Assessment of Maintenance Fee Proposed by Condominium Developer

Mr Melvin Yong Yik Chye asked the Minister for National Development (a) what criteria does the Building and Construction Authority (BCA) use when approving the proposed maintenance fee put forward by a condominium developer; (b) whether the advertised maintenance fee during a condominium sales launch has to be approved by BCA; and (c) what safeguards are available for consumers when the eventual maintenance fee is significantly higher than what was earlier marketed.

Condominiums in Singapore vary in size, mix and typology of units, as well as the types of amenities and facilities. Hence, maintenance costs of essential services will vary across developments. Developers typically decide the maintenance charges for new condominiums based on the projected maintenance costs for the development. They are required to seek approval from the Commissioner of Buildings on the maintenance charges prior to collection and typically do so just before handing over the strata lots to purchasers.

Prior to approving the maintenance charges, the Building and Construction Authority verifies that the charges are related to the maintenance and management of the common property within the condominium and checks that they are reasonable and substantiated by quotations from service providers and vendors.

For new strata-titled condominiums, the developer is required to hand over the management, including the maintenance funds collected, to the management corporation after the first annual general meeting (AGM). From the first and subsequent AGMs, unit owners can collectively determine the reasonable services required for their condominiums and assess if rate adjustment is warranted.