Vietnam considers allowing foreigners building houses for business
Vietnam considers allowing foreigners building houses for business
Some legal problems would arise if Vietnam allows foreign institutions (Viet Kieu, or overseas Vietnamese) to build houses in Vietnam for business (leasing, trading).
The Ministry of Construction and the National Assembly’s Economics Committee have begun making examination over the draft of the amended real estate trade law which would be put into discussion at the 26th National Assembly’s session slated for March 10-14, 2014.
The most important provision of the amended law is that foreign institutions are allowed to build houses for lease or sale.
Foreigners build houses, Vietnamese grant ownership certificates
Under the draft law, Viet Kieu would have the right to do business in the real estate market under four modes 1) building houses for sale, lease 2) leasing houses for re-leasing 3) building technical infrastructure works on leased land for lease, and 4) leasing the land with technical infrastructure works for re-leasing.
What will happen, if the draft law is ratified, then? Though Viet Kieu individuals and institutions can spend money to build houses for sale or lease in Vietnam, they will not have the right to grant the ownership certificates. Under the current laws, only the State of Vietnam can grant the certificates.
In Vietnam, possessing houses in reality and having the ownership certified are the two different stories. This explains why in Hanoi and HCM City, tens of thousands of apartments, which have been used for the last many years, still have not got the land use right certificates, or called “red book” because of the red color of the certificate.
A report showed that in Hanoi, 82,200 sold apartments still have not been granted red books by October 2013.
According to the Hanoi Department of Natural Resources and the Environment, there are 3 reasons behind this. First, the investor might not accord the approved designs when building the houses. Second, the investors still have not fulfilled the financial duties. Third, the real owners of the apartments have not made payment, or have not applied for certificate granting.
However, no matter what the reason is, it is foreseeable that once Viet Kieu investors join the market, the existing problem would get even more serious.
This would cause a bigger headache to the watchdog agencies, which have to deal with too many documents and problems. Meanwhile, buyers would feel discouraged because they don’t know when they can receive red books which prove their ownership.
Under the current laws, red books must be granted within 30 days from the day the properties are transferred to buyers. However, in most of cases, people cannot get red books within the given period.
A senior executive of EZ Vietnam Real Estate JSC frankly said that in the current conditions, it is impossible to fulfill the administrative procedures within 30 days as stipulated.
Law lends a hand to violators?
MOC has recently released the Circular No. 02 which guides the Decree No. 121 on sanctioning the violations in the field of construction. The legal document, taking effects on November 30, 2013, stipulated that the investors may have to pay the fine valued at 50 percent of the prices of apartments, offices, and 100 percent of the prices of separated houses.
This means that the violators will not be forced to tear down the buildings or fix the problems. They can pay fine instead to maintain the violations.
vietnamnet
