Vietnam: What is the deadline for handover of apartments from the date of purchase? Is it required to pay compensation for damage in case of delay in handing over apartments?
What is the deadline for handover of apartments from the date of purchase in Vietnam?
Pursuant to Article 124 of the 2014 Law on Construction supplemented by Point a, Clause 46, Article 1 of the Law on Amendments to Law on Construction 2020 on the handover of construction works in Vietnam as follows:
- The handover of construction works must comply with the following provisions:
+ Construction works have been pre-acceptance tested in accordance with the construction law;
+ Safety is ensured in the operation and exploitation when the works are put into use.
+ For urban area construction investment projects, all or some works of the project may be handed over for putting into use provided that the construction investment must be completed before the handover to ensure the synchronization of technical and social infrastructure systems according to the investment phasing and approved construction designs, and their connection to the regional technical infrastructure and conformity with the approved project contents and planning.
- Project owners shall receive works according to contracts signed with contractors. Persons taking part in the handover of works shall take responsibility for products certified by them in the course of handover. If they are not use managers of works, project owners shall hand over works to use managers after organizing the pre-acceptance test of the works. The handover of construction works shall be recorded in writing.
Based on the above regulations, the apartments to be handed over must comply with the following conditions:
- Apartments have been pre-acceptance tested in accordance with the construction law;
- Safety is ensured in the operation and exploitation when apartments are put into use.
Thus, the law does not specify the deadline for handover of apartments from the date of purchase in Vietnam. The deadline for handover of apartments will comply with the agrement concluded with the contractors.
Particularly in case the investor is not concurrently the manager of the use of the apartment, the investor is responsible for handing over the apartment to the owner for managing the use of the apartment after organizing the acceptance test of the construction work.
If investors are not managers of apartments, apartment owners shall hand over apartments to use managers after organizing the pre-acceptance test of the apartments.
The handover of apartments shall be recorded in writing.
Currently, apartments must be handed over before or on time under the agrement concluded.
However, in fact, there are still apartment projects where there is a delay in handing over apartments to customers. In this case, the investor must notify about the delay in handing over.
Is it required to pay compensation for damage in case of delay in handing over apartments in Vietnam?
Pursuant to Article 22 of the Law on Real Estate Trading 2014, the investor has the following obligations:
- Hand over the building to the buyer by the deadline with quality and other conditions as specified in the agreement; transfer the Certificate of land, ownership of land and property on land and related documents under the agreement.
- Pay compensation for damage caused by the seller
Thus, in case the seller or the investor is late in handing over the apartment, they may be fined and compensated for damage (if any damage is caused).
Accordingly, in case the investor delays in handing over houses, he/she may face administrative penalties according to the provisions of Point b, Clause 1, Article 14 of Decree 16/2022/ND-CP.
- A fine ranging from VND 80.000.000 to VND 100.000.000 shall be imposed on delay in handing over apartments.
In case the investor, owner or management and operation unit fails to adequately and promptly transfer approved structure maintenance procedures to structure owners or entities managing, utilizing the structure, pursuant to Point dd Clause 2 Article 20 of the Decree 16/2022/ND-CP, they will be fined from 30-40 million VND.
Accordingly, the above fine applies to organizations. In case of individuals, the fine is 1/2 of that of organizations,
What is the compensation for damage in case of delay in handing over apartments in Vietnam?
Pursuant to Clause 4, Article 23 of the Law on Real Estate Trading 2014, the apartment buyers have the right to request the seller to Pay compensation for damage caused by the building are not transferred on schedule with quality and other commitment specified in the agreement.
According to the provisions of Article 434 of the Civil Code 2015, the seller may only deliver the property prior to the time limit with the consent of the buyer.
Thus, at the end of the deadline for handing over the house as agreed upon or prescribed by law, in case the seller has not yet fulfilled the handover obligation, it is considered as delay the handover.
The investor's delay in handing over the house falls into the case of late performance of obligations as prescribed in Article 353 of the Civil Code 2015 and must bear the following compensations:
- The late handover party must compensate for all damage caused by the breach of contractual obligations as agreed in the contract. Damage is determined to include both material damage and mental damage according to the provisions of Article 360, Article 361, and Article 419 of the Civil Code 2015.
- The party who is late in handing over the house and land shall also be subject to penalties for violations according to the concluded agreement. The fine level for violation shall be agreed upon by the parties in the concluded agreement according to Article 418 of the Civil Code 2015.
In addition, in case the investor refuses or does not settle the compensation claim, it can initiate a lawsuit to a competent court to request settlement.
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