What are conditions for real estate projects to be transferred in Vietnam?

What are conditions for real estate projects to be transferred in Vietnam?

I learned that real estate projects are allowed to be transferred, so please ask: When is real estate projects allowed to be transferred? Look forward to your feedback.

Reply:

According to Article 49 of the Law on Real Estate Business 2014, requirements in terms of transfer of all or a portion of real estate project are as follows:

1. The transferred real estate project shall meet the following requirements:

a) The project is approved by competent agencies; there is a specific planning 1/500 or general ground planning which is approved;

b) The compensation or site clearance of the transferred project or a portion of the transferred project has been finished. Regarding transfer of all infrastructure construction projects, the technical infrastructure must be completed equivalent to schedule as specified in the approved project;

c) The land in the project is not disputed or distrained by a competent agency

d) There is no decision on project or land revocation conducted by a competent agency; in case there is any violation during the progress of the project, the investor must abide by the decision on penalty.

2. The transferor has a Certificate of land regarding all or a portion of the transferred project.

3. The transferee must be a real estate enterprise, acquire financial competence and commit to keep conducting the business as prescribed in regulations of law and ensure that the project is conducted under proper progress and plan.

*Conditions of the transferor:

- The transferor has a Certificate of land regarding all or a portion of the transferred project.

*Conditions of the transferee:

- The transferee must be a real estate enterprise, acquire financial competence and commit to keep conducting the business as prescribed in regulations of law and ensure that the project is conducted under proper progress and plan.

The above are conditions for real estate projects to be transferred in Vietnam.

What issues should I pay attention to when buying a housing project in Vietnam?

I plan to buy an off-the-plan apartment. I learned that buying an off-the-plan house faces many risks. So please ask when buying an off-the-plan house, what issues should I pay attention to? Looking forward to hearing from you soon. Thank you very much!

Minh Hien - hien********@gmail.com

Reply:

Legal basis: Law on Real Estate Business 2014

1. Project investor

- First of all, it is necessary to determine that the investor must satisfy all conditions for real estate business as shown on the investor's business registration certificate, in which the real estate business line must be included.

- Before selling or leasing-purchase off-the-plan houses, the investor must notify in writing the provincial-level housing management agency that the house is eligible for sale or lease-purchase.

- Before the real estate project investors sell, lease-purchase off-the-plan houses, they must be guaranteed by a commercial bank that is capable of performing the financial obligations of the investor to the customer when the investor does not hand over the house according to the schedule committed to the customer.

==> Therefore, if you want to buy an off-the-plan house, you need to find out the above information for the project investor. Does the investor meet the conditions for real estate business? Has the future housing project been notified to the provincial housing authority? Which bank guarantees the investor's financial obligations if the off-the-plan housing project is formed? These are the minimum information that you need to learn about the investor to avoid the risk of buying off-the-plan houses.

2. Requirements in terms of off-the-plan real estate to be put on the market

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.

3. Payment for off-the-plan real estate sale or lease purchase

- 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.

Besides, as a buyer, you also need to know about your rights in the off-the-plan house purchase and sale contract: have the right to request the seller to provide information on the progress of construction investment, the use of advance money and actual inspection at the construction site in Vietnam.

Have the right to transfer the off-the-plan house purchase and sale contract when the application for the Certificate of land use rights and ownership of houses and other land-attached assets has not yet been submitted to a competent state agency in Vietnam.

We hope that our advice will help solve your problems.

Is it possible to transfer a real estate project without a land use right certificate in Vietnam?

In case my company invests in a real estate project on land allocated by the State with land use levy collection but has not yet been granted a land use right certificate for the entire above project. But for some reason, can my company transfer the above project to another investor?

Reply:

According to current law, real estate project investor may transfer all or a portion of a project to another investor for business.

The transfer of all or a portion of a real estate project may only be made when all the transfer conditions are satisfied as prescribed in Article 49 of the Law on Real Estate Business 2014.

When carrying out the transfer of all or a portion of a real estate project, the parties to the contract must ensure the principles of transfer as prescribed in Article 48 of the Law on Real Estate Business 2014.

In there: 

- Clause 3, Article 48 of the Law on Real Estate Business 2014 provides as follows:

Article 48. Rules for transfer of all or a portion of real estate project

3. The transfer of all or a portion of real estate project shall be approved in writing by competent agencies. The investor (transferee) may be granted the Certificate of land, ownership of land and property on land or may register the adjustments in the Certificated granted to the transferor as prescribed in law on land.

- On the other hand, Clause 2, Article 49 of the Law on Real Estate Business 2014 also stipulates:

2. The transferor has a Certificate of land regarding all or a portion of the transferred project.

Pursuant to the above-cited regulations in Vietnam, the real estate project investor may only transfer all or a portion of the real estate project when it has obtained a certificate of land use right for all or a portion of the transferred project and meets other transfer conditions as prescribed by law.

Thus: For the case that you provide to us, your company is the investor of a real estate project but has not been granted a certificate of land use rights for the entire real estate project. Therefore, at the present time, the investor does not meet the conditions to transfer the real estate project in Vietnam.

Above is our consulting opinion on the issue you are wondering.

Best Regards!