Exorbitant monthly service fees for high-end apartments rented out as offices are creating major headaches for businesses.
Exorbitant service fees at the Dich Vong Hau apartment block
In some cases, office service fees are 40 times higher than those for households.
Great disparity
Companies renting space at the D5 apartment block in Hanoi’s Dich Vong Hau, Cau Giay District are incurring exorbitant service fees. Businesses are being forced to pay as much as VND4 million (USD193.2) per month each for apartment services, 40 times more than the VND100,000 (USD4.8) charged per household. The fee for families in some first floor apartments have been set at VND2 million (USD96.6).
In addition, car parking fees for companies are triple the normal residential rates, while parking fees for staff motorbikes are double the normal fees.
Those renting space in the Keangnam Hanoi Landmark Towers on Pham Hung Road are also moaning over their service fees.
Over 70 residents recently sent a petition to the investor, Keangnam Vina Limited Company demanding a lowering in fees.
According to their lawyer, Keangnam has been applying fees far in excess of municipally regulated rates. Car parking fees currently stand at VND1.46 million (USD70.6) per month, with motorbikes charged a monthly fee of VND104,000 (USD5). Yet the local authorities have stipulated a ceiling of only VND875,000 (USD42.2) for cars and VND45,000 (USD2.1) for motorbikes.
Keangnam’s management fee is set at approximately VND21,000 per square metre, a rate higher than comparable buildings such as Vincom B and Sky City.
Improper fees
Parking fees applied at Keangnam building
This is not the first time that residents in high-end apartment blocks have complained about unreasonable service fees.
Residents in Keangnam buildings plan to bring their case to trial if the investor fails to take action prior to June 24. There is earlier precedence of residents succeeding in persuading investors to halve their fees.
Some businesses have complained, suggesting keangnam should just rule out renting to companies rather than charging excessive service fees.
The Ministry of Construction has just completed a proposed circular that provides guidance for the use of residential apartments as offices.
According to the proposal, an apartment will only be able to be used for commercial use if the office head is the owner of the property.