Is the investor in Vietnam allowed to transfer the real estate project that is not under a dispute over land use rights?

Main Content

• Is the investor in Vietnam allowed to transfer the real estate project that is not under a dispute over land use rights?
• Is an agreement on the transfer of part of a real estate project in Vietnam required to include the transfer price and payment method?
• Does the provincial People's Committee have the power to allow the transfer of a real estate project in Vietnam?

Is the investor in Vietnam allowed to transfer the real estate project that is not under a dispute over land use rights?

Under Article 49 of the Law on Real Estate Business 2014 on the requirements in terms of transfer of part or whole of a real estate project, the transferred real estate project shall meet the following requirements:

+ The project is approved by competent agencies; there is a specific planning 1/500 or general ground planning which is approved;

+ The compensation or site clearance of the transferred project or a portion of the transferred project has been finished. Regarding transfer of all infrastructure construction projects, the technical infrastructure must be completed equivalent to schedule as specified in the approved project;

+ The land in the project is not disputed or distrained by a competent agency

+ There is no decision on project or land revocation conducted by a competent agency; in case there is any violation during the progress of the project, the investor must abide by the decision on penalty.

- The transferor has a Certificate of land regarding all or a portion of the transferred project.

- The transferee must be a real estate enterprise, acquire financial competence and commit to keep conducting the business as prescribed in regulations of law and ensure that the project is conducted under proper progress and plan.

Thus, the investor may be allowed to transfer the real estate project that is not under a dispute over land use rights. However, this is only one of the requirements for the transfer of part or whole of a real estate project. In addition to having no dispute over land use rights, the transferred real estate project must ensure the above requirements.

At the same time, the transfer of part or whole of a real estate project must ensure the principles in Article 48 of the Law on Real Estate Business 2014 as follows:

- The transfer of all or a portion of the real estate project shall meet the following requirements:

+ Do not change objectives of the project;

+ Do not change objectives of the project's plan;

+ Ensure the rights of clients and related contracting parties.

- The transfer of part or whole of a real estate project shall be approved in writing by competent agencies. The investor (transferee) may be granted the Certificate of land, ownership of land and property on land or may register the adjustments in the certificate granted to the transferor as prescribed in law on land.

- The transferee is not required to complete the project documents, construction planning and license for construction again if the approval for investment policies and investment decision is not changed.

Is an agreement on the transfer of part of a real estate project in Vietnam required to include the transfer price and payment method?

Under Clauses 4 and 5, Article 53 of the Law on Real Estate Business 2014 on the content of the agreement on the transfer of part or whole of a real estate project:

Content of agreement on transfer of part or whole of a real estate project

Content of agreement on transfer of part or whole of a real estate project:

1. Names and addresses of contracting parties;

2. Basic information about approved project;

3. Specific information about all or a portion of transferred project;

4. Transfer price;

5. Payment method and deadline;

6. All or a portion of transfer deadline and enclosed documents;

7. Rights and obligations of contracting parties;

8. Liability of contracting parties in the completion of administrative procedures relating to the land;

9. Liability for breaches of agreement;

10. Penalties for breaches of agreement;

11. Dispute settlement;

12. Cases in which the agreement is terminated and solutions;

13. Effective date of the agreement.

Thus, an agreement on the transfer of part of a real estate project in Vietnam must include the transfer price, payment method, and all the above contents.

Does the provincial People's Committee have the power to allow the transfer of a real estate project in Vietnam?

Under Article 50 of the Law on Real Estate Business 2014 amended by Point b, Clause 2, Article 75 of the Law on Investment 2020 stipulating the power to allow the transfer of part or whole of a real estate project:

The power to allow transfer of part or whole of a real estate project

1. In the case of a real estate project for which the investor has been approved or to which an investment registration certificate has been issued in accordance with the Law on Investment, power and procedures for transfer of part or whole of a real estate project shall comply with the Law on Investment.

2. For a real estate project other than that mentioned in Clause 1 of this Article, the power to allow transfer of part or whole of a real estate project is as follows:

a) People's Committees of provinces and central-affiliated cities (hereinafter referred to as “provincial People's Committees”) shall decide to allow the transfer of part or whole of real estate projects subject to investment decision by provincial People's Committees;

b) The Prime Minister shall decide to allow transfer of part or whole of a real estate project, for projects subject to investment decision by the Prime Minister.

Thus, except for the case specified in Clause 1, Article 75 of the Law on Investment 2020, the provincial People's Committee only has the power to allow the transfer of part or whole of a real estate project subject to investment decision by the provincial People's Committee.