Vietnam: Can I get back my deposit on off-plan housing if the investor fails to transfer it on schedule as committed?
Can the sale of off-plan housing in Vietnam be guaranteed?
Pursuant to Clause 1, Article 56 of the 2014 Law on Real Estate Trading in Vietnam and Clause 2, Article 56 of the 2014 Law on Real Estate Trading in Vietnam as follows:
Guarantee on off-plan housing sale or lease purchase
1. The investor’s financial obligations must be guaranteed by a competent commercial bank in case the investor fails to transfer the building on schedule as commitment to clients before the investor sell or lease purchase off-plan housings.
The State bank of Vietnam shall issue the list of competent commercial banks which may give guarantee in the off-the-plan real estate trading.
2. The scope, requirements, content and guarantee fee shall be agreed by contracting parties and concluded in an agreement provided that responsibility of the guarantor must be ensured as prescribed in Clause 3 of this Article. The investor shall send the copy of guarantee agreement to the buyer or lessee when the agreement on sale or lease purchase is signed.
The guarantee agreement will stay unexpired until the building is transferred to the buyer or lessee.
At the same time, based on Clause 1, Article 13 of Circular 11/2022/TT-NHNN commercial banks that are allowed to guarantee off-plan housing must meet the following regulations:
Off-plan housing guarantee
1. A commercial bank is considered to be capable of giving off-plan housing guarantee if:
a) Its license for establishment and operation, or the document stating amendments to this license includes bank guarantee operations;
b) It is not prohibited, restricted, or suspended from provision of off-plan housing guarantee.
Thus, when selling, leasing and buying off-plan housing, the real estate project investor’s financial obligations must be guaranteed by a commercial bank that is capable of performing their financial obligations.
Vietnam: Can I get back my deposit on off-plan housing if the investor fails to transfer it on schedule as committed? (Image from the Internet)
How much is the guarantee amount for off-plan housing in Vietnam?
Pursuant to Clause 7, Article 13 of Circular 11/2022/TT-NHNN stipulating:
Off-plan housing guarantee
...
7. The maximum guarantee sum for an off-plan housing project shall not exceed the sum of amounts which the investor is allowed to receive in advance from the buyer in accordance with regulations in Article 57 of the Law on Real Estate Business and any other amounts paid under the purchase contract or lease-purchase contract.
Thus, the maximum guarantee sum for an off-plan housing project shall not exceed the sum of amounts which the investor is allowed to receive in advance from the buyer.
At the same time, based on Article 57 of the 2014 Law on Real Estate Trading in Vietnam stipulating the amount that the investor is allowed to receive from the buyer as follows:
Payment for off-the-plan real estate sale or lease purchase
1. The off-the-plan real estate sale or lease purchase shall be paid by installments, the initial installment do not exceed 30% of the agreement value, the next installments shall be conformable with real estate construction progress provided that total installment does not exceed 70% of the agreement value if the building has been not transferred to clients; if the seller or the lessor is a foreign-invested enterprise, the total installment does not exceed 50% of the agreement value.
If the buyer or the lessee has been not granted the Certificate of land, ownership of land and property on land, the seller or the lessor shall not collect payment not exceeding 95% of the agreement value from the buyer or the lessee; the remaining value shall be paid when the buyer or the lessee is granted the Certificate of land, ownership of land and property on land by competent agencies.
2. The investor must use the option fee given by clients for proper purpose as committed.
Thus, the off-the-plan real estate sale or lease purchase shall be paid by installments, the initial installment do not exceed 30% of the agreement value, the next installments shall be conformable with real estate construction progress provided that total installment does not exceed 70% of the agreement value if the building has been not transferred to clients; if the seller or the lessor is a foreign-invested enterprise, the total installment does not exceed 50% of the agreement value.
The amount of the guarantee will be based on the amount the investor is allowed to receive from the buyer.
Can I get back my deposit on off-plan housing if the investor fails to transfer it on schedule as committed?
Pursuant to Clause 3, Article 56 of the 2014 Law on Real Estate Trading in Vietnam stipulating as follows:
Guarantee on off-plan housing sale or lease purchase
.....
3. If the investor fails to transfer the housing on schedule as committed and at the request of the buyer or lessee, the guarantor shall make a refund of the option fee and other payments to clients under agreement on housing sale or lease purchase and signed guarantee agreement.
Thus, if the investor fails to transfer the building on schedule as committed and at the request of the buyer or lessee, the guarantor shall make a refund of the option fee and other payments to clients under agreement on housing sale or lease purchase and signed guarantee agreement.
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