The bill on the abolition of commissions for payment of housing and communal services caused dissatisfaction among bankers, management companies and homeowners’ associations

The bill, initiated by the Speaker of the State Duma Vyacheslav Volodin, abolishing commissions for citizens to pay for utility services, has caused discontent among businesses. At first, banks proposed to shift these payments to resource supply organizations. Now management companies (MCs) and homeowners’ associations (HOAs) are afraid that they will have to do this – as agents of water utilities, gas supply companies and other companies. Whatever the outcome of the dispute, the commission will ultimately have to be paid by end consumers, experts warn.

Kommersant obtained a letter dated November 27 from the President of the Association of Real Estate Service Companies (AKON), Nikita Chulochnikov, to the head of the Central Bank, Elvira Nabiullina, and the Minister of Finance, Anton Siluanov, with a request to limit the maximum commission to 0.5% for paying for housing and communal services with management companies and homeowners associations acting agents of resource supplying organizations and accepting utility payments from the population. Businesses fear that banks will increase commissions for management companies and homeowners associations to compensate for lost income after the abolition of commissions for citizens. The Ministry of Finance did not respond to Kommersant’s request. The Central Bank reported that they would consider the letter received.

In February 2020 bill on the abolition of the commission for paying housing and communal services for citizens was submitted to the State Duma by a group of deputies led by Vyacheslav Volodin and adopted in the first reading in April of the same year. A month later, the State Duma Committee on Housing Policy and Housing and Communal Services developed a table of amendments to the document for the second reading, recommending a ban on charging fees only to pensioners and citizens receiving subsidies to pay for housing and communal services. Since then, the bill has not been considered, but in November 2023, Mr. Volodin returned to the bill again, instructing deputies to adopt it by the end of this year. This would make it possible to abolish commissions for citizens as early as 2024.

But banks do not agree with this position. As reported RBC, at the end of November this year, the National Council for the Financial Market (NCFM), in its response to the bill, proposed charging commissions from resource supply organizations instead of citizens. The association warned that the introduction of a ban on charging commissions from citizens would lead to forced optimization of business processes and, as a result, to a deterioration in terms of customer service by banks. AKON, in turn, warns that the burden on citizens paying for housing and communal services will be increased in a hidden form. It explains that the end consumer will receive from the management company or homeowners association an increased fee for the maintenance and repair of residential premises, or the volume of services provided will decrease.

This, as business fears, will have a negative impact on the overall condition of the housing and communal infrastructure, which now requires additional injections due to severe underfunding both from the population itself and from the state.

Resource supply organizations have the right to increase tariffs unilaterally, and management companies only through a general meeting of homeowners, explains Irina Izvekova, general director of Mangazeya Service Management Company.

According to her, residents, as a rule, do not agree with such a decision, and management companies will be forced to reduce the quality of services to cover the costs of paying the commission.

Chairman of the NFSR Andrei Emelin believes that any government intervention in pricing “only brings harm to the consumer.” In any case, the cost of the service will be paid by the consumer – either by including banking services in the cost of housing and communal services, or directly, he adds. Now in the banking market there are many technological options for paying for housing and communal services without commission, Mr. Emelin continues: “But if the commission for citizens is abolished completely, then in the end subsidized methods of paying for housing and communal services will simply disappear from the banks’ offers.”

About 70% of payers for housing and communal services in Russia paid for them without commission, having a direct agreement between the credit institution and the provider of housing and communal services, the Association of Russian Banks calculated in April 2020.

Another 20% pay a commission of up to 1% inclusive, as they use a mobile application, Internet banking and other remote channels of banks that do not have an agreement with the housing and communal services service provider. The remaining 10%, who use banking services, pay a commission of over 1%, most of them – 2%, since they deposit cash through cash registers.

Managing partner of the Asterisk law office, Vladimir Khantimirov, believes that it would be advisable to limit the maximum commission received by resource supply organizations, management companies and homeowners associations, in the amount of from several percent to 5% of the payment amount. The lawyer believes that a commission of 0.5% is unlikely and, most likely, the rate will be set at the maximum level.

Daria Andrianova