Vietnam: How is the transfer of long-term real estate lease agreements regulated? What acts are prohibited in housing activities?
How is the protection of homeownership regulated?
According to Article 5 of the 2014 Law on Housing in Vietnam, the protection of homeownership is as follows:
- The State recognizes and protects the homeownership of homeowners as prescribed in this Law.
- Any houses under lawful ownership of organizations, households or individuals shall not be nationalized.
In case of vital necessity for national defense and security purposes; socio-economic development for national or public benefits, or state of war, state of emergency, or disaster response, the State shall decide the purchase, commandeering, or demolition of housing under lawful ownership of the organizations, households, or individuals, then the State must pay compensation and carry out policies on relocation to homeowners as prescribed.
Vietnam: How is the transfer of long-term real estate lease agreements regulated? What acts are prohibited in housing activities?
How is the transfer of long-term real estate lease agreements regulated?
Pursuant to Article 117 of the 2014 Law on Housing in Vietnam, the methods of transactions in housing is as follows:
Transactions in housing include agreements on housing sale, lease, and lease purchase, transfer of agreements on commercial housing sale, gifting, exchange, inheritance, mortgage, capital contribution, lending, permission for stay, and management authorization.
Pursuant to Clause 1, Article 17 of the 2014 Law on Real Estate Trading in Vietnam, the types of real estate trading agreement are as follows:
- Building sale agreement;
- Building rent agreement;
- Lease purchase agreement;
- Land transfer, lease, and sublease agreement;
- Agreement on transfer of all or a portion of real estate project.
At the same time, in Article 36 of the 2014 Law on Real Estate Trading in Vietnam, the transfer of lease purchase agreement is as follows:
- The lessee may transfer the lease purchase agreement when the application for Certificate of land, ownership of houses and property on land granted to the lessee has not submitted to competent agencies. The transfer of lease purchase agreement must be made in writing and certified by the lessor.
- The transferee of lease purchase agreement may resume rights and obligations of the lessee. The lessor must enable contracting parties to transfer the agreement and do not collect any charges relating to the transfer of agreement.
- The transferee shall be granted the Certificate of land, ownership of houses and property on land by competent agencies as prescribed law on land.
- The transfer of agreement prescribed in Article 36 of the 2014 Law on Real Estate Trading in Vietnam shall not be applicable to social house lease purchase agreement.
Pursuant to the above provisions, there is no form of transfer of house lease agreement, transfer of house rental right and no regulations on assignment of house and construction rental agreement and transfer of house and construction rental right.
In addition, Official Dispatch No. 4500/BXD-QLN in 2022 is guided by the Ministry of Construction as follows:
According to the provisions of the 2014 Law on Housing in Vietnam and the 2014 Law on Real Estate Trading in Vietnam, housing rental transactions, housing rental agreements and housing purchase and sale transactions, housing purchase and sale agreements are two different methods of housing transaction, two different types of real estate business agreements.
In order to ensure the interests of taxpayers and have a legal basis to determine the financial obligations of the taxpayer, it is recommended that the Tax Department coordinate with relevant agencies to request the investor to guide the taxpayer to complete records related to transactions on housing and real estate business in accordance with the provisions of law.
What acts are prohibited in housing activities?
Pursuant to Article 6 of the 2014 Law on Housing in Vietnam stipulating the following prohibited acts:
- Infringing the homeownership of the State, organizations, households or individuals.
- Obstructing the fulfillment of state management of housing, exercise of rights and fulfillment of obligations of the organization, household, or individual in terms of the homeownership, use of housing and housing-related transactions.
- Introducing policies on residential construction projects or residential construction projects in contravention of approved residential construction planning, residential development planning.
- Building houses on the pieces of land other than residential land; build houses in contravention of standards for design standards, housing area standards applied to each type of houses as prescribed. Applying the incorrect calculation of floor area prescribed in law on housing sale or specified in the lease purchase agreement.
- Illegal appropriation of housing areas; encroaching upon the space and facilities under common areas or ownership of other owners in any shape or form; arbitrarily change the bearing structure or change the design of private areas in the apartment building.
- Using the common areas and facilities under joint ownership or joint use for private purposes; use common areas or the areas for service provision in a mixed-use building for improper purposes against the approval of residential construction project or the approved project, unless such area is permitted to change purposes by a competent agency.
- Using mobilized capital or advance payments for housing development for improper purposes.
- The investor in a residential construction project authorizing or assigning the parties involved in investment cooperation, joint venture, association, capital contribution or other organizations, individuals to conclude agreements on housing lease, lease purchase, sale, deposit agreements on housing-related transactions or agreement on trading of land use rights in projects.
- Making transactions in housing sale or transfer of housing sale agreement, housing lease, lease purchase, gifting, exchange, inheritance, mortgage, capital contribution, lending, and permission for stay or authorization for housing management not in accordance with this Law.
- Renovating, expanding, demolishing the houses under agreements on housing lease, lease purchase, lending, permission for stay, or authorization of housing management without the consent of the homeowner.
- Using the apartments not for residential purposes; using the area for business purposes in the apartment building under approved project for trading flammable materials, explosives, providing services causing environmental pollution, noise or negative effects on the lives of households and individuals in the apartment building as prescribed in regulations of the Government.
- Using the separate houses for trading flammable materials, explosives, providing services causing environmental pollution, noise or other operations or negative effects on the lives of households and individuals in the apartment building as prescribed in regulations of law on requirements for business.
- Providing information about housing inaccurately, untruthfully, unconformably with regulations or requests of the competent agencies; destroy or falsify information in the database of housing managed by the competent agencies.
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