Guidance on maintenance and repair of public housing not serving residential purposes in Vietnam from October 15, 2024

Guidance on maintenance and repair of public housing not serving residential purposes in Vietnam from October 15, 2024 (Image from the Internet)

On August 23, 2024, the Government of Vietnam issued Decree 108/2024/ND-CP regulating the management, use, and exploitation of houses and land as public assets not used for residential purposes, assigned to local organizations with management and house business functions.

Guidance on maintenance and repair of public housing not serving residential purposes in Vietnam from October 15, 2024

Pursuant to Article 21 of Decree 108/2024/ND-CP, maintenance, renovation, repair, new construction, upgrading, and expansion of houses, and construction works associated with land rented out as public assets not used for residential purposes, assigned to local organizations with house management and business functions in Vietnam, are regulated as follows:

- Maintenance is carried out in accordance with legal regulations on maintenance of constructions. The house management and business organization directly undertakes maintenance or contracts it out to a competent maintenance service provider. Selection of the maintenance service provider must comply with relevant legal regulations.

- Annually, the house management and business organization re-evaluates the condition of houses and other constructions associated with the rented land; formulates plans and cost estimates for renovations and repairs (including periodic renovation and repair costs and emergency repair costs), compiles them into the annual budget estimate, and reports to the competent authority for consolidation, appraisal, and approval as per state budget laws and relevant regulations; based on this, the house management and business organization carries out renovations and repairs as per relevant legal regulations in Vietnam.

In cases where houses, land, or constructions requiring renovation, repair, new construction, upgrading, or expansion are listed as historical relics or cultural projects that need protection according to heritage laws, the house management and business organization must seek opinions from the cultural specialized agency under the provincial People's Committee before presenting it to the competent authority for consideration and approval.

In cases where organizations or individuals renting houses prepay rent to the house management and business organization for renovation, the prepaid amount is deducted from the rent payable; if not fully deducted and the rental period is extended, it is deducted from the rent of the extended period; if the lease is not extended, the house management and business organization refunds the remaining amount.

Renovation and repair items carried out by the lessee are transferred without compensation to the house management and business organization for management and exploitation after the lease terminates (including early termination of the lease agreement).

In cases where the assigned temporary user organization advances funds to the house management and business organization for renovations or repairs, these costs are accounted into operational costs or investment costs for new construction, renovation, upgrading, or expansion of service premises as approved projects by the competent authority.

Renovation and repair items carried out by the temporary user organization are transferred without compensation to the house management and business organization for management and exploitation after the temporary usage period ends (including early return of the property).

- The house management and business organization carries out emergency repairs when construction parts or works are suddenly damaged by wind, storm, flood, earthquake, impact, fire, or other sudden factors or when parts or works show signs of deterioration affecting safety in use, operation, and exploitation.

Emergency repair costs are reasonable expenditures as per legal regulations on construction maintenance. Payment for emergency repairs is made using the emergency repair contingency costs in the renovation and repair estimate for each house or land property or by advancing rent by the lessee to the house management and business organization for payment when the assigned estimate is insufficient.

When individuals or organizations renting houses advance funds to the house management and business organization for emergency repairs, the processing of the prepaid amount is similar to the provisions in Clause 2, Article 21 of Decree 108/2024/ND-CP.

The handling of materials recovered during public property repairs (if any) is according to the Government of Vietnam’s decree detailing a number of articles of the 2017 Law on Management and Use of Public Property.

- The formulation, appraisal, approval of projects, plans, cost estimates, and implementation of new construction, upgrading, expansion of houses, and constructions associated with the land rented out are governed as per relevant legal regulations.

More details can be found in Decree 108/2024/ND-CP, which comes into force in Vietnam from October 15, 2024.

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