Private Property Maintenance Fees Must Be Approved by BCA

Rising maintenance fees for private residential properties have drawn concern recently. Minister for National Development Desmond Lee stated that developers must obtain approval from the Building and Construction Authority (BCA) when setting maintenance charges for new private housing projects.

Mr Lee said this on Tuesday (9 January) in a written parliamentary reply to Member of Parliament Melvin Yong (Radin Mas SMC) regarding questions on private home maintenance fees.

Mr Lee noted that private residential projects in Singapore vary in size, unit mix, types, and facilities, which results in differing maintenance fees for essential services across developments. Developers generally determine charges based on estimated maintenance costs for the new project. They must seek approval from the Commissioner of Buildings before collecting these maintenance fees, which developers typically do prior to handing over the strata units to buyers.

Late last year, the newly completed private residential project Dairy Farm Residences along Dairy Farm Road was embroiled in a dispute over maintenance fees. Before moving in, residents were informed that maintenance charges were double the indicative figures quoted during sales launches. Developer United Engineers later lowered the fees by up to 40%, cutting them from the initial $700-plus to $800-plus down to between $427 and $513.

The developer explained that the previous fees were estimated by consultants before or around the time the project attained its Temporary Occupation Permit (TOP). The fees were revised after securing lower contract prices through tenders for security, cleaning, and managing agent services.

In his written reply, Mr Lee said: "Before approving the maintenance charges, BCA verifies that the fees are related to the maintenance and management of common property within the development, and checks whether the rates are reasonable and supported by quotations from service providers."

Developers of these strata-titled private developments must hand over all management duties, including the management fund, to the Management Corporation Strata Title (MCST) after holding the first Annual General Meeting (AGM). During the AGM, subsidiary proprietors can collectively decide on the required services and review whether fee adjustments are needed.

Maintenance Fees for New Projects Up 40% to 50% on Average from Pre-Pandemic Levels Due to Rising Costs

Market observers pointed out that due to escalating manpower, material, and interest rate costs, maintenance fees for new projects have increased by an average of 40% to 50% compared to pre-pandemic levels. In the current new private home market, maintenance charges for a three-bedroom unit in a luxury project average over $1,000 per month; similar units in city-fringe developments average over $500; while mass-market private condos range between $300 and $400.