Vietnam: Is it allowed to sell off-plan social housing in case there are dossiers on a residential construction project?
Is it allowed to sell off-plan social housing in Vietnam in case there are dossiers on a residential construction project?
Pursuant to Clause 2, Article 63 of the 2014 Law on Housing as follows:
Social housing sale, lease, or lease purchase
1. The investor in the project for social housing construction may decide whether to sell, lease and sell off-the-plan housing or sell existing housing.
2. The transactions in the sale or lease purchase of off-the-plan social housing must meet the requirements below:
a) There are dossiers on a residential construction project; there are an approved housing technical design and a construction permit if applicable;
b) In the residential area for sale or lease purchase, the foundation of the house has been completed as prescribed in law on construction, the system of roads, water supply and drainage, electricity has been completed in conformity with the approved specific planning for construction, design documents and rate of progress; the mortgage on the house (if any) has been paid off, unless otherwise agreed by the buyer/lessee and the lender;
c) The housing authority of province has issued the notification of housing conformable to sale, except for social housing invested by the State using capital resources prescribed in Clause 1 Article 53 of this Law.
3. The transactions in lease, sale or lease purchase of existing social housing must meet requirements below:
a) In the residential area for lease, lease purchase, or sale, the technical and social infrastructure has been completed in conformity with the approved specific planning for construction, design documents and rate of progress; the mortgage on the house (if any) has been paid off, unless otherwise agreed by the buyer/lessee and the lender;
b) The housing authority of province has issued the notification of housing conformable to sale, lease, or lease purchase, except for social housing invested by the State using capital resources prescribed in Clause 1 Article 53 of this Law;
c) The housing satisfies requirements prescribed in Point b and Point c Clause 1 Article 118 of this Law.
4. The invest may not conclude any agreement on off-the-plan social housing lease; regarding the housing satisfying requirements prescribed in Point a and Point b Clause 2 of this Article, the investor may only conclude an agreement on deposit and collect the lease deposit for not exceeding 12 months of provisional housing rents; the agreement on deposit must comply with requirements pertaining to entities and social housing lease as prescribed in this Law. If the house satisfies all requirements as prescribed in Clause 3 of this Article, the investor is entitled to conclude the agreement on housing lease with the contractual party of the agreement on deposit.
5. The advance paid by the social housing buyer prescribed in this Article shall conform to agreement on housing sale, approved floor space completed of the residential building and rate of progress provided that the total amount of advance paid by the buyer does not exceed 70% of the house's value which is determined before it is transferred and does not exceed 95% of the house’s value before the buyer is granted the Certificate.
6. The Government shall provide guidance on proven documents on entities and requirements for benefiting from policies on social housing; building or buying commercial housing for using social housing; type of housing and social housing area standards; the tax reduction and loan capital incentives given to social housing for lease; the lease, lease purchase, sale and management of social housing.
Thus, according to the above provisions, the conditions for off-plan social housing sale are:
- There are dossiers on a residential construction project; there are an approved housing technical design and a construction permit if applicable;
- In the residential area for sale or lease purchase, the foundation of the house has been completed as prescribed in law on construction, and the system of roads, water supply, drainage, and electricity has been completed in conformity with the approved specific planning for construction, design documents and rate of progress; the mortgage on the house (if any) has been paid off unless otherwise agreed by the buyer/lessee and the lender;
- The housing authority of the province has issued the notification of housing conformable to sale, except for social housing invested by the State using capital resources prescribed in Clause 1 Article 53 of the 2014 Law on Housing.
Thus, in case there are dossiers on a residential construction project, it is necessary to meet the above remaining conditions to be allowed to sell off-plan social housing.
What are the regulations on the management and use of social housing in Vietnam?
Pursuant to Article 64 of the 2014 Law on Housing, the management and use of social housing are as follows:
- With respect to social housing invested by capital resources prescribed in Clause 1 Article 53 of the 2014 Law on Housing; if there is only one housing-managing organization, it shall be appointed by the agency in charge of social housing; if there is more than one organization registering, the housing-managing organization shall be selected through the inviting bids.
- Regarding social housing built not by capital resources prescribed in Clause 1 Article 53 of the 2014 Law on Housing, the management of housing shall be carried out as follows:
+ With respect to social housing for lease, the investor shall manage themselves, or hire or entrust a housing-managing organization as prescribed in the 2014 Law on Housing to the management of that house;
+ With respect to social housing for lease purchase, the investor shall manage the house as prescribed in Point a of this Clause; after the lessee has paid off the total amount to the investor, the housing shall be managed as prescribed in Point c of Clause 64 of 2014 Law on Housing;
+ With respect to social housing for sale, the buyer shall manage the house themselves regarding separate housing; or comply with regulations on the management of apartment buildings as prescribed in the 2014 Law on Housing.
- The management of housing shall be provided preferential treatment similar to public services.
- The social housing-managing organization is entitled to provide other services not banned from regulations of law in the social housing area in order to reduce the fees of housing management services.
What are the procedures for the social housing lease purchase in Vietnam?
Pursuant to Article 134 of the 2014 Law on Housing, the procedures for social housing lease purchase in Vietnam are as follows:
- Any transaction in social housing lease purchase must be concluded under an agreement; regarding the lease purchase transaction in social housing which is invested by organizations or individuals, the lease purchase agreement must be concluded between the investor and the lessee; regarding the lease purchase transaction in state-owned social housing, the lease purchase agreed shall comply with Point a Clause 2 Article 83 of 2014 Law on Housing
- When the lease purchase term expires and the lessee has paid off the total amount as agreed, the lessor is required to request the competent agency to grant the Certificate to the lessee, unless the lessee wishes to apply for the Certificate himself/herself.
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