When is the off-the-plan apartment building for sale in Vietnam? How much does it cost for initial installment to buy an off-the-plan apartment in Vietnam?

When is the off-the-plan apartment building for sale in Vietnam?

My wife and I are working in Ho Chi Minh City, my husband and I have contributed an amount of money planning to buy an apartment. I see there are many apartment construction projects that are allowed to be sold. So please ask, when is the apartment building investor allowed to sell the apartment?

Reply:

In Article 55 of the Law on Real Estate Business 2014, requirements in terms of off-the-plan real estate to be put on the market are 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

In addition, the Law also stipulates that 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 scope, requirements, content and guarantee fee shall be agreed by contracting parties but must ensure the provisions of law.

The Law on Real Estate Business 2014 also stipulates:

The off-the-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.

Thus, in order for a house to be an apartment building to be put on market, the project on the construction of that apartment building has been granted a certificate of land use right, project documents, construction drawing design, and construction permit, acceptance documents according to the project progress approved by the competent authority, have a record of the completion of the foundation of the building and approved by the competent authority in housing management at the provincial level in Vietnam. 

How much does it cost for initial installment to buy an off-the-plan apartment in Vietnam?

My wife and I plan to buy an apartment in an off-the-plan apartment project in District 7. The project owner has consulted a lot of information for me and my wife, but because we are buying a house for the first time, we also have many questions and surprises about off-the-plan apartment projects. Therefore, I hope you can advise me on the following issues:

- At what stage must the house be built before we can buy it?

- The payment stages are divided into how many times, how much is the minimum payment for the first time? Is it mandatory to pay 50% of the contract value?

Reply:

According to the provisions of Article 55 of the Law on Real Estate Business 2014, requirements in terms of off-the-plan real estate to be put on the market:

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.

Thus, the project investor can only conduct apartment transactions when the foundation of that building has been completed. That is, you absolutely do not sign any contract when the project investor has not completed the foundation in Vietnam.

Regarding the payment schedule, comply with Clause 1, Article 57 of the Law on Real Estate Business 2014 as follows:

1. The off-the-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.

Therefore, when buying an off-the-plan apartment building in Vietnam, the first payment will not exceed 30% of the contract value. The investor must not ask you to pay the entire contract value before handing over the apartment to you. Therefore, you need to pay attention to the payment levels in each stage to avoid risks later.

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Rules for trading of apartment building or a mix-used building in Vietnam

I am a student of Economics, but currently I am working at a real estate company. I have the following questions, I hope to receive a response. Specifically: What are regulations on rules for trading of apartment building or a mix-used building in Vietnam?

Reply:

Rules for trading of apartment building or a mix-used building are specified in Clause 2, Article 19 of the Law on Real Estate Business 2014, specifically as follows:

2. An apartment building or a mix-used building shall be sold according to the rules as follows:

a) Delimit general area, equipment and private area and equipment of owners;

b) Any buyer purchasing apartments in the apartment buildings or mixed-use buildings shall have joint rights to use the land. They shall agree about stable and prolonged use duration, or agree about land lease duration regarding lease land.

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