| Bangkok condo management costs rising | | | | ensure the safety of all the occupants of the |
| | | | building", said Ms. Chanpen. |
| Many condominium buildings in Bangkok had | | | | |
| their common area management fees set over | | | | In contrast, hotels undergo a major |
| ten years ago when the buildings were first | | | | refurbishment of their public areas at least |
| completed. Not only has the cost of providing | | | | every seven years. |
| standard services risen dramatically but, as | | | | |
| buildings age, the cost of repairs and the | | | | There are many condominiums in Bangkok which |
| need for improvements have also risen | | | | are now more than ten years old and have not |
| significantly. | | | | had significant improvements to the common |
| | | | areas. |
| Ms. Chanpen Thavorncharoenpon, Director of | | | | |
| Asset Services as the CB Richard Eills, looks | | | | This is an issue which is increasingly |
| at the challenges facing condominium | | | | affecting property values. The value of a |
| management committees and condominium | | | | condominium is determined by its location, |
| co-owners. | | | | design and specification. Many older |
| | | | condominiums are 50% of the cost of new |
| Most condominium buildings have two sources | | | | condominiums in a similar area. |
| of funds: firstly, common area management | | | | |
| fees paid by co-owners normally on a monthly | | | | Somkid Gardens, which was completed in 1991, |
| or quarterly basis; and secondly replacement | | | | is one of the few older developments where |
| sinking fund | | | | resale prices have kept pace with new |
| | | | developments in the area. CB Richard Eills |
| The sinking fund should be made up of the | | | | believes this is due to the condominium |
| contributions made by co-owners when owner | | | | management committee spending considerable |
| ship title was transferred by the developer. | | | | money on upgrades to the common area and |
| The fund should be deposited in an interest | | | | co-owners renovating their own units. |
| bearing account and technically should be | | | | |
| used for replacement of capital equipment in | | | | Ms. Chanpen added: "We believe that, even to |
| the building. Common area management fees | | | | maintain minimum necessary standards, |
| were, in many buildings, set when the | | | | condominium owners will have to pay higher |
| building was completed and, since that date, | | | | common area management fees. If co-owners |
| costs have risen considerably. | | | | want to maintain the value and attractiveness |
| | | | of their property they will have spend |
| CB Richard Eills estimates that electricity | | | | additional sums on improvements to the common |
| costs for a condominium, which are one of the | | | | areas." |
| largest single expenses, have risen | | | | |
| significantly. | | | | "Condominium management committees have two |
| | | | choices of raising funds; they can either |
| It is not only the daily operating costs that | | | | raise the common area management fee or ask |
| have risen but, as buildings age, the cost of | | | | co-owners to make a capital contribution to |
| repairs increases as it also becomes | | | | finance the repairs and improvements." |
| necessary to undertake improvements; for | | | | |
| example, the renovation of the main lobby and | | | | The Condominium Act requires agree to an |
| common areas. | | | | increase in common area fees. This is |
| | | | difficult in many cases where less than 75% |
| Some repairs are critical and can not be | | | | of the co-owners attend the annual general |
| delayed. Lift ropes, for example, have a life | | | | meeting. There is a proposal to amend this to |
| span of 10-15 years, after which they need to | | | | a simple majority vote of all co-owners but |
| be replaced. Smoke detectors and lift safety | | | | it remains unclear when this amendment will |
| devices also start to fail about ten years | | | | become law. |
| after installation. CB Richard Eills has | | | | |
| recently completed the full replacement of | | | | Despite the difficulty in getting a 75% vote, |
| the smoke detection and fire alarm systems at | | | | co-owners need to take action because, in |
| several condominium buildings that now are | | | | many cases, expenses will now exceed income, |
| more than ten years old. | | | | resulting in funds from the sinking fund |
| | | | being drawn down to pay for ordinary |
| "We believe that condominium owners can not | | | | operating expenses. |
| compromise on safety issues and need to | | | | |