Regulations on mortgage on housing investment and construction projects and off-plan housing in Vietnam

Regulations on mortgage on housing investment and construction projects and off-plan housing in Vietnam (Image from the Internet)

1. What is off-plan housing?

According to Clause 24 Article 2 of the Housing Law 2023, off-plan housing is housing currently under construction investment or has not been accepted for use according to construction law regulations.

2. Requirements for mortgage on housing investment and construction projects and off-plan housing in Vietnam

Pursuant to Article 184 of the Housing Law 2023, the requirements for mortgage on housing investment and construction projects and off-plan housing in Vietnam are as follows:

- In the case where a housing investment project investor mortgages part or all of the housing investment project, they must have the project dossier, the project's technical design approved, and have a certificate or land allocation decision, land lease decision from the competent state agency;

- In the case where a housing investment project investor mortgages off-plan housing in the project, in addition to the conditions stipulated in Point a Clause 1 Article 184 of the Housing Law 2023, the mortgaged housing must be in the situation where the foundation has been completed according to construction law regulations and not be part of the project or the entire project that the housing investment project investor has mortgaged according to Point a Clause 1 Article 184 of the Housing Law 2023, unless the property has been released from mortgage;

- In the case where an organization or individual mortgages off-plan housing on their lawful residential parcel, they must have documents proving land use rights as prescribed by land law and a construction permit if required.

In the case where an organization or individual mortgages off-plan housing purchased from the housing investment project investor, they must have a housing purchase contract signed with the housing investment project investor, a contract transfer document in case of contract transfer, documents proving payment for the housing according to the purchase contract payment schedule, and no ongoing disputes, complaints, or lawsuits regarding the purchase contract or the contract transfer document as prescribed by the dispute resolution, complaint, and denunciation law.

3. Regulations on mortgage on housing investment and construction projects and off-plan housing in Vietnam

- The housing investment project investor is allowed to mortgage part or all of the project or mortgage housing constructed in the project at credit institutions operating in Vietnam to secure loans for the investment in the project or the construction of the housing; the mortgage must include both land use rights.

- In the case where a housing investment project investor has mortgaged part or all of the project or housing and needs to mobilize capital according to housing law or needs to sell, lease-purchase the housing, they must release the mortgage on part or all of the project or housing and land use rights before signing capital contribution contracts, sale, or lease-purchase contracts with customers, except as specified in Point b Clause 3 and Point a Clause 4 Article 88 of the Housing Law 2023.

The determination that the housing has been released from mortgage prior to signing the sale or lease-purchase contract with customers, as specified in Clause 2 Article 183 of the Housing Law 2023, is clearly stated in the notice of eligible housing for sale issued by the provincial housing management agency where the housing is located. The investor is responsible for providing customers with the notice of eligible housing for sale when signing the sale or lease-purchase contract. In the case of capital contribution, the investor must provide the capital contributor with the mortgage release document from the credit institution when signing the capital contribution contract.

- Organizations and individuals constructing off-plan housing on their lawful residential parcels, organizations, and individuals purchasing off-plan housing in a housing investment project from the housing investment project investor are allowed to mortgage this housing at credit institutions operating in Vietnam to secure loans for construction or for purchasing, upgrading, or repairing the housing.

(As per Article 183 of the Housing Law 2023)

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