What are the responsibilities of real estate project investors?

New responsibilities of real estate project investors

Talking to Kinh te & Do thi Newspaper about the new responsibilities of real estate project investors, lawyer Pham Thi Bich Hao - Director of Duc An Law Company Limited said that according to the provisions of Article 17 of the Law on Real Estate Business, it is not allowed to authorize other organizations or individuals to sign deposit contracts, purchase, sale, transfer, lease-purchase of houses, construction works, construction floor area in construction works, land use rights with technical infrastructure in real estate projects. This regulation is to avoid violations in authorized units to sign deposit and transfer contracts.

The 2023 Law on Real Estate Business stipulates: Deposit for purchasing future houses must not exceed 5% of the selling price. — The 2023 Law on Real Estate Business stipulates: Deposit for future home purchase must not exceed 5% of the selling price.

At the same time, the construction of houses, construction works and technical infrastructure works, social infrastructure in the project must comply with the detailed planning, approved design, construction permit, content of project investment approval by competent state agencies; comply with construction standards. This new regulation compared to the 2014 Law on Real Estate Business is also to prevent some investors from building houses that do not comply with approved designs and construction permits.

The Law on Real Estate Business 2023 (consisting of 10 Chapters and 83 Articles) will take effect from January 1, 2025 and replace the Law on Real Estate Business 2014.

Some new regulations on payment, lease-purchase of houses, construction works formed in the future according to Clause 2, Article 25 of the Law on Real Estate Business 2023: Payment in lease-purchase of houses, construction works, construction floor area in construction works formed in the future is made in multiple installments, the first installment does not exceed 30% of the contract value including the deposit, the subsequent installments must be consistent with the construction progress until the handover of the house, construction works, construction floor area in the construction works to the lessee, but the total amount of advance payment to the lessor does not exceed 50% of the value of the lease-purchase contract of houses, construction works, construction floor area in the construction works. The remaining amount is calculated as rent to be paid to the lessor within a certain period as agreed in the contract.

New points in the Law on Real Estate Business in Article 29 on requirements for business of land use rights with technical infrastructure in real estate projects. Accordingly, real estate projects with land use rights with technical infrastructure put into business must meet the following requirements:

Requirements specified in Article 11 of this Law; completed investment in construction of technical infrastructure works according to approved detailed planning, project progress approved by competent state agencies according to regulations of law on construction, law on urban planning, law on investment; ensure provision of electricity, water supply, drainage, waste collection, wastewater treatment services; ensure connection to the common infrastructure system of the area before transferring, leasing, subleasing land use rights; transfer, leasing, subleasing of land use rights with technical infrastructure must be consistent with the investment objectives and content of the investment project approved by competent state agencies.

New points worth noting for parties participating in transactions

According to lawyer Pham Thi Bich Hao, regarding the deposit regulations in the business of housing and future construction works, to ensure the true nature of the deposit and at the same time limit risks for the buyer, lessee, who is often the weaker party, the 2023 Law on Real Estate Business stipulates: The deposit for buying a house formed in the future must not exceed 5% of the selling price.

The current 2014 Law on Real Estate Business does not specifically regulate deposits when buying, selling, or leasing real estate to be formed in the future.

According to the new regulations in Clause 5, Article 23 of the Law on Real Estate Business 2023, the content is as follows: Real estate project investors are only allowed to collect deposits of no more than 5% of the selling price, lease-purchase price of houses, construction works, and construction floor area in construction works from customers when the houses and construction works have met all the conditions for putting into business according to the provisions of this Law. The deposit agreement must clearly state the selling price, lease-purchase price of houses, construction works, and construction floor area in construction works.

Accordingly, real estate project investors are only allowed to collect deposits of no more than 5% of the selling price, lease-purchase price of houses and future construction works when they meet the conditions for putting them into business.

The deposit agreement must clearly state the sale price, lease-purchase price of the house, construction project, and the floor area of the construction project.

Housing and construction works formed in the future can only be put into business when there is one of the following documents on land use rights; construction permit; notice of commencement of construction; documents on acceptance of completed construction of technical infrastructure...

Expanding the rights of Vietnamese investors residing abroad

Lawyer Pham Thi Bich Hao said that another notable new point of the 2023 Law on Real Estate Business is the amendment of regulations related to the form and scope of real estate business of Vietnamese people residing abroad.

In Article 10, the subjects allowed to do business are Vietnamese people residing abroad who are Vietnamese citizens according to the provisions of the law on nationality and are allowed to enter Vietnam and are allowed to do real estate business in the forms prescribed by domestic organizations and individuals doing real estate business. Vietnamese people residing abroad who are not Vietnamese citizens according to the provisions of the law on nationality and are allowed to enter Vietnam and are allowed to do real estate business in the following forms:

Investing in the construction of houses and construction works associated with land use rights for sale, lease, or lease-purchase through real estate projects must comply with the form, purpose, and duration of land use as prescribed by the law on land;

Investing in the construction of technical infrastructure in real estate projects for the purpose of transferring, leasing, and subleasing land use rights with technical infrastructure must comply with the form, purpose, and duration of land use as prescribed by the law on land;

Forms of real estate business specified in Point d and Point g, Clause 1 of this Article.

“Compared to the current Law on Real Estate Business, the new Law provides more detailed regulations on real estate business forms of Vietnamese people residing abroad, expanding the rights of investors who are Vietnamese people residing abroad to attract capital for the real estate market,” said Lawyer Pham Thi Bich Hao.

Source