A condominium is an aspirational dream for many, especially those who covet a more exclusive lifestyle living. On one hand, some condominiums may come with full facilities such as gyms, swimming pools, tennis courts, barbecue pits, and even concierge services. On the other hand, small boutique apartments may have limited facilities, such as only security systems for their residents.
The provision of these facilities and services in a strata-titled development is one of the factors that determines how much homeowners have to pay in maintenance fees. This is similar to what HDB homeowners pay monthly as Service & Conservancy Charges (S&CC) for the upkeep of the common facilities in the estate. However, unlike the standardisation of the S&CC charges for the different HDB flat types in a town, the maintenance fees vary between each development for private homeowners.
Here’s what you need to know about condominium maintenance fees.
When Do You Start Paying Maintenance Fees?
As a homeowner of a new development, you would be liable to pay the maintenance fee to the developer as specified under the Sale and Purchase Agreement (S&P). It can start from either the date the developer delivers vacant possession of the unit to you or the 15th day after you have received the Temporary Occupation Permit or Certificate of Statutory Completion.
Typically, you would be required to pay a lump sum of 6-month maintenance charges to the developer. Subsequently, you will be required to pay every quarter or at an agreed upon interval period.
Once the management corporation strata title (MCST) for the development is formed, you would be paying regular maintenance charges to the MCST.
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What Do The Maintenance Fees Cover?
All homeowners (also referred to as lot owners) in a private strata-titled development are automatically part of the Management Corporation. They have equal responsibilities, like contributing to the costs of upkeeping the common property in proportion to their lot’s share value.
These contributions made in the form of maintenance fees go into two funds, the management and sinking funds, both administered by the MCST.
The management fund is used to cover day-to-day operational expenses and ensure smooth operations in the development. These are recurring expenses such as waste management fees, water and electricity charges, 24-hour security, lift repairs, and cleaning fees for common areas. It also includes paying for building and public liability insurance, repairs, and maintenance of common areas.
On the other hand, the sinking fund is meant to cater for larger and longer-term future expenditures, such as the repainting of the development, the replacement of major communal facilities, or cyclical maintenance.
All MCSTs are required to keep these accounting records, including financial statements, for at least seven years. Moreover, the books and accounts of the MCST must be audited for each financial year.
How Are Maintenance Fees Determined?
The maintenance fee of a condominium is dependent on the extent of the common facilities provided in the development. The more extensive and elaborate the facilities are, the higher the maintenance fees that may be charged, as it costs more to upkeep the common facilities.
Another factor that could affect the overall maintenance cost is the number of units in a development. The bigger the development, the more the cost is shared among a larger number of homeowners, which may bring down the overall maintenance fees. On the other hand, smaller boutique developments will typically have higher maintenance fees as the common facilities are shared by a small group of homeowners.
An increasing contributing factor in recent times is the rising cost of manpower, materials, shipping, and interest, which has pushed up the overall costs charged by service providers. This translates to higher maintenance fees incurred by homeowners.
Combined, these unique factors contribute to the overall maintenance fees charged by a MCST, which differ for each development.
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How Is The Proportion Of Maintenance Fees Determined For Each Unit Owner?
The share value of your unit not only affects your voting rights as a unit owner but also affects your share of the common property, which in turn determines how much you need to pay for maintenance fees.
Typically, the share value of a unit is allocated based on the perceived usage of common facilities. A unit that uses more of the common facilities is assigned a higher share value and, consequently, is required to pay a higher amount in maintenance fees.
For residential properties, the usage of the common facilities is determined by the occupancy. Units are assigned a share value based on the floor area groupings to account for the different number of occupants who are likely to stay in a unit. In other words, units with larger floor area groupings are assumed to have more occupants and thus will have to pay a higher proportion of the maintenance fees in relation to other units within the same development.
The floor area groupings are shown as per the table below:
Floor Area
Share Value*
50 m2 and below
5
51 m2 to 100 m2
6
101 m2 to 150 m2
7
151 m2 to 200 m2
8
*Share value increases by one for every 50 m2 of floor area.
For mixed developments that comprise residential units, offices, and retail shops within the MCST, different weight factors are used to determine the unequal usage of common facilities. Generally, in such developments, retail shops would incur a higher proportion of the maintenance fees to account for their higher usage of common facilities such as air conditioning and other facilities like escalators than owners of offices or residential units.
What Happens When You Don’t Pay Your Maintenance Fees?
As a homeowner, you should make timely payments of the maintenance fees to the MCST based on the agreed interval period, which typically is each quarter. Failure to do so may result in the MCST imposing a late interest fee on the outstanding amount. However, usually, homeowners are given a 30-day grace period from the due date to make the payment before a written demand is served on the defaulter.
If the homeowner still fails to pay within 14 days after the letter of written demand has been served, the defaulter is liable for an offence amounting to a fine. In extreme cases, the MCST may even take up a forced sale action against the unit to recover the unpaid contributions.
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