Building Owner’s Committee: Key Considerations in Applying the Housing Law 2023

The Housing Law 2023 introduced additional requirements for the Building Owner’s Committee. Savills will provide detailed information about new regulations in the Housing Law 2023 that Building Owner’s Committees need to consider for appropriate solutions, ensuring residents’ benefits and avoiding potential legal issues.

According to Housing Law 2023, the Building Owner’s Committee represents the developer or residents responsible for managing and using the building following legal regulations. The Building Owner’s Committee’s term is 03 years, and is re-elected at the annual Owners’ Committee Meeting .

The Housing Law 2023 also introduces new regulations on benefits and responsibilities of the Building Owner’s Committee to ensure operational efficiency, balance benefits, and enhance residents’ experience.

Read more: How to Distinguish Building Owners' Committees from Management Boards

NEW REGULATIONS IN THE HOUSING LAW 2023 ON BENEFITS AND RESPONSIBILITIES OF THE BUILDING OWNER’S COMMITTEE

Requirements for the Building Owner’s Committee members

According to Article 20 of the Regulations on Management and Use of Apartment Buildings attached to Circular 05/2024/TT-BXD, the Building Owner’s Committee members must participate in operational management training courses to receive certification within 3 months from the recognition date. This regulation in the Housing Law 2014 is only encouraging, showing that the Housing Law 2023 aims to improve operational quality by ensuring the Building Owner’s Committee has qualified members with building management experience.

The amended law also states that foreigners can join the Building Owner’s Committee; however, they need to be able to use Vietnamese throughout the working process.

Wages for the Building Owner’s Committee

According to Article 151 in the Housing Law 2023, operational management services exclude fire insurance premiums, maintenance costs, vehicle parking costs, fuel, energy, domestic water, television services, communication costs, wages for Building Owner's Committees and other service fees for services used by apartment building owners and users.??

According to Clause 9, Article 19, Regulations on management and use of apartment buildings attached to Circular 05/2024/TT-BXD, owners and users will pay the wages of the Building Owner’s Committee in accordance with the decisions of the Owners’ Committee Meeting.?

The Owners’ Committee Meeting can refer to the regional minimum wage to decide the wage level corresponding to the members' responsibilities and obligations based on the specific conditions of each building, group of condominiums, and locality.

Management of the Building Maintenance Funds

According to Clause 1, Article 11 of the Regulations attached to Circular 02/2016/TT-BXD, the supervision of building maintenance can be carried out by the Building Owner’s Committee or a consulting agent with sufficient supervision capacity, including the following items:

• Maintenance of elevators, electrical systems, and water systems.
• Waste treatment.
• Fire prevention and fighting systems.
• Other common systems and other contents decided by the Owners’ Committee Meeting.

Revenue generated from the common areas

According to Article 153 of the Housing Law 2023, revenue generated from common areas must be paid into maintenance funds managed by the Building Owner’s Committee. In some cases, this revenue can be formed after accounting, deducting the operational costs of the common areas. Therefore, the Building Owner’s Committee needs to accurately identify the definition of revenue and expenditure items to develop accurate budget plans.

The costs that constitute the revenue from common areas include:

• Security costs.
• Sanitation costs.
• Pest control costs.
• Energy costs.
• Software costs related to managing the parking lot (parking management system, etc.).
• Other related costs.

KEY CONSIDERATIONS FOR THE BUILDING OWNER’S COMMITTEE WHEN APPLYING THE HOUSING LAW 2023

Review the regulations on the management and use of apartment buildings to update new provisions and have them approved at the upcoming Owners’ Committee Meeting.

Adjust the budget according to the new regulations and get it approved at the Owners’ Committee Meeting if amended to ensure transparency.

Participate in operational management training courses to update knowledge and operational plans according to the new regulations and receive a certification in apartment building management.

The amended Law brings positive changes to operational management, clarifying certain aspects of the Housing Law 2014. However, the change in the effective date from 1 January 2025 to 1 August 2024 puts pressure on project preparation and adjustment time. The Building Owner’s Committee needs to closely follow any changes in the Law or upcoming implementation documents and guidelines to ensure full compliance with legal regulations.

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