The hidden costs of buying an apartment
by Thanh Hai
The 400 well-heeled residents living in the 48-storey Keangnam Landmark Tower in Me Tri District, Ha Noi, are unhappy. Despite charging US$3,000 per square metre to buy a flat in the luxury tower block, the investors cut power to the building and other services because residents refuse to pay what they say was an illegally inflated service fee of VND18,843 (US$0.9) per square metre each month.
Residents, not unjustifiably, claim the rate for service fees established by the Ha Noi People's Committee is VND4,000 ($0.2) per square metre per month. The two sides have yet to reach an agreement, although the property developers have temporarily restored power to the lifts.
On November 21, Keangnam gave residents an ultimatum – pay up or we will cut services to the building. On December 3, the building's management board de-activated smart cards for the lifts in the 48-storey tower. All of the storey's emergency exits were locked a few hours later.
A Keangnam representative said residents in the tower had not paid their service fees and were therefore breaking their contracts. The management board said the supervision of vital services was necessary to force residents to comply with their obligations.
Hundred of residents, including pregnant women, children and the elderly, were in effect locked into their apartments – or locked out. Many were forced to buy portable cookers to prepare meals. Some even pitched tents in the lobby between towers A and B to camp out in.
"I couldn't enter my flat because my elevator card was deactivated. We are very displeased with Keangnam VINA's behaviour. They have acted irresponsibly," said head of the residential unit Tran Xuan Trach.
Le Minh Thao, another resident, said that according to the management board's calculation she would have to pay about $100 in fees for her 107sq.m flat for security, cleaning and reception services. She even said that two weeks ago a Keangnam resident was assaulted by a group of hired thugs and that security officers refused to intervene.
"We have spent a great deal of money to buy a home from Keangnam. It's unbelievable that we're prevented from using the lifts," Thao said.
Thao added that the service fee in a nearby building was just VND10,000 ($0.5) per square metre per month and that that building had three big swimming pools and a garden for just 300 households, while Keangnam had just one small swimming pool for 900 families.
Keangnam is also accused of cutting power and internet services to families that had not paid their service fees, despite the residents' having paid their electricity bills.
Residents demanded a meeting with Keangnam VINA's chairman Ha Jong Suk but without success. Local police officers have visited the building and ordered the management board to restore power to the lifts. Power was eventually restored shortly after a brief meeting with the management board, local authorities and residents.
Still waiting
According to the residents' temporary representative Trinh Thuy Mai, a letter of complaint was sent to the municipal People's Committee yesterday. Mai added that residents were still waiting for a meeting with Keangnam's investors over the issue.
Similar conflicts over service fees have happened in a number of apartment buildings in Ha Noi such as Sky City Building, Building 93 Lo Duc Street, the Manor and Golden Westlake. Residents say the situation will not go away as long as investors are also the service providers.
According to Government regulations, service fees must be agreed by residents. "Investors have no right to impose inflated charges on residents after apartments have been sold," said Pham Si Liem, deputy chairman of the Viet Nam Construction Association.
Liem said that when more than half of the flats in a building had been sold, residents should establish a management board which would then set service fees.
Ha Noi Construction Department wrote to Keangnam VINA Co Ltd yesterday ordering the company to restore services to Keangnam Landmark Tower but the conflict has yet to be resolved. Nguyen Quoc Tuan, the department's deputy director, said the company was not permitted to cut power and water to the building. The department also ordered Keangnam to meet city regulations on service fees – but the conflict continues. — VNS