Maintenance Fee

Every owner in a strata development pays into the management fund, usually monthly or quarterly, and this is what most people simply call the maintenance fee. It funds the ongoing running costs of shared property: security guards and access systems, cleaning of common areas, landscaping, pool and gym upkeep, lift servicing contracts, common area utilities such as lighting and water for shared facilities, insurance for the common property, and the managing agent's fees for administering the estate. It does not pay for anything inside your own unit.

The council proposes an annual budget covering these running costs, and the total is split among all owners according to their share value, then billed as a fee per unit, often collected by GIRO. Because it is set by budget rather than by a fixed formula, the fee can and does rise over time as utility costs, labour costs, and insurance premiums increase, or as a building's facilities and systems age and need more frequent servicing.

What commonly surprises owners is how much the fee can vary between developments of similar size, and that a fee on the low side is not automatically a bargain. A very low maintenance fee can mean the estate is being run leanly and well, or it can mean the council has kept fees artificially low while quietly underfunding the sinking fund, storing up a bigger problem for later in the form of a special levy. Owners also sometimes confuse this charge with HDB's Service and Conservancy Charges, which is a separate scheme run by town councils for HDB flats, not an MCST fee, and the two are not directly comparable. Unpaid maintenance fees also accrue interest and can eventually lead to legal action by the MCST, which is a real consideration when buying a resale unit with any arrears history.

Before buying, ask for the current monthly fee, how it has moved over the past few years, and how it compares with similar sized developments nearby, and separately confirm there are no outstanding arrears on the specific unit, since arrears can follow the property rather than the previous owner in some circumstances and should be resolved before completion.

Winfred Quek is an Associate Marketing Consultant at Crestbrick Pte Ltd (CEA Licence No. L31010886H). CEA R073319H. This page is for general information only and does not constitute financial, investment, or legal advice. Verify current figures with IRAS, HDB, CPF Board, or MAS before making any decision.