Legality of condotels must be clarified
Legality of condotels must be clarified
Experts said the legality of coastal condotels should be clarified since the product had recently emerged an investment trend in Viet Nam’s realty market.
According to Nguyen Quoc Khanh, president of G5 Property Trading Floor Alliance, condotel, a condominium operated as a hotel, is a new property product in Viet Nam but has already grabbed significant market attention.
Khanh cited statistics showing that in 2016 alone, there were more than 12,000 condotels put up for sale on the market.
However, the lack of regulations was hindering the development of condotels as well as investment in this segment, Khanh said.
Khanh said investors remained unclear about ownership when investing in condotels.
Developers were offering different durations for condotel ownership, which could be 50 years, 70 years or long term, depending on the project, and this was confusing investors, Khanh said.
He said the granting of condotel ownership certificate also faced obstacles as details had not been clearly laid out.
“Condotels are being developed mainly in tourist-attraction localities. The project can be developed on commercial service land which is for lease and not allowed to be sold like residential land. As a result, it is difficult to ask for an ownership certificate,” Khanh said.
In addition, there were no detailed regulations on the purpose of condotels as well as the fees to be collected.
Investors were also worried about the feasibility of returns that developers guaranteed and transparency on returning guaranteed profits, Khanh said. Popular rates of return that developers guaranteed for condotel investment were between eight and 14 per cent for a period of 5-10 years.
To promote condotel development, policies on ownership should be clarified and condotels should be added as a legal property product, Khanh said, adding that annual audit of condotel projects must be made mandatory to protect investors’ rights.
According to Doan Van Binh, deputy president of Viet Nam Real Estate Association, regulations on granting condotel ownership certificate, ownership duration and ownership transfer needed to be clarified to boost liquidity.
Binh said technical standards of coastal condotels must be issued early for appropriate operation.
According to Nguyen Van Nam, deputy director of Da Nang Construction Department, the development of condotels must be put under tight management to ensure compliance with urban planning and in accordance with technical infrastructure and tourism industry development. Responsibilities of developers, owners and ownership must also be clarified, Nam said.
Do Thu Hang, deputy director of property services firm Savills Ha Noi, said condotels made an appearance in Viet Nam’s realty market some five years ago and became an especially hot trend since last year. Hang forecast that liquidity of condotels would see improvement this year and remain an attractive investment channel.
