The 2% Apartment Building Maintenance Fund under the 2023 Housing Law: Who Must Pay, What It Is Used For, and Fund Handover Disputes

The 2% apartment building maintenance fund is one of the most persistent sources of dispute in the operation of apartment buildings in Vietnam. Behind this seemingly simple figure lies a common asset that can reach tens of billions of dong for large projects, giving rise to conflicts over management rights among the developer, the management board and the residents. The 2023 Housing Law (Law No. 27/2023/QH15, effective from 1 August 2024) has inherited and further clarified the provisions on the maintenance fund, with a view to tightening the management and use of the fund for its proper purpose.

This article analyses the legal nature of the maintenance fund under Article 152 and related provisions of the 2023 Housing Law, clarifying who must pay, what the fund may be used for, and the risks that both the developer and the management board need to avoid.

Mục 0101. The nature of the 2% maintenance fund and who must pay it

Under Article 152 of the 2023 Housing Law, for apartments and other areas in an apartment building that the developer sells or leases-to-purchase, the buyer or lessee-purchaser must pay a maintenance fund equal to 2% of the value of the apartment or area sold or leased-to-purchase. This sum is included in the sale or lease-purchase price payable by the buyer and is clearly stated in the contract. The nature of this 2% is a common fund of the building, formed at the very point of sale, set aside for maintaining the common ownership area throughout the building’s life cycle.

A point often overlooked is the developer’s own obligation to contribute. For apartments or areas that the developer retains and does not sell or lease-to-purchase, or has not yet sold or leased-to-purchase as at the time of handover for the building to be put into use, the developer must pay the corresponding 2% maintenance fund for that area. This provision prevents developers from retaining large areas for business while evading their obligation to contribute to the building’s common fund.

Mục 0202. What the maintenance fund may and may not be used for

This is the core issue and also the source of most disputes. The 2023 Housing Law provides that the maintenance fund may only be used to maintain and replace the items and equipment belonging to the common ownership area of the apartment building, in accordance with the maintenance plan approved by the apartment building general meeting. In other words, the fund serves the common ownership area — such as the load-bearing structure, lift system, pumps, fire prevention and fighting system, and common water supply and drainage system — and not the private ownership area of each individual apartment.

Equally important, the law clearly states that the apartment building management board may not use the maintenance fund for the purpose of managing and operating the building, or for any other purpose. This is the key dividing line between two types of cost that are easily confused: the maintenance fund (a one-off 2% fund, used for repairing and replacing the common ownership area) and the management and operation fee (paid periodically each month, used for security, cleaning, lift operation and common lighting). Using the maintenance fund to cover monthly operating costs is a misuse of purpose and one of the most common violations committed by management boards.

Mục 0303. Management and handover of the maintenance fund: where most disputes arise

In the initial phase, the maintenance fund is held provisionally by the developer. After the apartment building general meeting elects a management board, the developer is responsible for handing over the maintenance fund together with all accrued interest to the management board for administration in accordance with the law. Practice shows this to be a flashpoint for disputes: many developers hand over late, hand over a shortfall, or have used part of the fund before handover, leading to prolonged complaints and even the application of coercive recovery measures.

To gauge the scale of the issue with a numerical example: an apartment building of 500 units with an average value of VND 2 billion per unit would generate a maintenance fund of approximately 2% × VND 2 billion × 500 = VND 20 billion. With such a large sum, strict control of the handover process, account statements and accrued interest is extremely important. Residents and the management board should require the developer to provide full documentation of the fund balance, deposit interest and any amounts spent (if any) as at the time of handover, to prevent losses.

Mục 0404. The principle of transparency in using the fund, and a lawyer’s advice

The 2023 Housing Law emphasises the principle of financial transparency: the use of the maintenance fund must be supported by valid invoices and vouchers and must be reported to the apartment building general meeting. This is an internal oversight mechanism to prevent the management board from spending arbitrarily or profiting from the common fund. Every significant expenditure should be tied to an approved maintenance plan and to a transparent process for selecting the repair contractor.

From an advisory standpoint, lawyers usually recommend three things. For the developer: open a separate account for the maintenance fund, account for it separately, and hand it over on time to avoid legal and reputational risk. For the management board: build clear rules on receipts and expenditures, retain vouchers and report periodically to protect itself from allegations of misuse. For residents: participate in the apartment building general meeting and request public disclosure of the maintenance fund’s financial reports, because this is common property that everyone has the right to oversee.

Mục 0505. Frequently asked questions

What should residents do if the developer is late in handing over the maintenance fund?

Where the developer fails to hand over, or hands over an incomplete maintenance fund after the management board is established, the management board and residents may request the competent State authority to intervene, and the law provides for coercive measures to enforce handover of the maintenance fund. Preparing complete records proving the amount to be handed over is the decisive factor in the prospect of recovery.

May the maintenance fund be used to repair a resident’s own private apartment?

No. The maintenance fund may only be used for the common ownership area of the apartment building. Repair and maintenance within the private ownership area of each apartment is the responsibility and at the cost of that apartment’s owner, and may not be drawn from the common maintenance fund.

Mục 0606. The separate account and deposit interest of the maintenance fund

Because the maintenance fund is a large sum held over a long period, the law requires it to be managed separately, deposited in an account at a credit institution and to earn interest as provided. The accrued deposit interest is added to the maintenance fund for common use, and does not belong to the developer or to individual members of the management board. This is an important detail that residents often overlook when exercising oversight: not only the 2% principal but also the interest must be transparently accounted for and fully handed over.

In a handover dispute, accurately determining the principal balance plus interest as at the time of handover is the basis for requiring the developer to transfer the correct and full amount. A newly established management board should request a statement of the maintenance fund account from the first day the fund was formed up to the time of handover, and reconcile it against the list of apartments sold and the area retained by the developer, in order to detect any discrepancy.

Mục 0707. HTIC provides legal support on apartment buildings

HTIC Law Firm advises developers, management boards and residents on managing, handing over and resolving disputes concerning apartment building maintenance funds in accordance with the 2023 Housing Law. See HTIC’s real estate lawyer services.

Fixed quotation per matter/project — Hotline +84 379 044 299.

Need legal advice for your business? The HTIC legal team is ready to accompany Vietnamese enterprises and foreign investors — contact HTIC for a consultation. Hotline: +84 379 044 299.