Proposed fine of 160 million VND if doing real estate business but not establishing a business

Issues surrounding the establishment of real estate businesses are receiving more attention, especially when the criteria for determining small-scale units have not been officially announced.

The Ministry of Construction is seeking comments on a draft Decree regulating administrative sanctions for construction violations.

Accordingly, in Article 60 of the draft, the proposed regulation imposes a fine of 120 - 160 million VND for real estate services business without establishing an enterprise as prescribed. The current maximum fine for this violation is 120 million VND.

Raising the penalty level is an effort to help purify and make the real estate market healthier. Photo: Dung Minh

In addition, the above penalty level is also applied to cases where real estate trading floors sign contracts with brokers who are not qualified to operate; real estate service businesses but no individuals have brokerage certificates; trading floors list and provide incorrect information; trading floors operate without a license, etc.

In addition to the above regulations, the Ministry also proposed to sanction many other cases against investors, contractors, organizations, and individuals in real estate construction activities... Readers can learn about the entire draft at this link and contribute comments via the mailbox [email protected] or send documents to the agency of the Ministry of Construction Inspectorate before September 12, 2024.

Issues surrounding the establishment of real estate service businesses are receiving more attention, especially when the criteria for determining small-scale units have not been officially announced.

In the draft Decree detailing a number of articles of the 2024 Law on Real Estate Business, the Ministry of Construction is proposing criteria for determining small-scale real estate businesses with total revenue of no more than VND300 billion and with no more than 10 sales and transfers per year.

According to Master Nguyen Van Dinh, a real estate legal expert, the current draft version is scientific and feasible. However, to increase the persuasiveness of this plan, the Ministry of Construction needs to provide arguments, scientific basis, and practical basis to quantify the figure of 300 billion VND and 10 transactions in a year.

“An important issue that also needs to be satisfactorily answered is the mechanism to ensure the implementation of the Decree’s provisions. Specifically, how can we control and ‘blow the whistle’ on individuals who conduct real estate business exceeding the small-scale limit? What are the applicable sanctions? And if an individual intentionally buys or sells real estate exceeding the small-scale limit, will the transactions exceeding the limit be invalid?”, Mr. Dinh commented.

The above issue was mentioned in a recent meeting of Deputy Prime Minister Tran Hong Ha. Accordingly, the delegates agreed on regulations on individuals doing small-scale real estate business; not for business purposes and below small scale according to criteria on contract value, number of sales and transfers of real estate in a year.

Currently, specific information about the above regulations has not been announced. Investment Newspaper will continuously update related news as soon as possible.

Regarding the establishment of real estate service businesses in general, the new Real Estate Business Law has many mechanisms to make opening a company easier.

For example, in the 2014 Law on Real Estate Business, if an organization wants to establish a brokerage floor, it must have at least two people with a practice certificate in the unit. However, in Article 61 of the 2023 Law on Real Estate Business, the floor only needs to have at least one individual with a certificate to be eligible to establish a business.

Source: https://baodautu.vn/batdongsan/de-xuat-phat-160-trieu-dong-neu-kinh-doanh-bat-dong-san-nhung-khong-lap-doanh-nghiep-d220202.html