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What Is the Condominium Common Fee and Is It Necessary to Pay?
21 āļĄāļī.āļĒ. 2023
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PLUS+ would like to introduce everyone to the subtleties of the common fee at condominiums. Weâd also like to discuss what would happen if this fee does not exist, the calculation involved for the fee and the question of whether this fee needs to be paid if a co-owner buys the property for speculation and leaves the condo unit unused.
Many people are aware that an ownership transfer fee is applicable when purchasing a condominium unit. Some may be unaware that owning a condo room involves a long-term expense in the form of the common fee. This fee arises some time after the property is purchased and the owner has moved in.
PLUS wants to take this opportunity to introduce everybody to the common fee, or common expense, and discuss potential consequences of the fee not being collected. Weâd also like to discuss the calculation involved in determining the fee for each condo unit and tackle the question of whether an owner needs to pay the fee if the property is left unused.
What is the condominium common fee?
The condominium common fee is the fee charged onto co-owners every year by the condo juristic person, for the purpose of paying for the administration and caretaking of common areas at the condominium, which are shared among all co-owners.
Said areas include the swimming pool, the fitness room and parking spaces, while the common fee is also used to settle common utility bills, cleaning expenses for the building interior and exterior, the housekeeping expense, the security guards service fee, and the maintenance and repair of amenities.
The fee helps foster safety, cleanliness, convenience and a good environment for the residents at a condo project. It also ensures that buildings and all spaces are adequately maintained and protected against major damage.
The collection of the common fee is necessary at freehold condo properties. Condo projects with more spacious common areas and more numerous amenities will incur a higher common fee. Shortfalls in or an absence of common fee collection at condominiums will result in the common areas being undermaintained, damages, and dilapidated amenities.
These consequences cannot be avoided when there is no budget available for upkeep. Shortfalls in common fee collection means the properties at a condo project will depreciate in value or fetch a lower rent in the future.
Security systems, regardless of whether they are for the indoors or outdoors area at a condo, are one aspect of the juristic personâs work. Without the common fee, there will be lapses in security.
How is the condo common fee calculated?
As we mentioned earlier, the common fee at a condo is proportional to the amount of common space and amenities. The higher the latter, the larger the common fee will be. High-end condos that offer world-class services inevitably collect substantial common fees because of greater upkeep costs.
High-rise condo projects with greater concentrations of property units generally produce a lower common fee for owners because the common areas are being shared among a greater number of units.
Aside from the influential factor of the common area being divided by the number of units, the common fee for each unit is determined by the total area of the unit, resulting in the common fee differing from unit to unit. With the way the juristic person calculates the common fee for each property at a condo, larger units will pay higher common fees. The method of calculation is as follows:
Example of common fee calculation
Common fee rate of 35 baht/square metre/month imposed on a 30-square metre property means 1,050 baht needs to be paid each month.
If the common fee is collected annually, this would mean 12,600 baht/year needs to be paid.
Some condo juristic persons collect the common fee 1-3 years in advance upon property purchase. Once the advance payment is used up, a co-owner will then pay the common fee normally. The common fee may be revised in response to the inflation rate or any expense increases.
The juristic person, or condo management, is required to inform co-owners of additional expenses beforehand. Meanwhile, the common fee for properties at housing estates is usually higher than that for condominiums.
Is it necessary to pay if the condo unit is not used and the owner only bought it for speculation?
Some co-owners who purchased the condo only for speculation or investment and never uses the common amenities or the condo room itself may wonder whether they are required to pay the common fee. PLUS would like to clarify that all property owners are required to pay the common fee regardless of the fact that they might not use the common amenities at all.
This requirement is specified within the condo purchasing contract, which states that co-owners have the responsibility of paying the common fee. Agreeing to the property purchase contract means the buyer agreed to take responsibility over this expense.
The condo juristic person has the power to carry out legal proceedings to force property owners who lag on common fee payment to pay up or pay the applicable fines â which may include interest â for missing payments. Co-owners who have missed common fee payments may have their voting rights at co-owner meetings revoked.
They also will not be able to transfer ownership of the property to someone else until they pay the outstanding common fee and interests in full and receive a debt-free certificate from the juristic person.
Lastly, PLUS would like to stress that the common fee has immense importance for a condoâs upkeep and the managementâs efforts to keep the condominium looking new. If the juristic person management is able to manage its work and expenses transparently, condo residents will receive the convenience, safety and good services that they deserve.
At the same time, those who are interested in buying a condo should assess whether they are able to take responsibility over the common fee in the long term and should set aside an amount of funds to pay the common fee before they make the purchase.
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