Thinking of buying a condo unit? Don’t miss these crucial insights! Learn how recurring maintenance fees can impact your investment.
Whether you’re buying a condo as an investment, for speculation or letting, did you know that before buying a condo, there’s a slew of expenses like a common area maintenance fee (maintenance or common fee for short) that come with condo ownership?
Maintenance fees vary considerably from development to development and from unit to unit. So, Plus Property is pleased to highlight the factors that determine maintenance fees. There are many other facts that need to be considered before purchasing a condo unit.
What factors make a maintenance fee low or high?
The maintenance fee is a recurring expense that the juristic person of a condominium collects from all condo unit owners. The property management fund created from these maintenance charges covers the costs of operating and managing the condo’s common property and amenities that all residents jointly use.
These include such things as the entrance, lobby, swimming pools, gym, parking, cleaning, security systems, and payroll of management and security staff. This property management fund also pays for the common area utility costs and finances periodic engineering maintenance, repairs, and improvements.
How a maintenance fee is calculated depends on different factors:
Photo from The Monument Sanampao CD154237
1. The size of the unit’s usable space
The size of the condo unit’s usable space is the main determining factor. Homeowners at a housing development have higher expenses to meet than those at a condominium because a house has greater usable space.
It goes without saying that the maintenance fee of a one-bedroom condo unit is lower than that of a two-bedroom condo unit. This is because the fee is calculated on the basis of the size of usable space.
2. The condominium’s number of units
When it comes to the number of condo units, many might think that a low-rise development pays a lower maintenance fee than a high-rise project because it has a smaller common area and requires less complicated maintenance compared to a high-rise condo.
But in reality, a high-rise development has more units, which means that the maintenance fee is considerably shared by more owners. As a result, you pay a higher maintenance charge at a low-rise development. However, a low-rise condo offers more privacy because of fewer residents.
3. Facilities
The facilities are the biggest draws of particularly luxury condominium projects with their trendsetting elegant designs and décor. These amenities also have outstanding and unique features and functions. Some property developments are adorned with wonderful works of art or feature designs by famous artists.
Other developments make use of the most modern technologies to provide greater convenience to residents and their everyday life. These factors contribute to the different levels of maintenance fees.
Maintenance fees for most luxury condominiums average as follows:
- Luxury condos: Bt55-95 / Sq.m.
- Super-luxury condos: Bt60-100 / Sq.m.
- Ultra-luxury condos: Bt95-150 / Sq.m.
Moreover, maintenance fees are susceptible to the rate of inflation and adjusted according to the higher utility costs.
4. Juristic Persons
A condominium juristic person is the entity that is in charge of the day-to-day management and care of all common facilities of a condominium. If the condominium juristic person has the expertise in property management and maintenance, the common amenities are likely to be in good condition and ready for use.
The condominium juristic person is also engaged in regulation-making and maintaining order for the benefit of the whole community. This results in the condo remaining in good shape and appreciating in its value.
Juristic persons that specialize in, or have high standards of, operation, tend to be highly experienced in managing and taking care of common area amenities with great efficiency.
The interesting facts about buying a condo unit
Apart from the key factors determining how low or high maintenance fees go, there are many other interesting facts about buying a condo unit.
1. Condo expenses
Aside from budgeting for a condo purchase, there are other miscellaneous costs that need to be managed. These include the ownership transfer fee, stamp duty, land tax, and maintenance charges, which are certain to emerge later.
In the first year or the first two years of ownership, condos tend to waive the maintenance fee. After that, the juristic person will issue written notice for a yearly payment. So, you’d better budget carefully for this recurring cost.
2. The purpose of the condo purchase
Whether or not you’re buying a condo for yourself or planning to move in in the future or purchasing one for letting, you need to pay the maintenance fee even though you have no plans to move in anytime soon. You can’t refuse to pay.
If you have fallen behind payments beyond a specified period, the juristic person won’t be able to issue a debt-free certificate for you. As a result, you won’t be able to sell your unit without this certificate.
3. Refusing to pay the maintenance fee
Whatever the goal of your condo purchase, you’re responsible for the maintenance fee as the fee is clearly laid out in section 18 of Thailand’s Condominium Act (1979) that stipulates that the fee is considered debt sanctioned by law. So, if you fail to pay the fee, the juristic person will suspend some of your rights and take legal action against the debtor.
Finally, many of you will have realized what factors contribute to low or high maintenance fees. Anyone wishing to buy a condo as an investment or for letting but still worrying about finding a tenant, Plus Property has a brokerage service that will assist you in finding a tenant for your condo unit and taking care of all documentation.
Related Article
- How important is a juristic person committee to management of a condominium and housing estate?
- A behind-the-scenes look at PLUS Property’s approach to multifaceted quality control
- Condo Buying Guide: What You Must Know About Maintenance Fees
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Property Management, Facility Management, Bangkok Condo For rent, Condo Juristic Person