The Vietnam Ministry of Construction is organizing consultations with organizations, individuals, and experts on the draft Decree on the Vietnam Law on Real Estate Business.
The notable point is that the draft regulations are stricter than the conditions for real estate business when it is proposed that organizations and individuals must establish enterprises or cooperatives in the same industry to do real estate business.
Accordingly, when establishing a real estate company, enterprises must disclose information including name, head office address, legal representative, contact phone number, and information related to real estate put into the business. on the enterprise's web portal, the web portal of the provincial housing authority where the enterprise registers its business and where the real estate is put into the business.
In the case of being the investor of a real estate project, in addition to the above provisions, the owner's equity must be at least 20% of the total investment capital for projects with a land-use scale of fewer than 20 hectares. For projects with a scale of 20 hectares or more, this level is 15%.
The draft Decree on Vietnam Real Estate Law
The draft decree also mentions more specifically about organizations, households, and individuals doing small-scale and irregular real estate business. Accordingly, small-scale real estate business is defined as cases of sale, lease, hire-purchase of houses and construction works, transfer, lease, or sublease of land use rights below the land area for construction of houses and works prescribed by the People's Committee of the province.
Irregular real estate business includes cases such as the sale or transfer of houses and construction works due to bankruptcy or dissolution; sale, transfer, lease-purchase of state-owned real estate when permitted by competent state agencies; Credit institutions sell or transfer houses, works, projects under guarantee or mortgage to recover the debt.
According to the draft decree, these groups are not required to meet the above conditions but must declare and pay taxes according to regulations.
In addition, the Ministry of Construction is also collecting opinions for the draft Decree on sanctioning administrative violations in the field of construction. This draft decree stipulates a number of new points on fines in real estate business, violations of construction of remedial measures, penalties for illegal construction.
This draft has increased the fine level by 1.5 – 2 times compared to the fine level specified in Decree No. 139/2017/ND-CP (Decree 139) stipulating the sanctioning of administrative violations in the activities of construction investment. Particularly violators in the field of construction order and real estate business, with acts of being fined up to 1 billion VND.
In addition, the draft decree increases the fine up to 800 million VND for some acts of real estate business such as transferring the whole or part of a project without ensuring the requirements or conditions as prescribed, handing over houses and construction works to customers when the investment in housing construction has not been completed, construction works and technical and social infrastructure works according to the schedule stated in the approved project, not yet ensured connection with the common infrastructure system of the region; illegally mobilize or appropriate capital; using capital mobilized from organizations or individuals or advanced money from buyers, lessees, and lessees to purchase future real estate for improper purposes as committed.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.