Protocol for condo raising management fees?

[dcnx]

We just had a 10 baht per meter hike on one of our units without notice. What’s the usual protocol for a condo to raise the price, is it only voted on my the condo board? We received no notification other than there is a new price due at the end of this month. 

 

Thanks.

[ballbreaker]

Any increase in the maintenance fee (baht per sqm) must be approved by the owners at AGM.  It cannot be raised by management company or condo committee without vote of owners.

[cheeryble]

Agree with Ballbreaker.......with the caveat that special assessments for specific and usually urgent projects (e.g. major lift repairs) may be asked for. I've never looked up the statute on these, but if youre merely being asked for a rise BB's right it's invalid in law.

 

Out of interest what age/condition of the building are you in, and what are the fees so far?

What is the %age of Thai/farang.....as this can affect the ability to get a vote for an appropriate fee.....though not necessarily, i know of at least one building where a Thai has led the charge for improvements and the (older) building is being completely transformed and everyone is in agreement and helping pay direct rather than via regular fees. 

 

I ask because i think there's a real discussion to be had about fees.

Seems to me, especially with new buildings, the fees are very  high at 35-45bt/sqm. or more. Or am i not counting some major repairs  like the pool etc etc?. As these buildings are newish one can only assume they require less maintenance so are either being wasteful, or building up a fund for routine major projects (a good idea within limits if the fund is not being OVERfunded......personally i prefer special assessments as restricting ease of spending money and not keeping funds dead in the water, but i can see many owners want regularity). One hesitates to suggest that a developer of a new project who controls the board in the early stages is placing the fees so high because if he doesn't fill the building from day one he'll be on the hook for fees for units that haven't yet filled.

On the other hand some older buildings have simply too low fees and occasionally find it hard to get a vote to raise fees even when a rise is necessary for the wellbeing of the building.

There's a happy middle ground on some older buildings where.....with the building full and all paying fees with the help of the amended condo law a few years ago and the building usually being in a prime position.....a half decent committee doing what needs doing to keep the building sound and desirable .....the biggest bang for the buck is gained from every baht of fees taken.

 

It's a sure fact that a building which is over-coffered will find a way to spend it.....so where's the correct amount, because it must be similar with modest variation across the board?

 

I think it's worthwhile to be specific here about fees, but would be interested in the OPs fees as an opener and cos i need a cup of tea.

 

 

 

Edited December 9, 2017 by cheeryble

[huawei]

You needs 51% of all co- owners, not 51% of an agm.

 

look at your rules and regulations booklet also.

 

no committee should raise funds with justification of what those additional funds are to be used for..and should be audited accordingly.

 

if the operational costs of the condo are in excess of CAM fees, then you need to approve an increase for economic reasons..and should be on the agenda at the meeting.

 

if a committee did that to me. I would simply pay the old rate and ask them to justify the increase before paying that. That is perfectly in your rights to do.

[newnative]

33 minutes ago, huawei said:

You needs 51% of all co- owners, not 51% of an agm.

 

look at your rules and regulations booklet also.

 

no committee should raise funds with justification of what those additional funds are to be used for..and should be audited accordingly.

 

if the operational costs of the condo are in excess of CAM fees, then you need to approve an increase for economic reasons..and should be on the agenda at the meeting.

 

if a committee did that to me. I would simply pay the old rate and ask them to justify the increase before paying that. That is perfectly in your rights to do.

    I'm not sure your information is correct.  I say this because I just attended an annual general meeting today as a proxy holder for a condominium in Cosy Beach.  This condo had an Extraordinary General Meeting earlier this year.  At that meeting, the condo fees were raised.  The condo meeting Minutes gave a breakdown of the vote.  Votes available: 22,745, representing 100% of condo ownership.  (I assume each condo unit gets a certain number of votes--there are actually only around 450 condo units.) Votes registered at the meeting: 8,717.  (38.33%)  Votes required to pass the resolution to raise the condo fees:  7,581 (33.33%)  Votes for the resolution: 8,260 (36.32%). 

     So, out of 22,745 available votes, only 7,581 were needed to pass the resolution on raising fees.  I'm no math wiz but it seems the resolution was passed with far less than 51% of the owners agreeing to the raise in fees.  Perhaps because this was an Extraordinary General Meetings the rules are different? 

[meinphuket]

27 minutes ago, newnative said:

    I'm not sure your information is correct.  I say this because I just attended an annual general meeting today as a proxy holder for a condominium in Cosy Beach.  This condo had an Extraordinary General Meeting earlier this year.  At that meeting, the condo fees were raised.  The condo meeting Minutes gave a breakdown of the vote.  Votes available: 22,745, representing 100% of condo ownership.  (I assume each condo unit gets a certain number of votes--there are actually only around 450 condo units.) Votes registered at the meeting: 8,717.  (38.33%)  Votes required to pass the resolution to raise the condo fees:  7,581 (33.33%)  Votes for the resolution: 8,260 (36.32%). 

     So, out of 22,745 available votes, only 7,581 were needed to pass the resolution on raising fees.  I'm no math wiz but it seems the resolution was passed with far less than 51% of the owners agreeing to the raise in fees.  Perhaps because this was an Extraordinary General Meetings the rules are different? 

Correct, the treshold to pass resolutions is lower at EGMs should the treshold fail at AGMs.

[anfh]

The threshold is 51% at the AGM ( that is 51% of the sq meterage of the entire block, each owner has a vote representing the sq meterage of his condo,  hence as above 8717 votes etc)

However, if 51% is not reached either way, then an EGM can be called within 14 days of the AGM, at this meeting only 33% is required to carry the vote either way. 

 

I am am not sure if the vote for MF rose can be done at an EGM without first calling the AGM. 

 

 

 

 

[cheeryble]

Yes as anth says one third ok only on a second meeting in 14 Days.......but I’m not sure it’s not only valid if a quorum is not reached first time?

51% is normally very difficult to raise, though I have seen it, and even 33% needs a concerted effort to publicize that it’s an important matter.

[Delight]

Just now, cheeryble said:

Yes as anth says one third ok only on a second meeting in 14 Days.......but I’m not sure it’s not only valid if a quorum is not reached first time?

51% is normally very difficult to raise, though I have seen it, and even 33% needs a concerted effort to publicize that it’s an important matter.

 The 2nd meeting can only be called -15 days after the 1st meeting - if less than 50% of the total vote attends this 1st meeting

 

So if 51% attend  the 1st meeting  and the motion is not passed -then a 2nd meeting is not allowed

[newnative]

56 minutes ago, meinphuket said:

Correct, the treshold to pass resolutions is lower at EGMs should the treshold fail at AGMs.

Good to know.  Thanks!

[Delight]

53 minutes ago, newnative said:

Good to know.  Thanks!

  AGM'S and EGM's  are both general meetings and the same rules apply to both

 

Lower thresholds only apply at 2nd meetings. 2nd meetings are not EGM's

 

Suspect that the mechanism-to raise fees - at the Cosy Beech condo - was a 'Special Assessment'

This device has a limited life -typically 3 years. After that it has to be re agreed

[newnative]

18 minutes ago, Delight said:

  AGM'S and EGM's  are both general meetings and the same rules apply to both

 

Lower thresholds only apply at 2nd meetings. 2nd meetings are not EGM's

 

Suspect that the mechanism-to raise fees - at the Cosy Beech condo - was a 'Special Assessment'

This device has a limited life -typically 3 years. After that it has to be re agreed

   The meeting booklets we were given containing the agenda and the Minutes of past meetings to approve, budget, etc., specifically called the earlier meeting an Extraordinary General Meeting.  At the EGM the condo fees were raised by 10 baht a sqm beginning August 2017 and for the next ten years the fees will go up by 1 baht each year; so, not really a 'limited life'.

[masuk]

Possibly the question arose as due to lack of information.  As a Condo renter (but do not own) we are totally in the dark as to the Mangement's resolutions and decisions.  Therefore an advice of rental increase would come as a surprise, if the condo owner or management do not communicate with the 49% of renters (non-owners).

[cheeryble]

Hi dcnx, would you care to let me know the fees and age of the building?

There;s such wide range of fees and I think it's in everyone's interest to know what is enough to do the job properly but with no waste.

Thanks.

 

ps guessing you in CM?

[Delight]

19 hours ago, newnative said:

   The meeting booklets we were given containing the agenda and the Minutes of past meetings to approve, budget, etc., specifically called the earlier meeting an Extraordinary General Meeting.  At the EGM the condo fees were raised by 10 baht a sqm beginning August 2017 and for the next ten years the fees will go up by 1 baht each year; so, not really a 'limited life'.

 The meeting that you refer to   was a 2nd meeting -therefore lower thresholds apply.

 

Interesting idea that the resolution details committments for  the next 10 years

 

That  is new in my experience

 

[Delight]

 You refer to a 10 Baht/m Fee rise

 

newnative is also referring to a recent fee rise of 10Baht/m

 

Are these buildings somehow connected?

 

If they are one in the same -then the asnwer to your post is detailed in one of the newnative contributions

[newnative]

41 minutes ago, Delight said:

 The meeting that you refer to   was a 2nd meeting -therefore lower thresholds apply.

 

Interesting idea that the resolution details committments for  the next 10 years

 

That  is new in my experience

 

New for me, too.  Perhaps it was a strategy to get the raise in fees approved, which is sometimes difficult to do.

[dcnx]

On 12/10/2017 at 12:51 AM, cheeryble said:

Hi dcnx, would you care to let me know the fees and age of the building?

There;s such wide range of fees and I think it's in everyone's interest to know what is enough to do the job properly but with no waste.

Thanks.

 

ps guessing you in CM?

Yes, Chiang Mai.

 

The building is 2 years old, coming up on 3 soon. The old fee was already high at 45b per sm, now it’s 55b starting Jan 2018. The location is within the Nimman area.

 

We have a few units around town and haven’t had to deal with this yet.

 

Thanks everyone.

[cheeryble]

40 minutes ago, dcnx said:

Yes, Chiang Mai.

 

The building is 2 years old, coming up on 3 soon. The old fee was already high at 45b per sm, now it’s 55b starting Jan 2018. The location is within the Nimman area.

 

We have a few units around town and haven’t had to deal with this yet.

 

Thanks everyone.

Those fees are scary dcnx.

You said earlier you had no notice of a meeting about fees I think. No letter, no email, no notice in the condo, no proxy forms.

Unlikely but mistakes can happen.

If this is so things were not run properly and if you really wanted you could do something about it.

I would consider a check with the cardiologist if fees were 45 bt., let alone 55 bt,

[dcnx]

1 hour ago, cheeryble said:

Those fees are scary dcnx.

You said earlier you had no notice of a meeting about fees I think. No letter, no email, no notice in the condo, no proxy forms.

Unlikely but mistakes can happen.

If this is so things were not run properly and if you really wanted you could do something about it.

I would consider a check with the cardiologist if fees were 45 bt., let alone 55 bt,

We were shocked as well. 45b was higher than we wanted, our others are 40b, and we did almost have a heart attack when they told us 55b. We still have to meet with them and I already told them I want to see all of the paperwork and expenses to justify to the increase, so fingers crossed.

 

And you are correct, they did not give us notice on the price increase or the vote / meeting to discuss it.

[newnative]

6 hours ago, dcnx said:

We were shocked as well. 45b was higher than we wanted, our others are 40b, and we did almost have a heart attack when they told us 55b. We still have to meet with them and I already told them I want to see all of the paperwork and expenses to justify to the increase, so fingers crossed.

 

And you are correct, they did not give us notice on the price increase or the vote / meeting to discuss it.

     This probably isn't  the case with your condo but some new condos right from the start have a condo increase in place by the developer.  My current condo is about a year or so old and we knew from the start when we bought that next year the fees will automatically go up.  We will then be paying what we probably should have been paying from the start but the developer likely thought a smaller fee would look better while doing the majority of the selling--perhaps hoping the buyers wouldn't notice the automatic fee raise.

      Pattaya fees seem to be all over the board but the new or newer projects seem to be in the 40-50 baht price range.   I've lived or owned in about 9 different condo projects and my observation is that I don't see a big difference in service whether the fees are high or low.  But, a higher fee will, hopefully, provide money to keep the project maintained.  Whatever the fee I am paying, I know it is a total bargain compared to the fees in the US. 

   

[cheeryble]

2 hours ago, newnative said:

   I've lived or owned in about 9 different condo projects and my observation is that I don't see a big difference in service whether the fees are high or low. 

I think what you said in the sentence i quote is bang on the button, had thought this myself.

The maintenance is basically the same for any building.

I own in a building which has not only very low fees but by being smart and careful has done some serious renovations with a subsequent rise in popularity and thus prices.

A lot of this was helped by gradually gathering in unpaid fees, having unpaid owner JPs, and also some income from handling rentals, cleaning and repair service etc.

I don't know why more than one person's necessary in the office (if it''s not a large condo)......there;s not much work for one.......and guards enjoy doing a bit of gardening and they keep the outside clean. None of the staff are overworked quite the opposite.

My opinion is a building can run on 20 baht per sqm with the proviso a special assessment MAY be callable (hasn't happened for a long time.) A large sinking fund has a funny way of getting spent, not necessarily wisely.

The building MUST be properly maintained and standards kept up, but there is a RIGHT price.

 

Edited December 14, 2017 by cheeryble

[Delight]

1 hour ago, cheeryble said:

I think what you said in the sentence i quote is bang on the button, had thought this myself.

The maintenance is basically the same for any building.

I own in a building which has not only very low fees but by being smart and careful has done some serious renovations with a subsequent rise in popularity and thus prices.

A lot of this was helped by gradually gathering in unpaid fees, having unpaid owner JPs, and also some income from handling rentals, cleaning and repair service etc.

I don't know why more than one person's necessary in the office (if it''s not a large condo)......there;s not much work for one.......and guards enjoy doing a bit of gardening and they keep the outside clean. None of the staff are overworked quite the opposite.

My opinion is a building can run on 20 baht per sqm with the proviso a special assessment MAY be callable (hasn't happened for a long time.) A large sinking fund has a funny way of getting spent, not necessarily wisely.

The building MUST be properly maintained and standards kept up, but there is a RIGHT price.

 

  Two years ago I analysed the costs of my building. Just a private exercise

The figures are expenditure per meter per month

Then it was about 42 Baht per meter per month

 

 

Difficult to see how it can be trimmed to 20 Baht per meter per month

 

The figures are:

 

SALARY			5.2
INSURANCE			1.91
MANAGEMENT COMPANY			13.67
SECURITY			6.83
ELEVATOR			0.34
BIG CLEAN			0.45
PEST			0.25
POOL			1
GARDEN			1.5
AUDIT			0.23
WATER COMMON AREA			0.22
ELECTRICITY COMMON AREA			1.3
PHONE MOBILE			0.45
OPERATIONAL			1.71
MAINTENANCE MATERIALS			4.37
	SPECIAL EXPENSES		2.39
TOTAL SPENDING			41.82
3658 CHARGABLE METERS

[cheeryble]

45 minutes ago, Delight said:

 

TOTAL SPENDING			41.82

Very interesting Delight. If I get the chance to look at the figures I'll compare.

 

A couple of things do stand out.

One is the Management Fee is a whopping 32.66% of your outlay.

That's well over 50,000pm.....seems well over the top. A reasonably paid manager and a part time JP coming in two mornings a week for an hour or two could drastically reduce this and even in a small building you could be down to 35 baht/sqm/month.

Presume this includes a full time building manager? Are there any other office staff (i.e. too many)? Does the 5.2baht only count for the guard cleaner and handyman......and are some of them part time as it's a small building? (I see the "salaries" only come to about 20,000pm total........thats very little......how do you manage that?)

 

Second is at

3658 CHARGABLE METERS

you are in a very small building and losing out on economy of scale.

Our manager in a building several times bigger is certainly not overbusy, but you still have to pay the same (or maybe more) for much less space.

Same goes for handyman, guards etc.

Edited December 14, 2017 by cheeryble

[Delight]

 

10 minutes ago, cheeryble said:

Very interesting Delight. If I get the chance to look at the figures I'll compare.

 

A couple of things do stand out.

One is the Management Fee is a whopping 32.66% of your outlay.

That's well over 50,000pm.....seems well over the top. A reasonably paid manager and a part time JP coming in two mornings a week for an hour or two could drastically reduce this and even in a small building you could be down to 35 baht/sqm/month.

Presume this includes a full time building manager? Are there any other office staff (i.e. too many)? Does the 5.2baht only count for the guard cleaner and handyman......and are some of them part time as it's a small building? (I see the "salaries" only come to about 20,000pm total........thats very little......how do you manage that?)

 

Second is at

3658 CHARGABLE METERS

you are in a very small building and losing out on economy of scale.

Our manager in a building several times bigger is certainly not overbusy, but you still have to pay the same (or maybe more) for much less space.

Same goes for handyman, guards etc.

  The 5.2 is for cleaner gardner and technician. The latter 2 are shared with 2 other buildings

The management company is the major outlay. The notion of employing staff directly is a non starter. That would mean that the committee would have too  much responsibilty. No co -owner would be interested,

We have a full time building manager who physically works part time. Sharing a building manager may be possible.

Add ing some gates to the underground car park and then dispensing with the night security guard is also an a option

The fees are 40 plus 7 sinking fund  -so 47

 

At the AGM's I sense that it is only myself who is interested in becoming more efficient. My motive is all about efficiency -not about reducing cost to me.

No body else cares. We all just pay

 

[newnative]

3 hours ago, cheeryble said:

I think what you said in the sentence i quote is bang on the button, had thought this myself.

The maintenance is basically the same for any building.

I own in a building which has not only very low fees but by being smart and careful has done some serious renovations with a subsequent rise in popularity and thus prices.

A lot of this was helped by gradually gathering in unpaid fees, having unpaid owner JPs, and also some income from handling rentals, cleaning and repair service etc.

I don't know why more than one person's necessary in the office (if it''s not a large condo)......there;s not much work for one.......and guards enjoy doing a bit of gardening and they keep the outside clean. None of the staff are overworked quite the opposite.

My opinion is a building can run on 20 baht per sqm with the proviso a special assessment MAY be callable (hasn't happened for a long time.) A large sinking fund has a funny way of getting spent, not necessarily wisely.

The building MUST be properly maintained and standards kept up, but there is a RIGHT price.

 

    Of the 9 condo projects I mentioned, Lumpini Park Beach Jomtien was probably the best run--and it had a condo fee at the time of exactly your 20 baht a sqm.

[lkn]

On 12/14/2017 at 1:33 PM, Delight said:

Two years ago I analysed the costs of my building

Thanks for sharing, some of your numbers stood out to me:

 

 

• Elevator: 14,925 baht/year. That seems very cheap. Which company services your elevator? And do you know who built the elevator?
• Water common area: 9,657 baht/year. Also very cheap considering you have both a garden and a pool. We use more on our pool alone.
• Mobile phone: 19,753 baht/year. OK, that one is not cheap! Seems like you should look into what plan you have, and how many personal conversations are billed to the building :)
• Security: Is that a daytime + nighttime guard (for 24,984 baht/month)?
• Curious what operational, maintenance materials, and special expenses cover, as they are 372k/year. Possibly some of the elevator expenses are under maintenance materials.

 

[lkn]

On 12/14/2017 at 2:34 PM, Delight said:

  The 5.2 is for cleaner gardner and technician. The latter 2 are shared with 2 other buildings

The management company is the major outlay. The notion of employing staff directly is a non starter. That would mean that the committee would have too  much responsibilty. No co -owner would be interested,

So garden (5,487 baht/month) excludes salary for gardener? So it would be soil, fertilizer, and new vegetation.

 

As for your management company’s 50k/month: I don’t think it’s unreasonable, if they do a good job. What people often forget when they think they can hire a Thai for 300 baht/day is that you do not get qualified people at that price. A (full time) building manager is worth at least 15,000 baht/month, and then add overtime payment, social security, fringe benefits, end-of-year bonus, temporary workers in case of leave, and it will be at least 20,000 baht/month.

 

And even if you are willing to pay that, can you find a good building manager? One that proactively ensures that all the building’s equipment gets proper maintenance? Relying on a company gives a bit of safety, as they (hopefully) have procedures and lots of checklists, so even a subpar building manager will manage the building acceptable, because the company providing them will ensure training, supervising, and be there to help with any problems the building manager may run into.

 

[smutcakes]

1 hour ago, lkn said:

So garden (5,487 baht/month) excludes salary for gardener? So it would be soil, fertilizer, and new vegetation.

 

As for your management company’s 50k/month: I don’t think it’s unreasonable, if they do a good job. What people often forget when they think they can hire a Thai for 300 baht/day is that you do not get qualified people at that price. A (full time) building manager is worth at least 15,000 baht/month, and then add overtime payment, social security, fringe benefits, end-of-year bonus, temporary workers in case of leave, and it will be at least 20,000 baht/month.

 

And even if you are willing to pay that, can you find a good building manager? One that proactively ensures that all the building’s equipment gets proper maintenance? Relying on a company gives a bit of safety, as they (hopefully) have procedures and lots of checklists, so even a subpar building manager will manage the building acceptable, because the company providing them will ensure training, supervising, and be there to help with any problems the building manager may run into.

 

Building Managers in proper management companies will get paid in excess of 40K per month in Pattaya and more in Bangkok. I would not expect much from somebody on 15-20K. That is what security guards from PCS, ISS etc are paid. 

[cheeryble]

If someone's in the office doing the day to day stuff, proportional to a salary like 15k/month, does one really need more than a JP/overmanager who will come in a couple of times per week for a couple of hours for an overview of staff work and sign one or two bits and pieces? Naturally they may be busier once or twice a year for general meetings and occasionally a committee meeting. But surely there are many competent Thais of good reputation who would do this part time. The legal side can be learned in hours.