Procedures for compulsory transfer of maintenance funds for common areas of condominium buildings from the investor’s joint account

The procedure for compulsory transfer of maintenance funds for the common areas of a condominium from the investor’s joint account is a legal mechanism designed to safeguard the rights of apartment owners when the developer (the “Investor”) fails to transfer or delays in transferring the required maintenance fund. This enforcement mechanism establishes a clear legal process under which the People’s Committee is responsible for coordinating with credit institutions to recover the maintenance funds. The article below by TNTP provides an overview of the compulsory transfer process as prescribed under current law.

1.Common areas of a condominium under Vietnamese Law

The ownership of a condominium is divided into private areas and common areas shared by all apartment owners (“Owners”). According to Clause 2, Article 142 of the Housing Law 2023, common areas of a condominium include:

• All areas other than those designated as privately owned under Clause 1, Article 142 of the Housing Law 2023, along with the community room.
• Spaces and structural components used in common within the condominium, including: frames, columns, load-bearing walls, exterior walls, partition walls between apartments, floors, roofs, terraces, corridors, stairways, elevators, emergency exits, refuse chutes, technical boxes and their enclosing structures (if any), common systems for electricity, water, gas, telecommunications, audio, television, drainage, septic tanks, lightning protection, fire prevention and firefighting, and other areas not designated as private property of the Owners;
• External technical infrastructure connected to the building, except infrastructure designated for public use or required to be transferred to the State or assigned to the Investor for management under the approved project;
• Public facilities within the condominium complex that are not built for business purposes or required to be transferred to the State under the approved project, including common courtyards, gardens, parks, and other works defined in the approved project.

The maintenance fund for common areas is collected as 2% of the apartment value, including sold, lease-purchased areas, and the area retained by the Investor, as prescribed under Article 152 of the Housing Law 2023. Once the Management Board of the condominium (“Management Board”) is established, the maintenance funds and accrued interest under the Investor’s management must be fully transferred to the Management Board for administration and use.

Thus, the condominium maintenance fund is a financial reserve contributed by apartment owners for repairing and maintaining the common areas of the building. This fund is sourced from 2% of the apartment value, including sold, lease-purchased areas and areas retained by the Investor.

2.Cases where compulsory transfer of maintenance funds applies

Compulsory transfer is applied when the Investor fails to voluntarily transfer the funds within the statutory deadline under the Housing Law. Article 87 of Decree 95/2024/ND-CP provides three situations in which compulsory transfer of the condominium maintenance fund may be imposed:

• Case 1: Compulsory recovery from the Investor’s joint account:

This applies when both buyers and the Investor deposited maintenance funds into a joint bank account before the Housing Law 2023 took effect. If the Investor fails to transfer the fund after the deadline stipulated in Clause 3, Article 154 of the Housing Law, compulsory enforcement shall be carried out under Article 88 of Decree 95/2024/ND-CP.

• Case 2: Compulsory recovery from the maintenance fund account

This applies when buyers and the Investor deposited maintenance funds into a non-joint account as provided in Clause 1, Article 87. This dedicated maintenance fund account is separately opened under new regulations. If the Investor fails to transfer the fund after the statutory deadline, enforcement will proceed under Article 89 of Decree 95/2024/ND-CP.

• Case 3: Investor fails to deposit or deposits insufficient maintenance funds:

Compulsory recovery applies from either the joint account or the separate account when the Investor has not deposited or has under-deposited the required maintenance fund for apartments and other areas under its obligation. Enforcement in this case is conducted under Articles 90 and 91 of Decree 95/2024/ND-CP through asset attachment and auction.

3.Procedures for compulsory transfer of maintenance funds from the Investor’s joint account

Under Clause 3, Article 12 of Decree 140/2025/ND-CP, the responsibility for enforcing the transfer of maintenance funds for common areas of condominiums currently rests with the commune-level People’s Committee (“Commune People’s Committee”).

According to Article 88 of Decree 95/2024/ND-CP, the procedure is carried out as follows:

Step 1: The Management Board requests the Commune People’s Committee to require the Investor to transfer the fund:

• The Management Board submits a written request to the Commune People’s Committee where the condominium is located, demanding that the Investor transfer the maintenance fund.
• Within 15 days from receipt of the request, the Commune People’s Committee must verify and issue a written request requiring the Investor to transfer the maintenance fund to the Management Board.

If the condominium contains private areas retained by the Investor as prescribed in Clause 4, Article 155 of the Housing Law 2023, the document must clearly specify the amount of maintenance funds payable and the amount the Investor is entitled to retain.

Step 2: The Commune People’s Committee issues an enforcement decision:

• If the Investor still fails to transfer the fund after the above period, the Management Board may request the Commune People’s Committee to issue a compulsory enforcement decision to recover the maintenance fund.
• The Commune People’s Committee issues the enforcement decision and sends it to the Investor, the provincial housing management authority, and the bank where the Investor maintains the joint account.

Step 3: The credit institution transfers the funds to the Management Board’s account

• Within 15 days from receiving the enforcement decision, the credit institution managing the Investor’s joint account must perform verification.
• If the account holds sufficient funds, the entire amount must be transferred to the Management Board’s account for lawful management and use.
• If the account has no funds or insufficient funds, the remaining balance must be transferred, and the credit institution must notify the Commune People’s Committee, which will proceed with enforcement to recover the outstanding amount.
• After transferring the fund, the credit institution must notify the Commune People’s Committee, the Management Board, the provincial housing authority, and the Investor, clearly stating the amount transferred, the transfer date, and the account details.

The compulsory transfer procedure for condominium maintenance funds from the Investor’s joint account is clearly set out under the Housing Law 2023 and Decree 95/2024/ND-CP, providing an effective mechanism to protect apartment owners and ensure transparency in managing the condominium maintenance fund.

This concludes TNTP’s article on “Procedures for compulsory transfer of maintenance funds for common areas of condominium buildings from the Investor’s joint account.” We hope this article is helpful to readers. Should you require further discussion, please feel free to contact TNTP.

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