'This is not a high-end development': More condo residents hit by surge in maintenance fees

SINGAPORE: Disputes over maintenance fees have cropped up at two more condominiums, with residents being charged as much as 65 per cent more than what was initially marketed.

Last month, CNA reported that Dairy Farm Residences owners were hit with maintenance fees that were more than double the amount they expected to pay. Following complaints from residents, the developer cut the fees by about 40 per cent. 

Residents of Parc Komo at Upper Changi Road North contacted CNA about a similar rise in their fees. The freehold mixed-use development has 276 residential units and was completed in June.

Maintenance fees – which go towards the estate's upkeep and amenities as well as one-off costs such as repainting and lift replacement – are paid by all condo owners, and are typically higher at projects located in prime districts or for larger units within the same development.

At Parc Komo, the fees were initially marketed at between S$327 (US$246) for a one-bedroom unit and S$522 a month for a five-bedroom home.

But when residents received their Temporary Occupation Permit (TOP) letters from developer CEL Development, the maintenance fees they had to pay were up to 65 per cent higher.

One resident in his 40s had bought a two-bedroom unit for which the estimated monthly fee was S$392. However, he ended up paying S$646. 

“For a two-room (unit), to pay such a high maintenance is like buying a luxury condo,” said the resident, who did not want to be named. 

He said residents were told by the developer that the rise was due to inflation. A five to 10 per cent increase would have been expected, he said. “But when you have a more than 60 … per cent increase, it’s a little bit hard to swallow.”

Another resident, who wanted to be known as Ms Tay, bought her three-bedroom unit in 2021. While it is understandable for fees to rise due to inflation, the rise was “higher than expected”. 

The facilities at Parc Komo do not warrant the amount of maintenance fees residents had to pay, she said. 

“I’m paying about S$646. My friends and relatives who have high-end condos in Orchard … maybe they are also paying just slightly more or similar rates,” said Ms Tay, who is also in her 40s. 

“I feel that because this is not really a high-end development … You shouldn’t have this kind of fees.”

DEVELOPER “NOT CANDID” ABOUT FEES

Some Parc Komo residents signed a petition calling for the fees to be reduced, and in October, formed a "working group" with eight representatives for discussions with the developer.  

In late October, the eight residents – who all wanted to remain anonymous – had their first meeting with the developer. 

“However, we were not provided with important documents, such as the existing contracts with current vendors as well as their contract prices," said the group.

“We were also not provided with a breakdown of the services, in particular the scope of services and manpower required to service the estate at the meeting by each vendor.

“We felt that the developer was not candid with us and failed to explain why the maintenance fees were substantially higher than represented except that the budget was submitted and approved by the Building and Construction Authority.” 

The group told CNA that the developer initially suggested in October a reduction in fees of about 12 per cent. 

Residents were told during a subsequent meeting in December that the reduction was because costs from vendors such as security and cleaning firms have decreased since TOP.

“This means that what we were asked to pay as maintenance fees were fees budgeted and prepared by the developer for approval. But in actual fact, expenses paid towards these vendors amounted to less than the budgeted amount,” said the group.

“As paying owners, one cannot help but take issue with this matter. We were neither informed of this nor were we consulted.”

The developer cut its proposed reduction in fees to 9.3 per cent at the December meeting, without explanation.

The group said they have not received confirmation of either proposed cut despite reminders to the developer. CEL Development also did not respond to CNA’s queries on the increase in fees as well as concerns raised by residents.

"UNSUSTAINABLE" FEES: THE ESSENCE RESIDENTS

Residents of the Essence condo also created a petition on Change.org in late November to demand that their maintenance charges be lowered.

The 99-year leasehold project in Yishun has 84 residential units and was completed in June this year. The developer is Chong Kuo Development, a joint venture between local companies OKP Land, Lian Soon Holdings and HSB Development. 

The maintenance fee for a two-bedroom unit at the condo was marketed as S$300 during launch. This has since jumped to more than S$500.

"Our condo maintenance fees have skyrocketed to levels that are not only unexpected but also unsustainable for many of us," said the online petition. 

"This sudden increase in our living costs has left many unprepared and struggling ... The current high maintenance fee is not reflective of the services provided and poses a significant financial burden on residents who were initially promised a different rate."

One resident left a comment on the petition calling the fees "exorbitant" and "disproportionate to the facilities available".

Another resident who identified herself as Chloe Yeo commented that the fees are "too high" and that residents are being asked to pay much more than what they were told when they bought their homes. 

"Please review and lower (the) maintenance fee for us," she wrote. 

According to an update on the petition on Dec 6, the condo's managing agent Chambers International has “finally shared the schedule and job scope of the routine works including cleaning, fogging, and security”. 

But it did not give a breakdown of the costs. 

Responding to queries from CNA, Chong Kuo Development said the marketing of the project began in 2018, before the COVID-19 pandemic. 

“(At) that point, the estimated maintenance costs were well within the prevailing market rates,” it said.

Maintenance costs have since exceeded the estimates from five years ago, a spokesperson said.

The company added that it was aware of the residents' feedback and is working with the managing agent to engage the residents. 

CONDO FEES INFLUENCED BY COMBINATION OF FACTORS

In a statement to CNA, a Building and Construction Authority (BCA) spokesperson noted that the approved maintenance charges for each condominium will vary according to a combination of factors unique to each development.

These include the size of the development, the common facilities provided, the level of service expectations, and the mix and number of units. 

The maintenance fees are approved by the commissioner of buildings after verifying that all cost items budgeted are related to the maintenance and management of the common property within the estate, and are substantiated by documents from the developer. 

“Maintenance charges for new developments may be affected by the current market conditions of the costs for goods and services, as well as supply chain disruptions,” said BCA, giving the example of the Ukraine war.

The authority added that the commissioner of buildings has received three applications for revision from developers in the last five years. 

Some of the reasons cited by the developers are changes to original budgetary assumptions, quotations, and market conditions, BCA said. 

Additionally, unit owners can collectively decide the amount of contribution for the maintenance and management of their development during the first annual general meeting after the condo management has been formed.

The developer will also have to hand over the management control of the estate, including the money in the fund, to the management corporation after the first meeting. 

In response to CNA's queries about Parc Komo and The Essence, BCA said that it has not received any application on the revised fees from the respective developers.