When selling an off-the-plan house, does an investor have to be guaranteed by a bank in Vietnam?

When selling an off-the-plan house, does an investor have to be guaranteed by a bank in Vietnam?

I plan to buy an off-the-plan house, specifically an apartment. Let me ask, when buying this apartment house, is it required to have a bank to guarantee it? Because the risk is very high, please advise, thank you!

Reply:

Pursuant to Article 56 of the Real Estate Business Law 2014, guarantee on off-the-plan building sale or lease purchase is 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, based on the above regulations in Vietnam, when you buy an off-the-plan apartment building, a bank is required to guarantee the investor. Therefore, if the investor does not hand over the house on schedule, the guarantor, the bank, must be responsible for refunding the advance payment and other amounts according to the contract.

When selling an off-the-plan house, does an investor have to be guaranteed by a bank in Vietnam? (Image from the Internet)

Does selling an off-the-plan house require confirmation from the investor in Vetnam?

If an individual buys an off-the-plan house, that house has not yet been formed but wants to sell it to another individual, does that sale require the consent of the investor? Look forward to receiving your feedback.

Reply:

In Clause 1, Article 59 of the Real Estate Business Law 2014, it is stipulated:

1. The buyer or the lessee may transfer the off-the-plan building sale or lease purchase agreement if the application for the Certificate of land, ownership of land and property on land granted to the buyer or the lessee has been not sent to competent agencies. The transfer of off-the-plan building sale or lease purchase agreement must be made in writing and certified by the investor.

2. The agreement transferee may retain rights and obligations of the buyer or the lessee. The investor must enable contracting parties to transfer the agreement and collect no remuneration related to the agreement transfer.

3. The last agreement transferee shall be granted the Certificate of rights to use land, ownership of land property on land as prescribed in law on land.

4. The agreement transfer prescribed in this Article shall not apply to social house sale or lease purchase agreements.

5. The Government shall providing guidance on this Article.

=> Thus, according to the above regulations in Vietnam, when an individual has purchased an off-the-plan house and now transfers it to another individual, there must be confirmation from the investor in the transfer contract between the parties. 

Are investors who receive the transfer of real estate projects required to be real estate enterprises in Vietnam?

Currently, there is an investor who is selling their real estate project. Currently, my company also has idle money so it also wants to buy this project for investment. My company has not yet been licensed to do real estate enterprise. So can my company receive the transfer of the above real estate project?

Reply:

According to current law, real estate project investors are allowed to transfer all or part of the project to another investor to continue investing and doing business. The transfer of all or part of a real estate project must be approved in writing by the state agency competent to decide on investment.

The transfer of all or part of a real estate project can only be carried out when the investor of that project meets the transfer conditions specified in Article 49 of the Law on Real Estate Business 2014.

In particular, Clause 3, Article 49 of the Real Estate Business Law 2014 has the following provisions:

" Article 49. Requirements in terms of transfer of all or a portion of real estate 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.

Pursuant to the regulations cited above, the investor receiving the transfer of all or part of the real estate project must be a real estate enterprise.

Thus: For the case you provide, your company is not licensed to do real estate business. Therefore, it is not allowed to transfer all or part of the investor's real estate project in Vietnam.

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

Best regards!