In the draft Law on Real Estate Business (amended), the Ministry of Construction has proposed two options regarding deposits in housing business and future construction projects.
Specifically, in Option 1, the Ministry of Construction stipulates that real estate project investors are only allowed to collect deposits according to agreements with customers when the project has a basic design appraised by a State agency and the investor has one of the documents on land use rights.
Illustration photo. (Source: MP)
The deposit agreement must clearly state the selling price, lease-purchase price of the house or construction work, and the deposit amount must not exceed 10% of the selling price, lease-purchase price of the house or construction work.
Option 2 stipulates that real estate project investors are only allowed to collect deposits from customers when the houses and construction works have met all conditions for being put into business and have conducted transactions in accordance with the provisions of this law.
Regarding this issue, Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), agreed with option 1 and proposed to stipulate that the deposit amount should not exceed 5%.
According to Mr. Chau, the regulation that the deposit amount does not exceed 5% is a reasonable level according to social practice and to ensure that the nature of the deposit is not for capital mobilization purposes and has a large enough value for both the depositor and the deposit recipient to consciously comply.
At the same time, this regulation helps the deposit recipient, the project investor, to explore and grasp the needs and tastes of customers to improve and enhance the quality of products, utilities and services of the project.
Mr. Chau said that the proposal that the deposit amount should not exceed 10% of the value of the deposited asset is too high, or that the deposit amount should be only 2%, which is too low, or that the proposal should be 30%, equal to the first payment amount after signing the contract, is unreasonable because it does not meet the requirements.
It is a deposit that is not intended to raise capital and the value is large enough for both the depositor and the deposit recipient to consciously comply.
In addition, Mr. Chau proposed adding a provision prohibiting "the act of collecting deposits contrary to the provisions of this Law and relevant laws" to the Draft Law on Real Estate Business (amended) on "prohibited acts" to ensure consistency and uniformity of legal regulations.
The Association found that Option 1 would facilitate the smooth buying and selling and transfer of real estate projects (M&A), but the transferring investor and the transferee investor must comply with the conditions when transferring all or part of the real estate project, so the State still strictly controls this activity.
Option 1 also ensures consistency and unity between Article 39 of the Draft Law on Real Estate Business (amended) and Article 7 of the 2020 Enterprise Law on the rights of enterprises, including the right to freedom of business; the right to business autonomy and choice of business organization form; the right to proactively adjust the scale and business lines.
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