Foreigners allowed to buy houses, but cannot sign contracts

Foreigners allowed to buy houses, but cannot sign contracts

Foreigners can only put a deposit down for houses, but still cannot sign contracts and get houses delivered, even though the 2014 Housing Law took effect three months ago.

Professor Paul, 45, a lecturer at HCM City National University, has been in Vietnam for five years. He and his family live in a house in Thao Dien residential quarter in district 2, which he rents for $1,500 a month.

He decided to buy a villa developed by Sacomreal, at $700 per square meter after the new Housing Law took effect. However, he still cannot sign contracts with the developer, but only can pay a deposit and wait.

He is willing to buy a house in HCM City, but he finds the laws too complicated, and he has to pay for legal services. He wants to own houses permanently, but he heard that current laws allow him to own a house for only 50 years.

He wants to sign contracts in both Vietnamese and English, so that he can seek international legal support in case of a dispute, but the contracts are only in Vietnamese.

And more importantly, many of his friends want to borrow money from banks to buy houses, but they have been turned down by banks in Vietnam.

According to Truong Dinh Long, deputy general director of OCB, under current regulations, foreign individuals can borrow money from credit institutions.

However, in fact, banks have hesitated to lend to foreigners because they cannot find out if foreigners can pay debts, as it is difficult to examine customer creditworthiness via intermediate agencies.

The banks do not know how to deal with the collateral if foreigners do not pay due debts and leave Vietnam.

Vo Thi Diu Hien, deputy general director of Sacomreal, said that 22 villas at Sacomreal’s Jamona Home Resort project have been sold to foreigners and overseas Vietnamese over the last two months, but the clients could only pay a deposit for houses.

“Contracts still cannot be signed because we are still waiting for the legal documents to be released by state management agencies,” Hien said.

Novaland also confirmed that 120 foreign clients had paid deposits for houses, but official contracts still could not be signed.

Nguyen Manh Khoi, deputy director of the Ministry of Construction’s House and Real Estate Management Agency, admitted that some more legal documents were needed to implement the new Housing Law.

Khoi said about 10 foreign clients have received house ownership certificates since the new law took effect, and 500 overseas Vietnamese are awaiting guidance to register for their house ownership.

“Necessary procedures will be released in September, which will allow foreigners and overseas Vietnamese to buy houses in an easy way,” he said.

vietnamnet