Time and forms of funding contribution for reconstruction of apartment buildings in Vietnam from August 1, 2024

Time and forms of funding contribution for reconstruction of apartment buildings in Vietnam from August 1, 2024​ (Image from the Internet)

On July 25, 2024, the Government of Vietnam issued Decree No. 98/2024/ND-CP guiding the Housing Law 2023 on the renovation and reconstruction of apartment buildings in Vietnam.

1. Time and forms of funding contribution for reconstruction of apartment buildings in Vietnam from August 1, 2024

According to the provisions of Article 43, Decree No. 98/2024/ND-CP, the time and form of funding contribution for reconstruction of apartment buildings in Vietnam are as follows:

The funding contribution of funds to rebuild apartments, as stipulated in Article 42, Decree No. 98/2024/ND-CP, shall be executed either according to the project's progress or paid in one lump sum after the handover of the apartment as follows:

+ In the case of funding contributions according to the project's progress, the funding contributions shall follow the payment regulations for future housing and construction purchase, lease-purchase as prescribed by real estate business law, and must be specifically stated in the purchase, lease-purchase contract for housing, and construction.

+ In the case of one-time funding contributions after the handover of the apartment, the owner is responsible for paying the full amount agreed upon in the purchase, lease-purchase contract signed with the project investor.

+ The funding contribution amount stipulated in Clause 1, Article 43 of Decree No. 98/2024/ND-CP does not include the maintenance cost of the apartment building, management, and operation costs as prescribed.

- The form of funding contributions as stipulated in Clause 1, Article 43, Decree No. 98/2024/ND-CP shall be implemented according to real estate business law.

Regarding the maintenance and management costs of the apartment building, the apartment owner shall comply with the housing law's regulations.

2. Principles for funding contribution to reconstruction of apartment buildings in Vietnam

The principles for funding contribution to reconstruction of apartment buildings in Vietnam are specifically stipulated in Article 42, Decree No. 98/2024/ND-CP as follows:

- Apartment owners not falling under the old apartments stipulated in Clause 10, Article 2 of Housing Law 2023 must contribute funds to rebuild the new apartments according to Clause 2, Article 42 of Decree No. 98/2024/ND-CP.

- The fund funding contribution for reconstruction of apartment buildings in Vietnam shall be implemented under the following principles:

+ For the apartment area in the apartment building, apartment owners contribute funds according to the new rehousing apartment usage area stated in the compensation, rehousing plan multiplied (x) by the newly constructed housing price calculated on the project's total investment agreed upon by the parties at the time of forming the compensation, rehousing plan.

+ For areas other than apartments, the owners contribute funds according to the principle stipulated in Point a, Clause 2, Article 42 of Decree No. 98/2024/ND-CP to continue the service, commercial business objectives according to the project's investment policy approved content.

- If the apartment owners or owners of other areas do not contribute funds as stipulated in Clause 2, Article 42 of Decree No. 98/2024/ND-CP, they shall be compensated according to the provisions of Article 44 of Decree No. 98/2024/ND-CP.

For further information, refer to Decree No. 98/2024/ND-CP which comes into force in Vietnam from August 1, 2024.

Decree No. 69/2021/ND-CP on the renovation and reconstruction of apartment buildings in Vietnam will cease to be effective from the effective date of Decree No. 98/2024/ND-CP.

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