Q&A: The legality of renewing the Operation Management Contract without the approval of the Condominium Owners' Meeting

Legal situation:

The Management Board of OV Condominium (hereinafter referred to as "OV MB") ends its term on December 31, 2025; however, in November 2025, OV MB signed the 3rd extension of the operation management contract annex with Company S for an additional 01 (one) year. It is known that the Operation Management Contract between OV MB and Company S is signed on a year-to-year basis, and the Condominium Owners' Meeting (hereinafter referred to as "COM") must approve the signing of any extension.

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Answer:

DL PINNACLE LAW FIRM LLC

Thus, is the 3rd extension by OV MB without the approval of the COM in accordance with the law, and if not, what is the legal validity of the contract?

Answer:

The fact that OV MB signed the 3rd extension of the operation management contract annex with Company S without the approval of the COM is not in accordance with legal regulations, because:

(1) According to Points c and k, Clause 1, Article 148 of the 2023 Housing Law, OV MB is only allowed to sign the Operation Management Contract with Company S after being selected by the COM; at the same time, it is only allowed to perform other tasks assigned by the COM that are not contrary to the provisions of the law.

(2) Pursuant to Clause 1, Article 29 of the Regulation on management and use of condominiums (Promulgated together with Circular No. 05/2024/TT-BXD dated July 31, 2024 of the Minister of Construction), because the Operation Management Contract with Company S is signed on a year-to-year basis, or in other words, has a term of 12 (twelve) months, upon expiration, whether to continue signing the Operation Management Service Contract with Company S must be decided by the COM, on the basis of agreement with Company S.

(3) The management and operation regulations of OV Condominium stipulate that the extension of the Operation Management Contract must be approved by the COM.

From (1), (2) and (3), there are grounds to determine that OV MB's 3rd extension of the operation management contract annex with Company S without the approval of the COM shows signs of exceeding its rights and responsibilities as prescribed.

Therefore, according to Clause 3, Article 148 of the 2023 Housing Law and Clause 1, Article 143 of the 2015 Civil Code, the decision to extend the Operation Management Contract with Company S by OV MB has no legal validity and does not give rise to rights and obligations for the owners of OV Condominium, except in cases where:

The above extension is recognized by the COM;
The owners of OV Condominium are aware of it but do not object within a reasonable time (For example: The extension was publicly announced by OV MB; Company S continues the operation management; The owners of OV Condominium still pay management fees, engage in work with Company S, and raise no objections over a long period of time).

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