Eliminate mandatory regulations for real estate transactions through trading floors

Continuing the 25th Session program, on the afternoon of August 24, at the National Assembly House, the National Assembly Standing Committee gave opinions on explaining, accepting, and revising the draft Law on Real Estate Business (amended).

Reporting at the meeting, Chairman of the Economic Committee Vu Hong Thanh said: In response to the opinions of National Assembly deputies, the draft Law on Real Estate Business (amended) has been reviewed for its scope of regulation with the draft Law on Land (amended), the draft Law on Housing (amended) and related laws. The draft Law ensures no overlap or conflict in the scope of regulation, while ensuring the consistency and synchronization of the legal system and is revised in the direction of clearly defining the scope of regulation including real estate business, rights and obligations of organizations and individuals doing real estate business, regulating the real estate market and state management of real estate business.

Chairman of the Economic Committee Vu Hong Thanh said that the draft Law has added provisions on cases where the Law on Real Estate Business is not applied, ensuring compliance with the scope of the draft Law. Regarding the concept of "real estate business", the draft Law has revised the concept of real estate business in the direction of: Clarifying the types of real estate business; adding content on the implementation of real estate project transfer and real estate service business; keeping the phrase "for the purpose of seeking profit" to be consistent with the concept of business stipulated in the Enterprise Law.

Chairman of the National Assembly's Economic Committee Vu Hong Thanh presents the report. Photo: Doan Tan/VNA

Chairman of the Economic Committee Vu Hong Thanh said that many opinions suggested not making it mandatory but only encouraging real estate transactions through real estate trading floors. Some opinions agreed on regulating types of real estate transactions through real estate trading floors.

The Standing Committee of the Economic Committee found that the practical summary of the implementation of the 2014 Law on Real Estate Business showed that current real estate trading floors do not ensure transparency and do not ensure the legal safety of transactions because the real estate trading floor is a beneficiary in the transaction relationship. Mandating transactions through real estate trading floors is inconsistent with the current legal system, hinders the right to freedom of business, has the potential to exploit legal provisions to monopolize and disrupt the market, and does not ensure the implementation of the task of developing a healthy, safe, and sustainable real estate market.

In response to the opinions of National Assembly deputies, the draft Law has been revised in the following direction: Removing the mandatory provision for real estate transactions through real estate trading floors in Chapter VII of the draft Law to create favorable conditions for investors and customers to freely choose the transaction method; supplementing Clause 7, Article 8 of the draft Law on State policies on real estate investment and business, accordingly "The State encourages organizations and individuals to conduct transactions of buying, selling, transferring, leasing, leasing houses, construction works and land use rights through real estate trading floors".

The Draft Law proposes two options for deposits in housing business and future construction projects.

Option 1: Regulation "Real estate project investors are only allowed to collect deposits according to the agreement with customers when the project has a basic design that has been appraised by a state agency and the investor has one of the documents on land use rights. The deposit agreement must clearly state the selling price, lease-purchase price of the house, construction work and the deposit amount must not exceed 10% of the selling price, lease-purchase price of the house, construction work".

Option 2: Regulation "Real estate project investors are only allowed to collect deposits from customers when the housing and construction works have met all conditions for putting into business and have conducted transactions in accordance with the provisions of this Law".

The Standing Committee of the Economic Committee chose option 1, because when the basic design is appraised by a specialized construction agency, the legality of the project will be clear enough for buyers. Enterprises are more proactive in their business plans, completing the construction design after the basic design.

According to the Standing Committee of the Economic Committee, the deposit acceptance rate needs to be regulated at a reasonable level to ensure that the purpose of the deposit is not for real estate businesses to receive deposits as a capital mobilization channel.

If the deposit rate is too high, it will not eliminate incompetent real estate businesses from participating in the market, increasing the risk of capital misappropriation, fraud, and appropriation of customers' (people's) assets. If the deposit rate is too low, it will not have the effect of binding the responsibilities of the participating parties, and the parties involved may be willing to violate the commitment and accept the loss of the deposit.

Therefore, the draft Law stipulates that the maximum deposit rate is 10% of the selling price or hire-purchase price. In addition, the draft Law supplements the provision that the parties must clearly state the selling price or hire-purchase price in the deposit agreement, helping to bind responsibilities and ensure contract conclusion.

According to the Standing Committee of the Economic Committee, for Option 2, allowing deposit collection when "housing and construction works have met all the conditions for putting into business and have conducted transactions in accordance with the provisions of this Law", will no longer have the meaning of deposit but essentially become payment of the contract according to progress.

Previously, at the 5th Session, the National Assembly discussed and commented on the draft Law on Real Estate Business (amended). Based on the opinions of the National Assembly deputies, the Standing Committee of the Economic Committee chaired and coordinated with the drafting agency (Ministry of Construction) and relevant agencies and organizations to study, absorb, and explain the revision of the draft Law. At the same time, seminars were organized to consult with experts, managers, and subjects affected by the draft Law to have more theoretical and practical bases to complete the draft Law.

The draft Law after being accepted and revised includes 10 chapters and 84 articles, removing 9 articles and adding 1 article compared to the draft Law submitted to the National Assembly at the 5th Session.

According to VNA/Tin Tuc Newspaper

Source