Vietnam: The controversial proposal of the Ministry of Construction to change real estate law
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The Vietnamese Ministry of Construction has just proposed to the government to amend the Real Estate Activities Law of 2014 because a number of legal provisions are principled and unclear.
In the amendments proposed by the Vietnamese Ministry of Construction, the addition of a regulation that requires real estate developers to sell real estate through the platform, with a royalty payable on floors equal to 2% of the controversial price of real estate in the market.
Editing 9 groups of fonts
According to the Ministry of Construction, the Law on Real Estate Activities contains unclear provisions, but it has not been handed over to the competent authorities for detailed regulation, so it is difficult to enforce.
In addition, the amendment of the Law on Real Estate Activities to ensure consistency with the Law on Housing, the Law on Tenders, the Law on Investment, the Law on Enterprises, the Law on Construction has been revised over the years and meets the requirements for international integration.
Also according to the Ministry of Construction, the amendment of the Law on Real Estate Affairs will focus on the resolution and completion of 9 major groups of policies.
These are general provisions on the application of the laws and principles of real estate trade, the types of real estate offered for sale and prohibited acts.
Regulations on the trade of existing houses and construction works; on housing business, construction work formed in the future.
Complete regulations on land use rights cases in real estate projects; on the transmission of a real estate project.
Complete the regulations on real estate brokerage; regulation of the real estate trading room, advisory services, real estate management; construction and management of information and data systems on the housing and real estate market; regulations on the management of commercial real estate activities.
2% transaction fee controversy
According to the Ministry of Construction, forcing real estate project investors to do business through the platform will improve the mechanism for preventing and combating money laundering and terrorist financing in Vietnam, thereby creating an environment of healthy investment for businesses. But this regulation is controversial among real estate developers and brokerage firms, real estate exchanges.
This regulation ensures market transparency and protects the rights and interests of clients and investors. Real estate assets formed in the future, when they pass through the dealing room, must be appraised, verified and comply with the provisions of the law before being listed, announced and marketed. But removing this regulation could increase the selling price of homes. The transfer and rental of houses and buildings via the trading platform is a step backwards, it could create special advantages for real estate trading rooms, violating the commercial autonomy of project investors.
If only allow investors to sell only 20% of the products; The remaining 80% of the products must be sold through the real estate exchange, the exchange does not invest in the project, but has the privilege of selling 80% of the project proceeds, it is not equal between companies.
The exchange has the right to benefit from a transaction commission of less than 2% of the value of the real estate purchase and sale contract, which is also unfair between companies. There is a risk that real estate exchanges will divert payment from clients’ contracts with investors.
In addition, the transaction fee via exchanging more than 2% of the contract value is not a small expense, the investor will surely add to the sale price and the buyer is the last holder.
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
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