Latest conditions for transfer of real estate project in Vietnam

Latest conditions for transfer of real estate project in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. What is a real estate project under the law in Vietnam?

According to Clause 3, Article 3 of the Law on Real Estate Business 2023:

“real estate project” refers to a construction investment project that is established for trading of housing, buildings or rights to use land that already has infrastructure and approved by a competent authority in accordance with regulations of law. Real estate projects include:

- Housing construction investment projects;

- Urban area construction investment projects;

- Rural residential area construction investment projects;

- Projects on investment in and construction of buildings used to serve education, healthcare, sports, culture, office, trade, service provision, tourism, accommodation or industrial purpose, and multipurpose buildings;

- Technical infrastructure construction investment projects;

- Projects on investment in and construction of infrastructure facilities of industrial parks, industrial clusters or hi-tech zones.

2. Conditions for transfer of entire or partial real estate project in Vietnam

Pursuant to Article 40 of the Law on Real Estate Business 2023, conditions for transfer of entire or partial real estate project are prescribed as follows:

(1) A real estate project to be transferred must meet the following conditions:

- The investment guidelines for the project or the investment in the project has been decided or approved by a competent authority; the project investor has been selected or certified, if procedures for certification of the project investor are required;

- A detailed planning for the project has been approved in accordance with regulations of the Construction Law and the Law on Urban Planning;

- The compensation and support for resettlement in respect of the project or its part to be transferred have been completed. In case the entire project on construction of infrastructure facilities is transferred, the construction of corresponding technical infrastructure facilities must have been completed according to the approved schedule, design and detailed planning in accordance with regulations of the Construction Law, the Law on Urban Planning, and contents of the approved project in accordance with regulations of the Construction Law;

- Rights to use land of the project or its part to be transferred are not in any dispute which has been notified, handled or is under consideration by a competent authority or such LURs only involve in disputes which have been completely resolved under sentences, decisions or judgments which have taken legal effect; such LURs are not distrained to serve judgment enforcement; are not banned from trading as prescribed by law; and are not suspended from trading as prescribed by law;

- There is no decision to suspend or terminate operation of the project or decision on land expropriation given by a competent authority. If the project or its part to be transferred involves in an administrative violation, the project investor must have implemented the decision to impose administrative penalties issued by a competent authority in accordance with regulations of the Law on Penalties for Administrative Violations;

- In case the project is being mortgaged as collateral to serve the fulfillment of obligations as prescribed by law, procedures for collateral release must be followed;

- The project duration is not yet expired;

- If a part of the real estate project is transferred, work items or their use or business purposes of that part must be independent from those of the remaining part of the project.

(2) The transferee of the entire or partial real estate project must satisfy the requirements laid down in clauses 1 and 2 Article 9 of the Law on Real Estate Business 2023, and covenant to continue construction and operation of the received partial or entire project according to approved contents of the project. If there are any changes in such approved contents of the project, the provisions of clause 3 Article 39 of the Law on Real Estate Business 2023 shall apply.

(3) The transferor has been issued by a competent authority with a decision on land allocation, land lease or land repurposing for implementing the project; has fulfilled land-related financial obligations, including land levy, land rent and other relevant taxes, fees and charges (if any), towards the State in respect of the land area used for implementing the project or its part to be transferred without requiring certificate of LURs as prescribed by the Land Law.

(4) In addition to the conditions set out in clauses (1), (2) and (3), the transferor that is a state-owned enterprise must also comply with regulations of law on management and utilization of state capital invested in manufacturing and business activities of enterprises.

(5) In addition to the conditions set out above, the transfer of entire or partial real estate project must also meet other conditions set out in the Investment Law and relevant laws.

3. Rules for transferring entire or partial real estate project in Vietnam

According to Article 39 of the Law on Real Estate Business 2023, rules for transferring entire or partial real estate project include:

- A real estate project investor is entitled to transfer a part or whole of the project to another investor to continue investment in, construction and operation of the project for the period approved by a competent authority.

- The transfer of entire or partial real estate project does not cause any change to the planning or project objectives; must ensure legitimate rights and interests of relevant parties.

- Upon completion of transfer of entire or partial real estate project, the transferee shall inherit all rights and obligations of the project investor transferring the project and become the investor of the received project or part of project. The transferee shall not be required to re-prepare the project dossier, construction planning and re-apply for a building permit, if there are no changes in the contents of the project. If there are changes in the contents of the project, the transferee shall make corresponding adjustments in accordance with regulations of law.

- Transfer of entire or partial real estate project must meet the conditions set out in Section 2 and be bound by provisions on forms, purposes and duration of land use, and land registration set out in the Land Law.

Nguyen Ngoc Que Anh

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