Without a pink book, can the apartment be traded?
Real estate market reports for the third quarter from several market research firms mostly agree that the average selling price of new apartments in Hanoi has reached 64-69 million VND/m2. Old apartment prices have reached 46-51 million VND/m2.
Notably, new apartments priced above VND4 billion accounted for 70% of the total number of apartments sold. The segment of apartments priced below VND2 billion almost disappeared from the market.
The increase in apartment prices has caused many people to switch to buying apartments without land use rights certificates or house ownership certificates (called pink books) because the selling price is often lower than apartments with certificates. The question is whether buying and selling in this case is legal?
Point a, Clause 1, Article 160 of the 2023 Housing Law stipulates that the conditions for transactions on purchase, sale, hire-purchase, donation, exchange, mortgage, and capital contribution using housing must satisfy all conditions, including a Certificate as prescribed by law, except for the case specified in Clause 2 of this Article.
The cases specified in Clause 2, Article 160 of the 2023 Housing Law guided by Decree 95/2024 include:
- Buying, selling, leasing, mortgaging future housing; selling housing in case of dissolution or bankruptcy;
- Organize and give away houses of gratitude, houses of love, houses of great solidarity;
- Purchase, lease-purchase of available housing from investors of housing construction investment projects in the following cases: Housing belonging to public property; Social housing, housing for the people's armed forces, housing serving resettlement not belonging to public property;
- Renting, lending, letting, authorizing housing management;
- Inheritance of housing.
Thus, with apartments that do not have a pink book, the parties can completely buy and sell.
An apartment project in Hanoi (Photo: Tran Khang).
Legal issues to note
Article 8 of Decree 95/2024 clearly stipulates documents proving housing conditions for participating in transactions when there is no certificate of ownership.
For transactions of buying and selling, or leasing houses in housing construction investment projects, there must be documents proving that the houses are eligible for business in the case of resettlement houses and houses for the people's armed forces.
These types of houses must have documents proving that they are eligible to be put into business or documents proving that they are accepted for use, documents proving that they are eligible to be traded according to the provisions of law on development and management of social housing.
For transactions of buying, selling, or leasing future housing that is not part of a project, there must be a certificate of land use rights and a construction permit in cases where a construction permit is required, or documents proving investment in housing construction must be available.
For transactions of buying, selling or renting public housing, there must be documents identifying the housing as eligible for rent or sale according to the provisions of Article 63 and Article 69 of Decree 95/2024.
For transactions of donating houses of gratitude, charity houses, and solidarity houses, the donating organization must have documents proving the construction of the house for donation.
If the inherited house is subject to purchase or hire-purchase, there must be a legal house purchase or hire-purchase contract accompanied by documents proving the house ownership or proving the investment in house construction by the seller or hire-purchaser.
For the sale of housing by a dissolved or bankrupt organization, there must be a resolution or decision on the dissolution of that organization or a notice from a competent authority on the dissolution of the organization that owns the housing. In case of bankruptcy, there must be a decision from the People's Court declaring the bankruptcy of the organization that owns the housing.
However, when buying an apartment without a pink book, the buyer may face many risks. The biggest risk is that the State will not recognize the legal ownership of the apartment and the right to use the land associated with that apartment project.
Another risk is that if the agreement is in the form of a notarized management and use authorization contract, it means that from the second owner onwards, the only authorized owner is the one who is authorized to use the apartment. In that case, if the red book is issued, the first owner will be the one whose name is on the document. The first owner may not cooperate in transferring the name to the new owner in order to demand a price increase.
Therefore, when disputes arise related to this property, it will not be protected by law. During the time the property does not have a certificate, the buyer cannot borrow money from the bank by mortgaging the apartment.
Source: https://dantri.com.vn/bat-dong-san/chung-cu-tang-gia-soc-co-nen-mua-can-ho-chua-co-so-hong-20241017133815720.htm
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