Removing the "bottleneck" in mini apartment management, more opportunities for home buyers

Because from August 1, when the Housing Law 2023 officially takes effect, owners of mini apartments that meet the conditions will be granted a certificate of ownership of houses and other assets attached to land according to the land law and can sell, lease, or hire-purchase.

Over the past 10 years, the management and use of mini apartments has always been a hot issue that has attracted special attention from residents, experts and managers... Mini apartments have received such special attention because during this time, there have been many shortcomings, there are no clear regulations in legal documents, leading to loose management; residents collude with some officials in state agencies to cover up violations of construction order (encroachment on common space, increasing building height...), fire prevention and fighting... leading to many serious consequences causing heavy damage to the lives and property of residents living in those projects.

Heartbreaking stories are still present right before our eyes, such as the fire at the mini apartment building at No. 37, Alley 29/70, Khuong Ha Street (Khuong Dinh Ward, Thanh Xuan District) that killed 56 people on September 13, 2023. This mini apartment building was licensed for 3 floors and 1 attic, but the investor built it into 9 floors; after only about 8 months, another mini apartment fire with catastrophic consequences occurred at No. 1, Alley 43/98/31, Trung Kinh Street (Trung Hoa Ward, Cau Giay District), killing 14 people, including the homeowner's family and tenants.

In addition, with the "ambiguity" of ownership regulations for mini apartments in legal documents, specifically in Clause 3, Article 43, Decree 71/2010/ND-CP allowing the construction of individual houses for households and individuals, which was later legalized in Article 46, Housing Law 2014. This has caused this product line to flourish uncontrollably, investors not only disobey regulations on functional design, height, fire prevention and fighting... but also organize transactions and transfers through handwritten agreements, because they do not meet legal requirements; while people with limited finances have accepted this product as an inevitable rule.

“Many mini apartment buildings are illegally built in large cities on plots of land deep in residential areas, with difficult traffic, not ensuring quality, fire safety, and not being able to separate red books for buyers, causing disputes, lawsuits, and social insecurity. However, many people have accepted this product as an inevitable rule, because it meets the following conditions: close to the center, cheaper than other housing products... due to financial constraints” - Vice President of the Vietnam Real Estate Association - Dr. Nguyen Van Dinh analyzed.

Since Decree 71/2010/ND-CP was issued and legalized in the Housing Law in 2014, mini apartments have developed strongly nationwide, especially in large cities such as Hanoi, Ho Chi Minh City... areas with limited land, crowded population, and lack of housing products, causing housing prices to escalate every quarter and every year, making it more and more difficult for low-income people to own a house. Faced with this situation, mini apartments are considered a lifesaver for many of these people.

According to the market's necessity, when demand increases, supply increases and mini apartment products are developed as a necessity of the market economy, in which according to preliminary statistics, Hanoi currently has about 2,000 mini apartment buildings; while in Ho Chi Minh City, the number is many times larger with about 42,000 mini apartment-style apartments. However, in the face of the shortcomings, limitations and distortions in the management and use of mini apartments, over the past 10 years there have been many debates about whether or not mini apartment products should be allowed to exist.

“As the wave of migration to big cities increases to work and earn a living, ordinary workers and low-income people with limited financial resources who cannot access expensive housing products have turned to mini apartments, so this is also considered a typical product of the market economy. Although knowing that this product has many potential risks in terms of construction quality as well as legal issues, a large number of people still happily accept it” - Urban management expert - Architect Tran Huy Anh said.

Faced with the shortcomings in the management and use of mini apartments, the 2023 Housing Law has provided specific regulations for this product line. Accordingly, from August 1, when the law officially comes into effect, owners of mini apartments that meet the conditions will be granted a certificate of ownership of houses and other assets attached to land (commonly known as pink books) according to the land law, and will also be able to sell, lease, or hire-purchase.

Accordingly, mini apartments that meet the conditions of fire prevention and fighting, have roads that ensure fire fighting vehicles can reach the foot of the building, have land use rights, meet the conditions of being the investor of the housing project; at the same time, must comply with the regulations on management and use of apartment buildings of the Ministry of Construction (the Ministry of Construction will issue separate standards and regulations on management and operation of mini apartments)... will be allowed to do business according to the provisions of current law.

“I appreciate this regulation in the 2023 Housing Law, because it removes many bottlenecks in the management and operation of mini-apartments. This is a product of the market economy, where there is demand and there is supply, because currently the demand in the market for low-cost housing products is very large. We cannot ban it just because we cannot manage it, allowing it to exist legally will be the basis for authorities at all levels to control it more closely, creating fairness for mini-apartments like other housing products” - Vice President of the Hanoi Real Estate Club Nguyen The Diep acknowledged.