Strict penalties needed to fight fraudulent property firms
Strict penalties needed to fight fraudulent property firms
It is necessary to develop strict penalties to combat those operating fraudulent real estate businesses to protect the legitimate rights of consumers and legitimate firms, according to executives from real estate firms and experts.
The HCMC government has urged the Ministry of Construction to propose the Government issue regulations forcing real estate firms to publicize information about their projects and impose heavy penalties on those deliberately violating regulations.
Ngo Quang Phuc, general director of Phu Dong Group, said he supports the proposal, as real estate is a conditional business sector and enterprises must meet conditions therein.
Heavy penalties are aimed at ensuring that the market is transparent. If regulations are not strict enough, law-abiding firms will lose their confidence in State management agencies, while those with fraudulent business activities will benefit, Phuc added.
The leader of another property firm said penalties should be imposed cautiously, as an investor may develop multiple projects. If the information about a certain project is not publicized adequately, leading to the company’s suspension, both the company and banks offering loans to it will be placed in jeopardy.
At present, not only home buyers, but also property developers are facing a high risk of losses due to overlapping and unreasonable regulations.
Therefore, agencies should support enterprises to remove obstacles that prevent them from quickly executing projects. Once regulations are tightened and made reasonable, enterprises will be willing to publicize information about their projects.
According to Bui Quang Tin, President and CEO of BizLight Business School, the disclosure of information about real estate projects is necessary, but it is more important to help consumers easily find such information.
In HCMC, many real estate projects whose capital has been raised illegally are selling properties to the public. In order to ensure the rights and benefits of home buyers, the HCMC government has proposed suspending for one year the operations of enterprises violating regulations on information disclosure.
In addition, investors of real estate projects must have credit guarantee contracts from credit institutions.
