Accordingly, Clause 3, Article 200 of the Draft Law on Credit Institutions (amended) stipulates the rapid transfer of bad debts related to real estate. The Ho Chi Minh City Real Estate Association (HoREA) believes that this is very worrying as it could cause "blockages" in the bad debt handling activities of credit institutions for bad debts with collateral assets being projects, part of real estate projects due to having to meet the conditions of Clause 3, Article 40 of the Law on Real Estate Business 2023.
Because, if the investor wants to transfer, he/she must have completed the financial obligations regarding the project's land, including land use fees, land rents, and taxes, fees, and charges related to land (if any) to the State.
The amendment and supplementation of the Draft Law as proposed by HoREA is expected to help speed up the recovery of bad real estate debts.
Reality also shows that, in recent years, the majority of assets secured for debt recovery by credit institutions have been real estate projects or parts of real estate projects, but the investors of these projects have not yet fulfilled their financial obligations regarding land.
Therefore, HoREA proposes to amend Clause 3, Article 200 in the direction that Credit Institutions are entitled to transfer all or part of real estate projects as collateral to recover debts, as long as they meet the following prescribed conditions:
The transferred real estate project must satisfy the conditions specified in Points a, d, đ, g and h, Clause 1, Article 40 of the Law on Real Estate Business No. 29/2023/QH15 and must have a land allocation or land lease decision from a competent state agency.
The project transferee must satisfy the conditions specified in Clauses 2, 4 and 5, Article 40 of the Law on Real Estate Business No. 29/2023/QH15.
If the above proposal is approved, the Association proposes to allow early application of Clause 3, Article 200 of the Draft Law on Credit Institutions (amended) from January 1, 2024. Along with that, it is proposed to remove Clause 15, Article 210 of the Draft Law on Credit Institutions (amended) because it is no longer necessary.
On the contrary, if not approved, HoREA proposes to replace the phrase "subject of the project transferor" with the phrase "project transferor" in Clause 3, Article 200 and Clause 15, Article 210 to ensure accuracy and consistency with the provisions of the Construction Law 2014 (amended in 2020), the Housing Law 2023 and the Real Estate Business Law 2023. At the same time, Clause 15, Article 210 should be applied early from January 1, 2024 to avoid the "legal gap" and support credit institutions to quickly handle bad debts related to real estate projects.
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