What are the penalties imposed on project developers for violation of regulation management and use of apartment buildings in Vietnam?

What are the penalties imposed on project developers for violation of regulation management and use of apartment buildings in Vietnam?
Lê Trương Quốc Đạt

What are the penalties imposed on project developers for violation of regulation management and use of apartment buildings in Vietnam? - Hoang Hai (Ca Mau)

What are the penalties imposed on project developers for violation of regulation management and use of apartment buildings in Vietnam?

What are the penalties imposed on project developers for violation of regulation management and use of apartment buildings in Vietnam? (Internet image)

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

1. What are the penalties imposed on project developers for violation of regulation management and use of apartment buildings in Vietnam?

According to Article 67 of Decree 16/2022/ND-CP, the penalties for violation of regulation management and use of apartment buildings of project developers are as follows:

- A fine ranging from VND 80.000.000 to VND 100.000.000 shall be imposed on:

+ Operating dance bars;

+ Failing to open accounts for maintenance expenditure of common areas in apartment buildings in a manner conforming to regulations and law;

+ Fail to promptly request Chairpersons of People’s Committees of communes in writing to organize apartment building meeting when the first apartment building meeting did not have enough participants as per the law;

+ Failing to adequately inform Departments of Construction where projects take place in writing about name accounts, number of accounts, credit institutions where the accounts are opened, and term of maintenance expenditure deposit;

+ Failing to produce annual maintenance plans conforming to regulations and law;

+ Failing to inform Departments of Construction where apartment buildings are located in order to monitor after maintenance expenditure has been transferred to the elected Board of directors.

- A fine ranging from VND 160.000.000 to VND 200.000.000 shall be imposed on:

+ Miscalculating maintenance expenditure of common areas of apartment buildings;

+ Failing to specify accounts for maintenance expenditure of common areas of apartment buildings in the contracts for sale, lease purchase of houses or other areas of apartment buildings;

+ Failing to make term deposit of maintenance expenditure for common areas of apartment buildings at local credit institutions where sold, purchased, or lease purchased houses are located;

+ Failing to close accounts for maintenance expenditure after transferring all maintenance expenditure to the elected Board of directors of apartment buildings;

+ Failing to publicize and disclose the use of operation expenditure, maintenance expenditure for common areas of apartment buildings;

+ Failing to transfer maintenance expenditure and interest thereof for common areas of apartment buildings in a timely, adequate manner to the right beneficiaries;

+ Choosing ineligible or incompetent entities to manage and operate apartment buildings;

+ Selling or leasing motor vehicle parking lots in apartment buildings in a manner not conforming to regulations and law.

- A fine ranging from VND 200.000.000 to VND 260.000.000 shall be imposed on project developers who:

+ Fail to reserve area to use as community houses in accordance with standards and regulations;

+ Manage and use maintenance expenditure in a manner not conforming to regulations;

+ Fail to organize first-time apartment building meeting;

+ Fail to produce settlement record of maintenance expenditure.

- A fine ranging from VND 260.000.000 to VND 300.000.000 shall be imposed on:

+ Repurposing common areas or repurposing non-residential areas in apartment buildings that serve mixed purposes;

+ Adopting incorrect calculations for flat area or areas in apartment buildings other than common areas;

+ Failing to make adequate deposit to accounts for maintenance expenditure of common areas for flat area and other areas reserved by the project developers without being sold or lease purchased by the time the apartment buildings are transferred and brought into use;

+ Failing to transfer apartment building dossiers in an adequate or timely manner to the elected Boards of directors;

+ Failing to use maintenance expenditure.

- Remedial measures:

+ Mandated operation conforming to regulations and law for violations under Point a Clause 1 of this Article;

+ Mandated opening of maintenance expenditure of common areas of apartment buildings conforming to regulations and law for violations under Point b Clause 1 of Article 67 of Decree 16/2022/ND-CP;

+ Mandated request for reorganization of apartment building meeting implemented by People’s Committees of communes for violations under Point c Clause 1 of Article 67 of Decree 16/2022/ND-CP;

+ Mandated submission of documents notifying the opening of accounts for maintenance expenditure to Departments of Construction for violations under Point d Clause 1 of Article 67 of Decree 16/2022/ND-CP;

+ Mandated preparation of annual maintenance plans conforming to regulations for violations under Point dd Clause 1 of Article 67 of Decree 16/2022/ND-CP;

+ Mandated submission of documents notifying Departments of Construction where apartment buildings are located for monitor after all maintenance expenditure has been transferred to the elected Board of directors of apartment buildings for violations under Point e Clause 1 of Article 67 of Decree 16/2022/ND-CP;

+ Mandated calculation of maintenance expenditure of common areas of apartment buildings conforming to regulations and law for violations under Point a Clause 2 of Article 67 of Decree 16/2022/ND-CP;

+ Mandated inclusion of details about accounts for maintenance expenditure of common areas of apartment buildings in the contracts for violations under Point b Clause 2 of Article 67 of Decree 16/2022/ND-CP;

+ Mandated submission of maintenance expenditure of common areas of apartment buildings conforming to regulations and law for violations under Point c Clause 2 of Article 67 of Decree 16/2022/ND-CP;

+ Mandated closure of accounts for maintenance expenditure for violations under Point d Clause 2 of Article 67 of Decree 16/2022/ND-CP;

+ Mandated disclosure of the use of operation expenditure and maintenance expenditure of common areas of apartment buildings for violations under Point d Clause 2 of Article 67 of Decree 16/2022/ND-CP;

+ Mandated transfer of maintenance expenditure of common areas of apartment buildings conforming to regulations and law for violations under Point e Clause 2 of Article 67 of Decree 16/2022/ND-CP;

+ Mandated selection of eligible and competent entities for managing and operating apartment buildings for violations under Point g Clause 2 of Article 67 of Decree 16/2022/ND-CP;

+ Mandated selling, leasing of motor vehicle parking lots in apartment buildings conforming to regulations and law for violations under Point h Clause 2 of Article 67 of Decree 16/2022/ND-CP;

+ Mandated reservation of area serving as community houses in accordance with standards and regulations for violations under Point a Clause 3 of this Article;

+ Mandated management and use of maintenance expenditure of apartment buildings conforming to regulations and law for violations under Point b Clause 3 of Article 67 of Decree 16/2022/ND-CP;

+ Mandated organization of first-time apartment building meetings for violations under Point c Clause 3 of Article 67 of Decree 16/2022/ND-CP;

+ Mandated production of settlement record of maintenance expenditure for violations under Point d Clause 3 of Article 67 of Decree 16/2022/ND-CP;

+ Mandated restoration to original state or mandated dismantlement of structures, parts of structures violating the law for violations under Point a Clause 4 of Article 67 of Decree 16/2022/ND-CP;

+ Mandated adoption of calculation of flat area or areas in apartment buildings other than common areas for violations under Point b Clause 4 of Article 67 of Decree 16/2022/ND-CP;

+ Mandated adequate deposit of maintenance expenditure of common areas of apartment buildings to opened accounts for violations under Point c Clause 4 of Article 67 of Decree 16/2022/ND-CP;

+ Mandated adequate or timely transfer of apartment building dossiers to the elected Boards of directors of apartment buildings for violations under Point d Clause 4 of Article 67 of Decree 16/2022/ND-CP;

+ Mandated use of maintenance expenditure conforming to regulations and law for violations under Point dd Clause 4 of Article 67 of Decree 16/2022/ND-CP.

2. What are penalties for volation of regulation on management and use of apartment buildings of apartment building inhabitants in Vietnam? 

According to Article 70 of Decree 16/2022/ND-CP, penalties for volation of regulation on management and use of apartment buildings of apartment building inhabitants in Vietnam include:

- A fine ranging from VND 20.000.000 to VND 40.000.000 shall be imposed on:

+ Soaking or leaking water to apartment buildings that are not under their ownership, management, or use;

+ Using paint or decorating the exterior of the flats or apartment buildings in a manner conforming to regulations on design and architecture;

+ Selling hazardous, explosive commodities, providing repair services for motorized vehicles, or cattle slaughtering services;

+ Operating restaurants, karaoke venues, or bars in commercial sections of apartment buildings without satisfying soundproofing or fire safety requirements;

+ Running business activities in areas not reserved for business activities of apartment buildings;

+ Using flats for purposes other than residential purpose.

- A fine ranging from VND 60.000.000 to VND 80.000.000 shall be imposed on:

+ Illegally appropriating housing area; occupying surrounding space, occupying common areas or individual areas of other owners in any shape or form;

+ Altering load-bearing structures or altering design of individual areas in apartment buildings;

+ Using areas and equipment intended for common use for individual purposes;

+ Using common areas or service areas for the wrong purposes in mixed-use apartment buildings.

- Remedial measures:

+ Mandated restoration to original state for violations under Point a, Point b Clause 1, Point a, Point b Clause 2 of Article 70 of Decree 16/2022/ND-CP;

+ Mandated relocation of hazardous, explosive commodities out of residential areas or mandated suspension of repair services for motorized vehicles or suspension of cattle slaughtering services in apartment buildings for violations under Point c Clause 1 of Article 70 of Decree 16/2022/ND-CP;

+ Mandated fulfillment of soundproofing and fire safety regulations for violations under Point d Clause 1 of Article 70 of Decree 16/2022/ND-CP;

+ Mandated the use of apartment flats for residential purposes for violations under Point e Clause 1 of Article 70 of Decree 16/2022/ND-CP;

+ Mandated return of areas and equipment intended for common use for violations under Point c Clause 2 of Article 70 of Decree 16/2022/ND-CP;

+ Mandated the correct use of common areas or service areas in mixed-use apartment buildings for violations under Point d Clause 2 of Article 70 of Decree 16/2022/ND-CP.

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