{"id":41376,"date":"2021-07-01T18:00:04","date_gmt":"2021-07-01T10:00:04","guid":{"rendered":"https:\/\/www.99.co\/singapore\/insider\/?p=41376"},"modified":"2024-11-19T18:34:44","modified_gmt":"2024-11-19T10:34:44","slug":"4-reasons-why-you-shouldnt-default-on-your-condo-maintenance-fees","status":"publish","type":"post","link":"https:\/\/www.99.co\/singapore\/insider\/4-reasons-why-you-shouldnt-default-on-your-condo-maintenance-fees\/","title":{"rendered":"4 reasons why you shouldn\u2019t default on your condo maintenance fees"},"content":{"rendered":"
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With owning a condo, often we pay attention to things like the selling price and how much financing we can get. We compare the facilities that various condos provide, but less often do we look at the maintenance fees. So condo maintenance fees end up becoming one of the hidden costs of owning a condo.<\/p>\n

But it shouldn\u2019t be overlooked. Just like your home loan instalments, you risk losing your condo if you default on your condo maintenance fees.<\/p>\n

\"Person<\/a>
The MCST can put your house up for auction if you default on your maintenance fee.<\/figcaption><\/figure>\n

Before we get on with the consequences of defaulting on your maintenance fees, let us briefly go through what it entails.<\/p>\n

What goes into the condo maintenance fee?\u00a0<\/b><\/h2>\n

Condo maintenance fees are formally referred to as service charge. It is like HDB\u2019s service and conservancy charges (S&CC) in that it\u2019s used to maintain the condo and its facilities.<\/p>\n

The service charge is usually paid every three months to your condo Management Corporation Strata Title (MCST)<\/span><\/a>, which manages your condo.<\/p>\n

A portion of it goes into the condo\u2019s maintenance fund for short-term, day-to-day expenses to keep the facilities in good condition. Another portion of the service charge is for the sinking fund to pay for long-term and large expenditures, such as paint jobs and repairs.<\/p>\n

[Find out more about the condo maintenance fee here<\/span><\/a> as we explain the differences between the maintenance fund and sinking fund.]<\/p>\n

How is the condo maintenance fee determined?\u00a0<\/b><\/h2>\n

Condo maintenance fees differ from condo to condo and depend on various factors. This includes the size of the condo, number of units and facilities. It can range from S$300 to S$500 per month, with the more luxurious condos having a service charge as high as S$1,000 per month.<\/p>\n

For instance, the more facilities your condo has, the higher the amount of money is needed for the maintenance, meaning your service charge will be higher. Like if your condo has a garden at every corner of the development, chances are you\u2019ll need to pay higher maintenance fees. After all, landscaping isn\u2019t cheap.<\/p>\n

Besides these aspects of the condo, how much you pay is determined by your share value.<\/p>\n

Share value<\/b><\/h2>\n

Share value<\/a><\/span> refers to the share of the condo development that you own relative to your neighbours. To put it simply, it\u2019s the proportion of the condo that you own.<\/p>\n

The share value is determined based on the floor area of your unit. So the higher your share value, the higher is your maintenance fee.<\/p>\n\n\n\n\n\n\n\n
Floor area (in square metres)<\/b><\/td>\nShare value<\/b><\/td>\n<\/tr>\n
50 <\/span>\u00a0<\/span>and below<\/span><\/td>\n5<\/span><\/td>\n<\/tr>\n
51<\/span> to 100\u00a0<\/span><\/td>\n6<\/span><\/td>\n<\/tr>\n
101 to 150\u00a0<\/span><\/td>\n7<\/span><\/td>\n<\/tr>\n
151 to 200\u00a0<\/span><\/td>\n8<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Source: BCA<\/p>\n

Never mind if you’re single but own a penthouse. Or that no one in your five-member household ever uses the fancy gym and swimming pools.<\/p>\n

It works on the assumption that if your unit occupies a larger floor area, chances are you have more people in the household using the condo facilities. Hence, the higher service charge.<\/p>\n

Why you shouldn\u2019t default on your condo maintenance fees\u00a0<\/b><\/h2>\n

But even if you don\u2019t use the condo facilities regularly (or don\u2019t even use one at all), you\u2019ll still have to pay the maintenance fee every three months. It\u2019s not just used to ensure that the filtration of the swimming pool works well, but also to keep the common areas clean. More importantly, it funds the costs needed to keep the condo safe.<\/p>\n

It\u2019s also why there are penalties for defaulting on your condo maintenance fee. The last thing we want is a condo management that\u2019s in debt, like the MCST of Parc Oasis<\/span><\/a> that tried to impose parking fees to cover the shortfall in their maintenance fund<\/span><\/a>.<\/p>\n

Here are the penalties for defaulting on your service charge.<\/p>\n

1. You\u2019ll be charged with interest and served with written demand<\/b><\/h2>\n

By right, there\u2019s a grace period of 30 days<\/span><\/a> for the condo service charge. If you don\u2019t pay after the grace period, the MCST can charge you interest and even serve you with a lawyer\u2019s letter to recover the payment.<\/p>\n

Depending on the condo, the interest can be as high as 10% to 15% per annum.<\/p>\n

It\u2019s not actually uncommon for people to miss their service charge payment for a month or two. It\u2019s still best not to default on your condo maintenance fee, as the amount can snowball over time with the interest.<\/p>\n

If you face any difficulties paying for it, it\u2019s best to approach your MSCT to discuss and resolve the issue. This will also prevent the situation from escalating.<\/p>\n

2. You can be fined up to S$10,000
\n<\/b><\/h2>\n

Things can get uglier if your MCST sends you a written demand. If you don\u2019t pay your condo maintenance fee within 14 days of receiving the letter, you can be liable for an offence and be fined up to S$10,000.<\/p>\n

To recover the unpaid service charge, the MCST may take you to the Smalls Claims Tribunals or the courts.<\/p>\n

Or worse, they can sell your house.<\/p>\n

3. The MCST can sell your house
\n<\/b><\/h2>\n

This is the last resort and has happened before for some owners. The MCST can register the unpaid management fees as a charge against your property. Doing so gives them the right to sell your unit after the following:<\/p>\n