New document released to regulate use of non-residential real estate
New document released to regulate use of non-residential real estate
The Ministry of Natural Resources and Environment (MoNRE) has sent a document to local departments to regulate the use and certification of non-residential real estate projects. 
The use and certification of non-residential property such as condotels have been a problem for years. The downtrend in the condotel segment has also been attributed to unsolved problems regarding land use certificates for investors.
In the document, which was sent on Friday, the ministry listed some items regarding obligations and terms for non-residential property projects.
According to Article 48 of the Law on Tourism 2017, condotels and other non-residential real estate products are considered accommodation and food businesses. They are bound by Decision 27/2018/QD-TTg issued by the Prime Minister on July 6, 2018.
According to Item 2, Article 10 of the Law on Land and Appendix 01 attached to Circular 27/2018/TT-BTNMT issued by MoNRE on December 14, 2018, property areas used for commercial purposes must be classified as commercial land.
The use and terms of use for commercial land investors are regulated in articles 126 and 153 of the Law on Land. According to the articles, institutional investors may rent and use the land for commercial purposes for a maximum of 50 years. The term of use may be extended up to 70 years for large-scale projects located in disadvantaged areas with low profits.
MoNRE’s latest document states if a non-residential property meets the transfer requirements regulated by the Law on Real Estate Trading, it is subject to Article 32 of Decree 43/2014/ND-CP dated May 15, 2014 by the Government.
MoNRE also asked provincial departments of natural resources and environment to review the licences given to local property sites regarding their purposes and terms of use.
The licences must assure investor’s obligations and interests in accordance with existing rules, and the investor must not change the scale, purpose or planning of the project.
According to the HCM City Real Estate Association (HoREA), MoNRE had forgotten to include other types of non-residential real estate products in its latest document.
“The document only mentions condotels but ignores shoptels,” HoREA said in a statement sent to MoNRE.
HoREA asked MoNRE to amend the document to include the concept of a shoptel, which are usually built inside resorts and sold to secondary investors.
The association also suggested there must be a private area and a shared area for each condotel and the price of condotels must be based on those two areas just like regular apartments.
HoREA recommended the concept of a condotel must be amended from “an accommodation apartment” to “a travel apartment”.
