2016/TT-BXD.

To Quoc Trinh

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