If investors not transfer the building on schedule, will buyers be able to request compensation in Vietnam?

According to the regulations, what forms are Vietnamese residing abroad allowed to conduct real estate trading?

What forms are Vietnamese residing abroad allowed to conduct real estate trading? Hello, I'm Nguyen Minh Tuan, I have a relative who is currently residing in the US and is planning to conduct real estate trading. So please ask: In what forms can Vietnamese residing abroad conduct real estate trading?

Reply:

Overseas Vietnamese may conduct real estate trading in the forms specified in Clause 2, Article 11 of the Law on Real Estate Business 2014, specifically as follows:

2. Overseas Vietnamese may conduct real estate trading in the following forms:

a) Forms prescribed in Point b, d, g and h Clause 1 of this Article;

b) Build houses on land which is allocated by the State for sale, for lease, or for lease purchase;

c) Build buildings on land which is leased out or transferred in industrial parks, industrial complexes, export-processing zones, hi-tech zones, or economic zone for trading for the proper land use.

Can off-the-plan factories be sold in Vietnam?

Can off-the-plan factories be sold? My company has land for business cooperation with another company to build a factory for sale, in the process of building a factory, if I do not register ownership for the project, can I sign a contract to sell the property to other company?

Reply:

In Clause 4, Article 3 of the Law on Real Estate Business 2014, it is stipulated:

4. Off-the-plan building means any building which is under construction and has not been permitted to put into operation.

According to this regulation in Vietnam, the factory is in the process of being built by your company and the partner is an off-the-plan construction project.

For off-the-plan construction project, Article 55 of the Law on Real Estate Business 2014 stipulates requirements in terms of off-the-plan real estate to be put on the market as follows:

1. There are documents on land, project documents or construction drawing approved by competent agencies, License for construction if it is required, documents on certification of completion of technical infrastructure in equivalent to project progress; or it is required to gain the certification of completion of the foundation of the building regarding off-the-plan apartment buildings or mix-used buildings.

2. Before entering an agreement on sale or lease purchase of an off-the-plan building

Within 15 days from the day on which the notification is received, the agency in charge of housing of province shall respond in writing to the investor with the building permitted to be sold or leased purchase; if the building do not meet the requirements, they must provide explanation.

With this regulation in Vietnam, in order for an off-the-plan construction project (your company's factory under construction) to be put on the market, your company must have documents such as: Papers on land use rights, project dossiers, construction drawing designs approved by competent authorities, construction permits in case a construction permit is required, papers on acceptance of the completion of infrastructure construction corresponding techniques according to the project progress. Thus, when having these documents, your company can completely sell the off-the-plan factory.

If investors not transfer the building on schedule, will buyers be able to request compensation in Vietnam?

If the investor not transfers the building on schedule, can the buyer request compensation? Our family bought an apartment, had a full contract agreement, but near the date we received the house, the investor informed us that the delivery of the house was 15 days later than the agreement, because for some reason I don't know. My husband is not satisfied about that, because we have a taboo, and at the same time, we have made a commitment with the landlord that we are staying that on that day we will move out, the investor's delay makes our family insecure, so can I ask for compensation in this case?

Reply:

According to the provisions of Article 23 of the Law on Real Estate Business 2014, the buyer of the house has the right to request the seller to complete procedures for building sale by the deadline specified in the agreement. Or 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,...

Thus, in this case, the investor must refund the funds (if required), compensating for damage (if any) when the house is not transferred on schedule according to the contract.

At the same time, to protect the interests of buyers, in Article 56 of the Law on Real Estate Business 2014, there is guarantee on off-the-plan building sale or lease purchase as follows:

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-the-plan buildings.

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.

3. 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.

4. The guarantee on off-the-plan building sale or lease purchase shall be conformed to regulations of this Article and regulations of law on guarantee.

Thus, when the investor not transfers the building on schedule, the buyer has right to request the investor to compensate for the damage and refund the advance amount and other amounts to the buyer according to the signed house purchase and sale contract and guarantee contract.

Best regards!