Circular No. 37/2009/TT-BXD guiding the method for determining and managing the price of apartment building services

CIRCULAR

Guidelines for Determining and Managing the Price of Apartment Building Services

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Based on the Housing Law No. 56/2005/QH11 dated November 29, 2005 of the 11th National Assembly;

Pursuant to Decree No. 17/2008/NĐ-CP dated February 4, 2008 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Construction;

The Ministry of Construction guides the methods for determining and managing the price of apartment building services as follows:

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

1. Scope of Regulation: This Circular guides the methods for determining and managing the price of services for apartment buildings and multi-story buildings with mixed-use purposes that include residential areas (hereinafter referred to as apartment buildings), excluding apartment buildings constructed under Decision No. 65/2009/QĐ-TTg on certain mechanisms and policies for developing housing for university, college, vocational high school, and vocational training students to rent; Decision No. 66/2009/QĐ-TTg on certain mechanisms and policies for developing housing for workers in industrial zones to rent; and Decision No. 67/2009/QĐ-TTg on certain mechanisms and policies for developing housing for low-income people in urban areas issued on April 24, 2009 by the Prime Minister.

2. Applicability: This Circular applies to organizations and individuals related to the determination and management of the price of apartment building services.

Article 2. Principles for Determining the Price of Apartment Building Services

1. The price of apartment building services shall be determined based on the principle of accurately and sufficiently covering all costs, including a reasonable profit margin for managing and operating apartment buildings normally; but it must be consistent with the economic and social realities of each locality and the income levels of residents at different times, and must be approved by more than 50% of members of the Apartment Building Management Board through voting or secret ballot. For apartment buildings where a Management Board has not been established, the price of apartment building services must be agreed upon by more than 50% of residents living in the apartment building through voting or secret ballot. In cases where the price of apartment building services is already stipulated in the sales contract for the apartment, such stipulations shall be followed.

2. The service costs included in the price of apartment building services shall be collected and expended according to the principle of self-collection, self-expenditure, and transparency to ensure normal operation of the apartment building.

3. Costs for fuel, electricity, water, telephone, internet, and other services for individual apartments shall not be included in the price of apartment building services, but shall be directly paid by the users of the apartments to the service providers (if there is a separate usage contract) or to the management company (if there is no separate usage contract) based on actual consumption and calculated with additional losses (if applicable).

4. Maintenance costs encompass all expenses for routine maintenance, minor repairs, medium repairs, major repairs, and emergency repairs aimed at maintaining the quality of the apartment building; and shall not be included in the price of apartment building services.

5. Revenue from operating other services belonging to the common property of the apartment building (if any) shall be accounted for in accordance with the financial regulations set by the Ministry of Finance and used to offset service costs for the purpose of reducing the price of apartment building services.

6. For apartment projects using premium services not part of the common property (such as saunas, swimming pools, tennis courts, or other premium services), the users of these premium services shall negotiate with the management company; and such costs shall not be included in the price of apartment building services.

Chapter II

METHODS FOR DETERMINING THE PRICE OF APARTMENT BUILDING SERVICES

Article 3. Contents of Costs Composing the Service Fee for Apartment Buildings

1. The contents of apartment building services include activities providing services such as: controlling and maintaining the operation of equipment systems belonging to common ownership or shared use of apartment buildings, security, cleaning, waste collection, garden care, pest control, and other services ensuring normal operation of apartment buildings.

2. The service fee for apartment buildings includes:

2.1. Apartment building service costs (including direct costs, general management costs of the managing operating enterprise, costs for the Management Board (if any));

2.2. Reasonable fixed profit;

2.3. Value-added tax.

3. Contents of Costs Composing the Service Fee for Apartment Buildings:

3.1. Apartment building service costs, including:

3.1.1. Direct costs:

a) Energy consumption costs, raw materials, fuel, and other costs (if any) to serve the operation of apartment buildings (including elevators, water pumps, backup generators, technical infrastructure systems, and other equipment);

b) Labor costs for controlling and maintaining the operation of apartment building equipment systems (including elevators, water pumps, backup generators, technical infrastructure systems, and other equipment);

c) Costs for services within the apartment building area such as: security, environmental sanitation, waste collection, garden care, pest control, and other services (if any) determined based on the volume of work required and the agreed upon quota in the service contract;

d) Public lighting electricity costs, public water costs in the apartment building area;

e) Office supply costs, furniture, office space costs, living electricity and water costs, and other costs of the apartment building management department.

3.1.2. General management costs of the managing operating enterprise allocated into the apartment building service fee, including:

a) Salary, wage costs, and other allowances from the salary fund, social insurance, health insurance, trade union fees, and other deductions from the salary fund paid to the management department of the enterprise:

- Salary costs are determined based on the staffing level of employees and the current salary, allowances, and other deductions from the salary fund according to the current regulations of the State;

- Wage costs are determined based on labor contracts or collective labor agreements between the managing operating enterprise and workers.

- Social insurance, health insurance, and trade union fees for employees according to the current regulations of the State.

b) Depreciation costs of fixed assets of the managing operating enterprise. The allocation, management, and use of depreciation costs of fixed assets follow the regulations of the Ministry of Finance.

3.1.3. Costs for the Management Board, including responsibility allowances for members of the Management Board and other reasonable costs serving the activities of the Management Board.

3.2. The maximum fixed profit rate for the managing operating enterprise is 10% of the apartment building service costs after deducting income from business and services of areas belonging to common ownership of the apartment building (excluding value-added tax).

3.3. Value-added tax: According to the current regulations of the State.

Article 4. Determining the Price of Apartment Building Services

The formula for determining:

Wherein:

of_dv - The price of apartment building services per square meter of floor area owned by the apartment owner or other privately-owned floor area (VND/m2/month) (including VAT);

Q – Total annual service costs of the apartment building (VND/year) (excluding VAT);

T_dv – Annual revenue from operating and providing services to common areas of the apartment building (if any) (VND/year);

S – Total floor area owned by the apartment owner and other privately-owned floor area (if any) (m2);

12 – Total number of months for calculating the service usage price in a year;

P – Reasonable profit margin (percentage);

K₁ – Discount factor due to support from the management company to reduce service prices (if any);

K₂ – Service pricing allocation factor (for floor areas outside residential purposes such as offices, commercial areas...) as specified by the Apartment Building Management Board (if any);

T – VAT rate.

Article 5. Determining the Price of Apartment Building Services Not Managed by a Management Company

For apartment buildings not managed by a management company, the apartment building service costs do not include the general management costs of the management company as stipulated in Clause 3.1.2, Article 3 of this Circular.

Chapter III

MANAGEMENT OF APARTMENT BUILDING SERVICE PRICES

Article 6. Responsibilities of the Project Investor, Management Company, and Apartment Building Management Board

1. The project investor of the apartment building shall base on the maximum collection level (price ceiling) or service fee range prescribed by the provincial People's Committee to calculate the effectiveness when establishing the project and formulating the service fee collection plan to serve as the basis for signing the apartment purchase and sale contract and the apartment building service provision contract;

2. The management company shall proactively calculate and determine the apartment building service price according to the guidelines set out in this Circular to submit to the project investor (if any) or the apartment building management unit as the basis for approval by the Apartment Building Management Board or residents currently living in the apartment building;

3. The Apartment Building Management Board shall be responsible for monitoring and supervising the operation and management according to the contents of the signed contracts; inspecting, settling, and terminating contracts with the management company; directly collecting or authorizing the management company to collect the apartment building service fees.

Article 7. Basis for Adjusting Apartment Building Service Prices

1. The development conditions of the national and local economy and average income per capita during each period;

2. The supply and demand relationship regarding the quantity and quality of apartment building services;

3. Market price fluctuations or changes in state policies that increase (decrease) the apartment building service costs and reasonable profits of the management company by 10%.

Chapter IV

IMPLEMENTATION

Article 8. Responsibilities of State Management Agencies

1. The Ministry of Construction shall take the lead and coordinate with relevant ministries, sectors, and provincial People's Committees to guide and periodically organize inspections and supervision of the implementation of the contents of this Circular.

2. Provincial People's Committees are responsible for:

2.1. Based on the actual situation of the locality, reasonable costs of apartment building services, to prescribe the maximum collection level (price ceiling) or service fee range for apartment buildings according to different levels and categories of apartment buildings, service quality, and the actual situation of the locality to apply within the province; at the same time report to the Ministry of Construction for tracking and inspection.

2.2. Based on the local budget situation, actual income of residents in each period within the locality, and to encourage people to live in apartment buildings to save land funds, the provincial People's Committee shall consider deciding to provide partial support for apartment building service fees.

2.3. Decide or authorize the Department of Construction, District People's Committee to approve apartment building service fees when there is a dispute over service fees in the locality.

2.4. Review and adjust the maximum price level or service fee range to suit the actual situation.

2.5. Organize, direct, supervise, and inspect the implementation of the provisions of this Circular within the province.

Article 9. Responsibilities of organizations and individuals related to the determination and management of service prices for apartment buildings

1. The operating management enterprise shall be responsible for:

a) Organizing the management, operation, and provision of services in accordance with the agreements in the contract, ensuring safety, security, order, and fostering civilized urban living habits for residents in the apartment building; at the same time maintaining the quality, architecture, landscape, and environmental sanitation of the apartment building;

b) Organizing the collection, expenditure, and accounting of apartment building service prices and other revenues and expenditures in a transparent manner in accordance with the regulations of the State.

2. The apartment building management board shall be responsible for:

a) Supervising the implementation of contracts by the operating management enterprise; and periodically reporting annually or urgently to the provincial People's Committee, district People's Committee on revenue and expenditure related to apartment building service prices if requested by such committees. At the same time, they must publicly post the revenue and expenditure of apartment building service prices for residents to know annually or report urgently if more than 50% of households request;

b) Checking financial reports on management and operation conducted by the operating management enterprise according to signed contracts and reporting to the Apartment Building Meeting as prescribed.

3. In cases where the apartment building service price, calculated correctly and fully according to the provisions of Article 2, exceeds the price or price range set by the provincial People's Committee, and is agreed upon by more than 50% of the residents currently living in the apartment building or more than 50% of members of the apartment building management board, then the service price and quality should be implemented as agreed between the operating management enterprise and the residents; while simultaneously reporting to the provincial People's Committee and the Ministry of Construction for monitoring and inspection.

4. In case disputes arise regarding apartment building service prices, the operating management enterprise may temporarily collect fees based on the ceiling price or within the price range set by the provincial People's Committee until the dispute is resolved.

5. It is encouraged for other organizations and individuals to implement the determination and management of apartment building service prices in accordance with the provisions of this Circular.

Article 10. Provisions on implementation

1. This Circular takes effect 45 days from the date of signature.

2. During the implementation process, if there are difficulties, it is recommended that relevant organizations and individuals submit feedback to the Ministry of Construction for review and guidance./.