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5 Things to Know Before Paying Common Facilities Fee at Housing Sub Division or Condos

21 Feb 2019 living tips

Upon reaching the decision to purchase a condominium unit, or a home inside a gated community which is administered by a central juristic person, the buyer will need to come to terms with a particular expense that will result from owning the property. This expense is known as the common facilities fee, common fee or common expense and it is the responsibility of every buyer or owner to settle payment for the fee. The common fee is collected every year and is used to fund the upkeep and improvement of the common space, so that common areas will remain attractive and in good order.

The common fee paid for a condo room or for a home inside a gated community is partly used to maintain and improve common areas. Enlisting the service of a professional building or facilities management firm with an established standard for management will ensure than buildings and facilities remain in good order and retain their structural integrity. Over the long term, this will result in the residential project retaining a higher value than projects with inferior maintenance. An attractive common space that is clean and well-kept will be more desirable for tenants than one that is neglected and dirty. Also, the existence of a good security system makes it safe to live in the respective condo or gated community. Residents will be at ease when they have to be away from the property for long periods, and the property will have higher credibility in the eyes of would-be tenants. Any activity arranged for residents to participate in during their free time will also reinforce the liveability within the residential community.

The common fee collected from the co-owners is used by the juristic person to provide for the following expenses:

1. Expenses from contracts. These expenses are incurred from hiring administration personnel and building technicians, security guards, cleaners, gardeners, pest control service and etc.

2. Utility bills of the residential complex. These include electricity, water, telephone and internet bills.

3. Office supplies. The juristic entity needs office supplies to carry out its daily functions. Supplies include stationery, envelopes, invoice forms, receipt forms, etc.

4. Maintenance and repair expenses. These expenses cover repairs and maintenance within the residential complex. They also go toward the purchase of chemicals for the swimming pool, the refueling of pumps in the fire extinguishing system, and the upkeep of machinery and equipment. Deterioration and breakage of machinery occur more rapidly as a condominium ages, resulting in a continual stream of expenses which may increase incrementally in accordance with the age of the building and the associated systems.

5. Other expenses. These include other expenses that are needed by the juristic entity as it performs its task of managing the residential complex.

What will happen if the common fee is not paid?

Any condominium or gated community which has a low ratio of common fee payers versus non-payers will undoubtedly experience difficulties in funding its administrative affairs. Residential projects that are not adequately cared for will experience the following consequences:

1. Buildings will be dilapidated and associated machinery and systems will deteriorate, owing to lack of up-to-standard maintenance.

2. The value and image of the residential project will deteriorate because of failed upkeep.

3. Unwanted by would-be tenants and residents, who are perturbed the moment they set their eyes on the dilapidated common space that would have otherwise been impressive if it was properly cared for.

4. Lack of credibility and trust, due to lax security.

5. Unwelcoming environment; no sense of community and cooperative activities.

Payment of the common fee is required by law. Failure to settle the common fee may prompt invocation of penalties in accordance with the juristic entity’s regulations. Said regulations are legally binding, as they have been lawfully registered with the Department of Lands. Upon the purchase or the ownership transfer of a condominium unit or a home, the owner of the property also becomes a co-owner within a residential compound, and accepts the responsibility of abiding by the juristic entity’s regulations.

To maintain your property in the long term, payment of the common expense should not be neglected. The juristic entity will use this expense to administer the residential project efficiently to benefit the co-owners.

Plus Property, the full-service professional property and facility management agency, manages both residential and commercial properties via its team of quality personnel whose experience spans more than 20 years, and is able to cater to all types of demands. For information on our property project management service, call 02 688 7555, or click here to get additional information about the services we offer.