'Dishless' real estate investor fined 1 billion VND as deterrent

Recently, some investors, for economic benefits, have deliberately violated regulations such as not fully disclosing information when trading real estate; putting real estate into business but not ensuring the conditions according to regulations; collecting deposits from home buyers that account for a large proportion of the value of the sales contract... causing great impacts on people's rights.

Therefore, the Ministry of Construction has focused and noted when drafting the Decree replacing Decree No. 16/2022/ND-CP (referred to as Decree 16) in the direction of increasing the maximum fine of 1 billion VND for some violations.

In addition, there are additional penalties and remedial measures to ensure deterrence and limit the consequences of administrative violations.

Illustration photo. (Source: ST)

Of which, 800 million VND to 1 billion VND is the highest fine applied to 4 violations related to investors not publicly disclosing information on mortgages of houses, construction works, floor area in works, land use rights, real estate projects put into business...

The act of not disclosing, not fully disclosing or not correctly disclosing the contents of real estate projects and housing construction investment projects as prescribed has been punished in Decree No. 16/2022/ND-CP, with a fine of 100 million to 120 million VND. However, in the recent past, there has been a situation where investors concealed information that the project had been mortgaged to the bank but still signed contracts with people without publicly informing people that the project had been mortgaged.

The investor concealed the above information, leading to the home buyer signing the sales contract due to insufficient information, only to find out when the bank foreclosed on the property that the house he bought had been mortgaged by the investor. Therefore, in this draft, the Ministry of Construction proposed to the Government to increase the fine from 120 million VND to 1 billion VND.

Regarding this fine, some people think that although the fine has been increased, compared to the benefits that investors gain, this fine is still low. That is the reason why many investors deliberately violate the law, accept to pay the fine, causing great impact on the rights of customers.

The Inspectorate of the Ministry of Construction affirmed that this is the maximum fine (maximum) in the real estate business sector as prescribed by the Law on Handling of Administrative Violations. According to Article 24 of the Law on Handling of Administrative Violations, the maximum fine in the real estate business sector is 1 billion VND (maximum) applicable to organizations. Based on the above provisions, the draft Decree has adjusted the fine for some violations in the real estate business sector to a maximum of 1 billion VND. In addition, the draft Decree also stipulates that the Investor must publicly disclose correct and complete information of the project and be subject to the additional penalty of suspension of real estate business activities.

In addition to the act of investors not disclosing information about mortgages, the act of real estate business that does not fully meet the conditions as prescribed or is not allowed to be put into business as prescribed is also proposed by the Ministry of Construction to increase the fine from 600 million VND to a maximum of 1 billion VND.

In addition to the monetary penalty, according to the draft Decree, organizations and individuals who violate the law will also be subject to additional penalties of temporary suspension of real estate business activities and appropriate remedial measures commensurate with the violation. These include being forced to disclose information as prescribed, being forced to re-establish contracts related to land use rights, being forced to return to the buyer all fees and amounts related to real estate business. Or being forced to refund the deposit exceeding the prescribed amount, being forced to carry out procedures for granting certificates as prescribed....

Regarding the real estate service business sector, the draft also adds many violations. The draft Decree provides specific penalties for a series of acts, from real estate trading floors signing contracts with real estate brokers who do not meet the operating conditions according to regulations; real estate trading floors operating without a license... To real estate trading floors not listing, not providing information or listing, providing incorrect information, or incomplete information about real estate that is eligible for business according to regulations; real estate trading floors not confirming or incorrectly confirming real estate transactions through direct forms or through email according to regulations... to protect the rights of all parties, including home buyers.

Many violations in real estate business and new housing development that have been amended, supplemented or adjusted in this draft decree will be strictly and deterrently handled, contributing to the work of building and perfecting institutions, contributing to stabilizing security, order and social safety.

Source: https://www.congluan.vn/real-estate-investor-thieu-trung-thuc-bi-phat-kich-khung-1-ty-dong-de-ran-de-post304155.html