What is the validity period of a guarantee contract for off-plan houses? What are the contents of a guarantee contract for off-plan houses?
What are the regulations on the validity period of the guarantee contract for off-plan houses?
A guarantee contract for an off-plan house as prescribed in Clause 13 of Circular 11/2022/TT-NHNN of Vietnam is an agreement to grant a guarantee between a commercial bank and the investor and other related parties (if any) on the commercial bank's approval of guarantee for investors in the sale, lease-purchase of off-plan houses.
Pursuant to the provisions of Point a, Clause 5, Article 13 of Circular 11/2022/TT-NHNN of Vietnam, the validity period for a guarantee contract for an off-plan house is as follows:
5. Validity period and contents of a guarantee contract for an off-plan house:
a) The contract of guarantee for the off-plan house takes effect from the time of signing until the guarantee obligation of all guarantee letters for the buyer expires according to the provisions of Article 23 of this Circular and all obligations of the investor to the commercial bank under the guarantee contract for the off-plan house have been completed;
At the same time, Clause 2, Article 20 of Circular 11/2022/TT-NHNN of Vietnam stipulates the validity period of the guarantee agreement as follows:
Validity period of guarantee commitment, guarantee grant agreement
1. The validity period of a guarantee commitment is determined from the time of issuance of the guarantee commitment or after the time of issuance of the guarantee commitment as agreed by the related parties to the time of expiration of the guarantee commitment specified in Article 23 of this Circular.
2. The validity period of the guarantee agreement shall be agreed upon by the parties but must be at least equal to the validity period of the guarantee commitment.
3. In case the expiry date of the guarantee commitment or the guarantee agreement is on a holiday, public holiday or New Year, the expiration date shall be carried over to the next working day.
4. The extension of the validity period of the guarantee commitment or the agreement on granting a guarantee shall be agreed upon by the parties in accordance with relevant laws.
Thus, a guarantee contract for an off-plan house takes effect from the time the contract is signed until the parties fulfill their obligations in the contract of guarantee for an off-plan house.
What is the validity period of a guarantee contract for off-plan houses? What are the contents of a guarantee contract for off-plan houses? (Image from the Internet)
What are the contents of a guarantee contract for off-plan houses?
Pursuant to the provisions of Point b, Clause 5, Article 13 and Clause 2, Article 15 of Circular 11/2022/TT-NHNN of Vietnam on the contents of a guarantee contract for an off-plan house as follows:
- Applicable law. In case the applicable law is not specified, it is understood that the parties agree to apply according to the provisions of Vietnamese law;
- Information about the parties when entering into the guarantee contract
- Guaranteed obligations
- Guarantee amount, guarantee currency
- Form of issuing guarantee commitment
- Conditions for performance of guarantee obligations
- Rights and obligations of the parties
- Guarantee fee
- Agreement on compulsory payment of debt on behalf of, interest rate applicable to the amount paid on behalf of, and obligation to repay debt upon performance of guarantee obligations.
- Number, signing date, validity of the guarantee agreement
- Resolving disputes that arise
- The commercial bank is obliged to issue a letter of guarantee to the buyer when receiving the house purchase or lease purchase contract sent by the investor before the time limit for delivery or receipt of the house according to the commitments specified in the purchase contract, rent-purchase housing
- The commercial bank and the investor shall specifically agree on whether the commercial bank or the investor is obliged to send a letter of guarantee to the buyer after the commercial bank issues the letter of guarantee.
- Financial obligations of the investor
- Documents sent by the buyer to the commercial bank requesting fulfillment of the guarantee obligation must be enclosed with the letter of guarantee issued by the commercial bank to the buyer.
- Other contents not contrary to the provisions of law.
How much is the guarantee amount for off-plan houses?
According to the provisions of Clause 7 Article 13 of Circular 11/2022/TT-NHNN of Vietnam on guarantee money for houses to be formed in the future as follows:
Guarantee for off-plan houses
...
7. The maximum amount of guarantee for an off-plan housing project is equal to the total amount the investor is allowed to receive in advance from the buyer as prescribed in Article 57 of the Law on Real Estate Business and other amounts other (if any) under the housing purchase or lease purchase contract.
According to the regulations, the amount of money the investor is allowed to receive in advance is specified in Article 57 of the 2014 Law on Real Estate Business of Vietnam as follows:
Payment for off-plan real estate sale or lease purchase
1. The off-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.
Circular 11/2022/TT-NHNN of Vietnam issued by the State Bank of Vietnam takes effect from April 1, 2023.
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