How to divide Common and Private Areas in Apartment Projects

The definition of Common and Private ownership in apartment projects is often overlooked. Understanding the laws related to these terms can help owners/users avoid legal issues with Developers and protect their rights. For example, under the 2014 Housing Law, apartment owners are responsible for their privately-owned space maintenance and contributing funds for the common area maintenance. 

This is particularly essential as apartments have become the majority housing choice in large cities. Ha Noi urbanisation rate is expected to reach 62% by 2025 and 75% by 2030, according to Savills Vietnam Q1/2023 Quarterly Market Report. In 2023, the city supply will come from 9 new projects and 2 existing ones.

What are the differences between Common and Private areas in apartment projects? 

In an apartment project, each owner has the right to private ownership of their legally owned unit and common ownership of public areas. Common and Private ownership in apartment projects is regulated under Articles 15 and 16, Article 3 of the 2014 Housing Law: 

• Private area is located inside the apartment or inside other areas of the apartment project that is recognised as the owner’s private property. This area includes equipment used in the apartment or other parts inside.  

• Common area is the remaining part of the apartment that is not included in the owner’ private ownership and the project's shared facilities. These joint assets cannot be divided among the owners. 

Disputes regarding Common and Private ownership in the apartment projects 

Recently, many apartment projects in Ha Noi have encountered issues involved with Common and Private ownership. However, some remain unresolved due to the complexity in the content of laws, regulations, documents or when and who are promulgated. Failure to handle these issues promptly can lead to conflicts between the Developers and the owners/users. 

The main conflict arises from the fact that the parties have not come to an agreement on the ratio of the Common and Private area division or the ownership of specific areas. Tensions between the Developers and the owners/users lead to the delayed operations of the projects, or insufficient services or utilities.

How are Common and Private areas divided according to Vietnamese laws? 

During the construction process, the demarcation of Common and Private ownership is based on the contract between both parties and the provisions of the 2014 Housing Law. Particularly as follows:

1. Regulations of Private ownership in the apartment projects 

a. Private ownership of the apartment projects includes: 

• The area inside the apartment including the balcony and the loggia attached to the apartment. 

• Other areas inside the apartment recognised as the private property of the owner. 

• System of technical equipment for private use attached to the apartment or other areas in the project. 

b. Rights and responsibilities of apartment owners regarding Private ownership 

• The owner has the right to own and use the private area as regulated by the Housing Law and Circular No. 02/2016/TT-BXD. 

• The owner is responsible for maintaining the private property and compensating for any damage caused to other owners due to improper or lacked maintenance. 

• The owner must restore the original condition and compensate for any damage caused to the common or the private areas of other owners. 

2. Regulations of Common ownership in the apartment project 

a. Common ownership of the apartment project includes: 

• The remaining area of the apartment project outside the Private areas. 

• Bearing space and structure and shared technical equipment used in the project. 

• Technical infrastructure systems located outside but connected to the project, excluding those used for public purposes. 

• Public facilities within the apartment project that are not considered an investment for commercial purposes by the Developer or must be handed over to the Government. 

In addition, Clause 1, Article 101 of the 2014 Housing Law stipulates:  

• Any parking area for bicycles, vehicles for the disabled, two or three-wheel vehicles is Common area and shared among owners.  

• The car parking areas belong to apartment owners who buy or rent it. If not, the Developer will manage these areas and is not allowed to include this cost in the selling or renting prices or investment cost for construction. 

b. Rights and responsibilities of apartment owners regarding Common ownership 

• Apartment owners are allowed to use the common areas according to the 2014 Housing law and Circular No. 02/2016/TT-BXD. 

• If the apartment or other areas under Private ownership is damaged, its owner or user is entitled to repair or replace it but must not damage the Common areas and affect other owners. 

• To maintain the project's quality and safety, apartment owners are responsible for contributing to the cost of Common area maintenance. 

What should Developers be noticed about the Common and Private area division? 

Although these areas have been demarcated in legal documents, there will be arising issues between Developers and apartment owners during operations. Controversies often stem from the lack of transparency in the document regulating the Common or Private use of the areas according to the Developer’s design, which leads to ambiguity in determining ownership and use rights in these areas.  

To resolve conflicts and limit their impact on later stages, the Developer needs to anticipate and properly determine the Common and Private areas from the design stage, as well as clearly presents them in technical reports. These reports must be provided to the Building Owners’ Committee (BOC), who represents apartment owners, for them to identify common and private areas and resolve disputes more efficiently. 

The Developer must also come to an agreement with relevant parties on common area and facility rules, thereby agreeing on the contents related to the rights, use and protection of assets to avoid disputes and solve arising problems. The rules of common use should also be made transparent and open to the public and be followed by all owners. 

The design, allocation, and management of Common and Private areas remain a complex and challenging issue, requiring the Developer to have expertise in many fields such as legal, architecture, construction, engineering, project and asset management. In particular, the Developer needs practical experience in operations and flexibility in dealing with arising issues.  

Savills is currently the leading Real Estate Consulting and Management service provider in Viet Nam, with over 27 years of experience in the market and a team of experts in various fields. Our services include Common and Private Area Division Consultancy to help Developers have a wide view, thereby offering solutions of Common and Private area division according to current regulations to reduce risks, maximise profitability and optimise long-term operations. 

Learn more about our Property Management Consulting services.