Condotels have not been forgotten
Condotels have not been forgotten
Despite some unresolved issues, the licence to grant ownership rights for resort and condotel property investments has fulfilled investors' hopes after decades of waiting.
Decree No.10/2023/ND-CP that augments laws on tourism accommodation products built on commercial land will grant a certificate of ownership in accordance with the objectives for commercial and service land use if all legal requirements relating to land, construction, and real estate business are met.
After being excluded for many years, a legal pathway for condotels has started to emerge. The decree permits the granting of ownership rights for tourist accommodation works constructed on commercial and service land with a number of stipulations, fuelling the revitalisation of this market segment. With this decree, investors will have greater confidence in the legal and property value of condotel, officetel, and shophouse investments.
However, there are still some vague regulations, causing lawyers and experts to be concerned that problems may arise when they are applied in practise.
For instance, in order to be granted ownership, an investor must satisfy all conditions stipulated by the land law, the construction law, and the real estate business law. However, there is no regulation specifying the agency responsible for determining if the requirements have been fulfilled.
In addition, the investor must prove its financial responsibility and pay an additional financial duty when submitting the application in order to be granted ownership. Since the determination of financial commitments is frequently complicated and time-consuming, this can lead to complications. In fact, numerous initiatives have had to modify their plans, forcing them to redefine their financial obligations and pay more money.
In addition, the bestowing of ownership rights only resolves the issue of use rights, and a number of other issues require attention and more specific regulations.
Some specialists have questioned how the projects are to be managed and operated following the transfer of ownership, wanting to know the regulations, standards, warranties, and maintenance requirements for this new type of property.
To expedite the implementation of Decree No.10/2023/ND-CP and aid localities in the issuing of ownership for condotel projects, more comprehensive and tailored instructions have been called for that explicitly define the responsibilities of resort real estate project stakeholders, including local authorities, investors, proprietors, and administrators.
According to the Vietnam Real Estate Association, there were 239 tourism-related real estate developments in 2022, including approximately 114,000 condotels, nearly 24,400 resort villas, and approximately 30,900 shophouses across the nation.
The estimated total value of these three categories of resort real estate in 2022 was approximately $30 billion. The majority of resort properties have not been granted ownership rights, preventing investors from trading, buying, and selling on the secondary market, which has impeded development.
The first legal basis for this type of property was government Decree No.02/2022/ND-CP, which details a number of articles from the Real Estate Business Law of 2014. As a result, the variety of contract documents for new real estate transactions involving condotels and officetels is now more flexible. Circular No.03/2021/TT-BXD from the Ministry of Construction, which promulgates national technical regulations on apartment buildings specifying purposes, usable area, and required equipment, is the next legal basis, but it contains only a few outlines.
