Some notes when buying an apartment in Vietnam

The case below is a typical example when buying and selling an apartment. Through judgment, it is possible to know more useful information for those who are about to buy an apartment.

In Judgment 391/2017/DS-ST dated September 29, 2017 on the dispute over the apartment purchase and sale contract between plaintiff Mr. Phan Cao T and Ms. Hoang Thi Ngoc T, defendant Investment and Development Joint Stock Company KG real estate, specifically:

"On March 20, 2013, Mr. Phan Cao T and Ms. Hoang Thi Ngoc T signed with KG Real Estate Development and Investment Joint Stock Company a contract to buy and sell apartments. The apartment area is 60.4 m2, and the price of the apartment is 828,286,884 VND. The deadline for handing over the apartment is expected to be in the fourth quarter of 2013 but not later than 03 months.

Mr. T and Ms. T have paid for the apartment to KG Company according to the agreement. As of April 1, 2014, Mr. T and Ms. T have paid KG Company 579,800,819 VND. However, on November 18, 2015 KG Company just handed over the apartment to Mr. T, Mrs. T. Since the date of handing over the apartment until now, KG Company has not carried out the procedures for the housing authority. competent country to grant certificates of apartment ownership to Mr. T, Mrs. T".

The People's Court of District 10, Ho Chi Minh City has issued a decision forcing KG Real Estate Development and Investment Joint Stock Company to pay Mr. Phan Cao T and Ms. Hoang Thi Ngoc T the interest due to delay in handing over the apartment. At the same time, the KG company must carry out procedures for the competent State agency to grant the certificate of apartment ownership to Mr. T, Mrs. T.

Through the case, when buying an apartment, we need to pay attention to the following things:

Firstly, in the apartment sale and purchase contract, there must be provisions on fines and compensation for damage when the handover schedule is delayed.

According to the provisions of Article 16 of  the Law on Real Estate Trading of Vietnam as follows:

Article 16. Payment in real estate transactions

1. The payment for real estate transactions shall be agreed by contracting parties and followed the regulations of laws on payment.

2. Penalties and compensation for damage caused by late payment from the buyer, transferee, lessee, or renter, or late real estate transfer from the seller, transferor, or lessor shall be agreed by contracting parties and stated in the agreement.

Only when the apartment purchase and sale contract has provisions on fines and compensation for damage, the investor is obliged to pay fines and compensate for damage. Mr. T, Mrs. T and KG Company have agreed and recorded in the contract the terms of fines and compensation, Therefore, the Court has enough grounds to force Kg Company to pay the interest arising from the delay in handing over the apartment.

Secondly, the investor of a real estate trading project is responsible for carrying out procedures for a competent state agency to issue a certificate of land use right, ownership of houses and other assets attached to land to the buyer.

Clause 4, Article 13 of the Law on Real Estate Trading stipulates the responsibilities of the investor of a real estate business project as follows: “Apply for Certificate of land, ownership of houses and property on land granted to the buyer or the renter and issued by competent agencies within 50 days from the day on which the house or the building is transferred to the buyer or from the deadline of lease purchase, except that the buyer or the renter requests in writing that they shall apply themselves for the Certificate."

Thirdly, the buyer is entitled to receive interest in case the investor has not yet executed the judgment

In the event of a dispute that has been decided by the Court, from the effective date of the Judgment and a petition for judgment enforcement is filed, if the investor has not yet paid the interest arising from the delay in handing over the apartment, the investor must also pay the interest monthly at the interest rate specified in Clause 2, Article 468 of the 2015 Civil Code of Vietnam, corresponding to the time of the judgment not being executed.

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