Proposal for time-limited apartment ownership dropped

Proposal for time-limited apartment ownership dropped

The Ministry of Construction has removed a proposal for time-limited apartment ownership from the draft amended Law on Housing after extensive public consultation, while retaining provisions governing the service life and safety management of apartment buildings.

The move indicates that the draft legislation continues to be refined based on stakeholder feedback, while maintaining its primary focus on the management of residential buildings.

The proposal to tie apartment ownership rights to the service life of apartment buildings had been one of the most closely watched provisions after the Ministry of Justice published appraisal documents for the draft amended Law on Housing prepared by the Ministry of Construction (MoC).

Under the earlier proposal, ownership rights to an apartment would be established upon state recognition of ownership and would terminate when the building reached the end of its service life or became subject to mandatory demolition under the law.

After broad consultation, the Ministry of Construction removed the proposal for time-limited apartment ownership from the draft amended Law on Housing

The drafting agency expected the provision to provide a clearer legal basis for the renovation and reconstruction of ageing apartment buildings, an area that has long faced multiple obstacles.

However, according to the latest information from the Housing and Real Estate Market Management Agency under the MoC, the provision on time-limited apartment ownership has now been removed from the draft amended Law on Housing.

The draft is continuing to be reviewed, revised and submitted to the competent authorities in accordance with the legislative timetable.

Notably, removing the provision on time-limited ownership does not mean eliminating regulations governing the life cycle of apartment buildings.

Under the latest draft, the service life of apartment buildings will continue to be determined based on the design documentation and the actual period of use as concluded through building quality inspections.

The service life will be calculated from the date the building is officially accepted for operation.

When an apartment building reaches the end of its design service life, or before that if it has deteriorated, faces a risk of collapse or no longer meets safety requirements, local people's committees will be responsible for organising inspections and quality assessments in accordance with construction legislation.

The official declaration that an apartment building has reached the end of its service life will also be carried out in accordance with the Law on Housing and construction laws.

The current draft therefore focuses on regulating the service life of apartment buildings rather than imposing a time limit on residents' ownership rights to their apartments.

During the public consultation process, numerous organisations, experts and businesses provided comments on the proposed time-limited apartment ownership regime.

As one of the earliest organisations to submit comments, Ho Chi Minh City Real Estate Association (HoREA) proposed that apartment ownership rights should not terminate when a building reaches the end of its service life.

It also called for retaining the principle of indefinite ownership of apartments built on residential land allocated for long-term stable use, as provided under the 2023 Law on Housing and the 2024 Land Law.

According to HoREA chairman Le Hoang Chau, linking apartment ownership to a building's service life could create uncertainty among homeowners and may not ensure consistency within Vietnam's legal framework.

Instead, the association proposed maintaining the two ownership mechanisms already provided under the 2023 Law on Housing: indefinite ownership for housing built on residential land designated for long-term stable use, and fixed-term ownership where agreed by the parties or where housing is constructed on land with a fixed land-use term.

Many experts argue that studying a mechanism linked to a building's service life stems from the need to resolve long-standing obstacles to the renovation and reconstruction of ageing apartment buildings.

However, they said that if such a policy were to be developed, it should also include comprehensive resettlement provisions to safeguard residents' interests.

The removal of the proposal for time-limited apartment ownership from the draft amended Law on Housing indicates that policymakers are continuing to review and refine the legislation after considering feedback from industry associations, experts and market participants.

Going forward, while ensuring the rights of homeowners’ property, addressing the challenges surrounding the renovation and reconstruction of ageing apartment buildings remains one of the key policy issues requiring institutional mechanisms before the draft is submitted to authorities for consideration.

VIR