"Living miserably, dying miserably" because of buying a project that does not meet the conditions for opening for sale

The real estate market in the South is recovering, new projects are competing to open for sale. However, this is also the time when many investors circumvent the law to sell projects that do not have enough legal procedures, causing customers to "live a half-life, die a half-life". projects that do not meet the conditions to open for sale.

The real estate market in the South is recovering, new projects are competing to open for sale. However, this is also the time when many investors circumvent the law to sell projects that do not have enough legal procedures, causing customers to "live a half-life, die a half-life". projects that do not meet the conditions to open for sale.

Charm Diamond project was sold by the investor since 2019, but has not been built yet.

Identifying "underground" projects

According to the Law on Real Estate Business 2023, a real estate project eligible for sale must have complete legal procedures such as investment policy, 1/500 Planning, completed land use tax obligations, construction permit, completed foundation construction, and then be permitted by the competent authority to open for sale future real estate products.

However, it is common that projects do not meet all legal requirements but are still open for sale. In particular, most projects that only have Decision 1/500 invite customers to deposit to reserve a spot without using the word "open for sale".

For example, in early September 2024, in Di An City (Binh Duong), the Binh Thang Apartment Project (commercial name Avenue Binh Thang) was introduced to the market by the investor and collected "reservation" money from customers. According to the advertisement, the Project is built on an area of 3,351 m2, with 2 basements, 35 floors, including 536 apartments, selling price 33 - 40 million VND/m2. Through research, we learned that the Project has an investment policy, Decision 1/500, and a construction permit granted by the Binh Duong Department of Construction, but has not yet fulfilled its financial obligations and has not been built.

Binh Duong Department of Construction requires investors to commit not to sell or receive money from customers when the project does not meet legal requirements. In addition, the Department also has many documents recommending and instructing localities to strictly manage projects in the area, and to put up notices in front of real estate projects that do not meet the conditions for capital mobilization.

In Binh Duong New City, a project named KH is also being offered by the investor. In the role of a customer who wants to buy a house, I was introduced by an employee named Chau, this is a commercial and social housing project, the investor is accepting deposits to reserve a place, on October 15th the deposit contract will be officially signed, on November 15th the official sale will be opened. However, when asked about the legality, Chau said that the project is applying for a construction permit.

Similarly, the project named The Felix (Thuan An City) invested by C-Holding Joint Stock Company was opened for sale from July 2024. The project is built on an area of over 9,000 m2, with 2 apartment blocks 40 floors high, including 1,206 apartments, the lowest price is 1.5 billion VND/apartment. However, Binh Duong Department of Construction said that this project is not eligible to mobilize capital in the form of future housing because it is not legally sufficient.

Also in Thuan An City, The Emerald Golf View Project is being introduced to the market by Le Phong Group. The project includes 770 apartments, with prices ranging from 45 to over 50 million VND/m2. This project is also on the list of projects that are not eligible for sale.

This situation is not only in the outlying provinces, but also in Ho Chi Minh City. The Fitato project in Thu Duc City, invested by Hung Phu Invest Company, has 383 apartments, selling price 46 - 60 million VND/m2. The Ho Chi Minh City Department of Construction announced that this project is not qualified to open for sale and mobilize capital.

Bought a house 5 years ago but still no construction

The consequences of buying houses in projects that are not qualified for sale and capital mobilization make many customers miserable, having to file complaints everywhere.

Ms. Thuy Anh, a customer who bought an apartment in the Charm Diamond subdivision of the Charm City project complex (Di An City, Binh Duong Province) said that in 2019, Charm Group opened for sale apartments in the Charm Diamond subdivision, she bought an apartment here for nearly 2 billion VND. But until now, at the end of 2024, this project has not yet built the foundation, even though she has paid a lot of money.

“There are hundreds of customers like me who bought houses in this project. In 2021 and 2022, we worked with the investor many times, even filed a lawsuit and demanded a refund of the house purchase price, but the investor refused to pay,” Ms. Thuy Anh was upset.

Also opened for sale in 2019, the LDG Sky Project (Di An City), invested by LDG Investment Joint Stock Company, has 1,670 apartments, the selling price in 2019 was 30 million VND/m2, but after 5 years, the project has not been built because it does not have enough legal documents.

Mr. Huynh Pham Tuan Anh, Deputy Director of Binh Duong Department of Construction, said that investors, project developers, and brokerage companies "circumvent the law" to mobilize capital in forms such as priority request forms, deposit forms, and registration forms for wishes, etc., often occur.

Some projects with only rudimentary legal documents have organized capital mobilization without meeting the conditions and without approval from the authorities. These are transactions with many potential risks.

According to lawyer Tran Duc Phuong (Ho Chi Minh City Bar Association), many investors are weak in financial capacity, so they deliberately circumvent the law to raise capital regardless of the law. This is the reason why a series of projects in recent times, despite collecting up to 95% of the apartment value, have not been able to deliver the houses to customers. Many investors even mortgaged projects that had been sold to customers to banks, causing home buyers to fall into a situation no different from being held hostage.

“From 2020 until now, I have received many lawsuits from customers against investors because they accidentally bought projects that did not have enough legal documents, but sold them, collected money from customers and then did not build,” said Mr. Phuong.

According to lawyer Phuong, the fact that many investors "intentionally or unintentionally" violate legal regulations on buying and selling real estate without being licensed by the authorities is negatively affecting the market, pushing risks onto customers.

Investors often justify that doing so is beneficial for customers because buying early will get a cheaper price, choosing good products, and the business will have money to build the project. But that is when the business is favorable, but if there are problems with procedures, legal issues, capital, etc., the project will be stuck for years and years. In the end, the buyer will suffer.

“Homebuyers should consider carefully and absolutely not buy projects or houses that are being built in the future when the investor does not have enough legal documents. They should go to the local authorities to find out before signing documents or transferring money to the brokerage company or project investor to avoid risks,” lawyer Phuong advised.

Source: https://baodautu.vn/batdongsan/song-do-chet-do-vi-mua-du-an-chua-du-dieu-kien-mo-ban-d228630.html