The Government of Vietnam issued Decree 69/2021/ND-CP on renovation and reconstruction of apartment buildings which takes effect from September 1, 2021. In particular, the new regulation on compensation that apartment owners receive when the apartment they live in is renovated and rebuilt.
Article table of contents
Specifically, according to Article 21 of Vietnam's Decree 69/2021/ND-CP, based on specific conditions of projects in each region, People’s Committees of provinces shall decide on compensation coefficient k which ranges from one to two times usable area of original flats specified in certificate issued from time to time or area eligible for issuance of certificate as the basis for project developers to prepare compensation solutions. In case area other than those acknowledged in the certificate or other than area eligible for issuance of certificate is present, proceed according to regulations and law. Area of relocation flats calculated according to k coefficient above shall be converted to monetary value and specified under compensation solutions and serve as the basis for determining value of contracts for purchasing, leasing purchase of relocation houses and obligations for settling different value of parties (if any).
In case owners of the first floor who spend house area for business before effective date of Vietnam's Decree 69/2021/ND-CP and projects allocate some area for service and commercial businesses as per approved planning, apart from compensation under this Point, if owners wish to, they may purchase or rent part of commercial floor area for business purposes; sale price of such area shall be calculated by adding construction investment costs distributed over 1 m2 of commercial floor area with 10% of norm interest as per the law; rental price for commercial area shall be agreed upon by parties;
In case value of relocation flats is greater than that of original flats after being converted by coefficient k according to Point a of this Clause, parties shall sign purchase or lease purchase agreements for relocation houses and submit additional amount to make up for the difference, if owners do not purchase or lease purchase, they shall not be relocated but instead compensated in form of money as per the law.
In case value of relocation flats is smaller than that of original flats after being converted by coefficient k according to Point a of Clause 21, project developers must pay owners the difference;
In case apartment owners do not wish to perform in-situ relocation and project developers have house and land area in other locations for relocation where the owners wish to relocate to, the owners shall be relocated.
In case apartment owners do not wish to relocate, they shall receive compensation in form of money based on value of compensation flats after being converted by coefficient k.
Assignment of temporary residence for apartment owners and inhabitants during implementation period of apartment renovation and reconstruction projects must be identified in compensation solutions as follows:
+ In case owners manage their residence, project developers are responsible for incurring rent and other costs (if any) during project implementation period according to approved compensation solutions.
+ In case owners cannot manage their residence, People’s Committees of provinces in Vietnam where the projects take place are responsible for taking charge and cooperating with project developers in assigning temporary residence for owners.
Bao Ngoc
- Key word:
- Decree 69/2021/ND-CP of Vietnam
