In the draft law submitted to the National Assembly (NA) for the first time for comments (Submission No. 108/TTr-CP dated April 5 of the Government), there is a provision that project investors selling houses and construction works in the future; transferring and leasing land use rights with infrastructure in the project will be required to go through a real estate trading floor (Article 57). These proposals received many opposing opinions, including many disagreements from experts and some NA deputies.
2 options
Based on the opinions of the National Assembly deputies at the 5th session, the drafting agency coordinated with relevant agencies to study, absorb, and review. In the report on absorption, revision, and completion of the latest draft law sent to the National Assembly's Economic Committee, the Government agreed to remove the regulation requiring real estate transactions to be conducted through the floor (Article 57), instead only encouraging entities to do so.
"The acceptance of the drafting agency is timely and very welcome because if it requires some real estate transactions to go through a third party, a real estate trading floor, it will create additional procedures and costs, increasing real estate prices in the context that the law already has regulations on notarization and certification of contracts" - Master Nguyen Van Dinh, real estate legal expert, expressed his opinion.
Another noteworthy provision of the draft law is the conditions for investors to collect deposits in real estate transactions. In Clause 5, Article 23 of the latest draft law, the drafting agency proposes two options.
There are still many conflicting opinions about the deposit regulations in real estate trading and transactions proposed in the draft Law on Real Estate Business (amended). Photo: TAN THANH
Option 1: The real estate project investor is only allowed to collect deposits according to the agreement with the customer when the house or construction work has a basic design approved by a state agency and the investor has at least one of the documents on land use rights specified in Clause 2, Article 25 of this Law, and has completed the procedures for notifying the commencement of construction according to the provisions of law. 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: Real estate project investors are only allowed to collect deposits according to the agreement with customers when the housing and construction works have met all conditions for putting into business and have conducted transactions in accordance with the provisions of this law.
Reduce or remove deposit requirement?
Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), expressed disagreement with some contents in option 1, because it does not have much meaning in protecting the interests of customers, especially individual customers. Specifically, the deposit amount stipulated in option 1 should be revised to
"Deposit amount not exceeding 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 with the agreement. Thereby, it also helps the project investor grasp the needs and tastes of customers to perfect and improve the quality of products, utilities and services of the project.
Meanwhile, expert Nguyen Van Dinh said that in theory, it is necessary to evaluate whether the deposit is within the scope of the Law on Real Estate Business. According to him, the relationship between the seller (investor) and the buyer (potential customer) is a civil relationship, regulated by civil law.
According to Article 328 of the Civil Code, a deposit is when one party delivers to the other party a sum of money or precious metals, gemstones or other valuables (collectively referred to as the deposit) for a period of time to secure the conclusion or performance of a contract.
Therefore, if the purpose of the deposit agreement between the seller and the buyer is only to ensure that when both parties are qualified, they will enter into an apartment sale and purchase contract (to reserve a place), can specialized law (Law on Real Estate Business) limit the time of receiving the deposit or the value of the deposit?
According to Mr. Dinh, to ensure the effectiveness of the policy and avoid "conflicts of laws", the Law on Real Estate Business does not need to regulate deposits. Instead, it is necessary to regulate strict control over the sale of houses, future construction works, capital mobilization and use of capital by investors, and at the same time have strict sanctions to handle violations. Therefore, the provisions on conditions for receiving deposits and deposit values should be removed from the draft law.
Mr. LE HOANG CHAU, Chairman of Ho Chi Minh City Real Estate Association (HoREA):
Project transfer problems
Regarding the regulations on project transfer, Article 38 of the draft clearly states the principle of transferring the project in whole or in part. In particular, Clause 3 of Article 38 stipulates that after the transfer, the investor can inherit the project, but this principle is not consistent with Article 39 of the draft. Specifically, Point C, Clause 1 of Article 39 requires that in the case of project transfer, the investor must complete the infrastructure...
In fact, the project seller and buyer have completely different ideas. The buyer has money, has different ideas and they want to invest in changing the current status of the project, so after receiving the transfer, they can adjust the 1/500 planning, they accept to pay more money, fulfill their financial obligations and do not need to use the old infrastructure, they build new infrastructure. While Clause 3, Article 39 requires the completion of new infrastructure to allow the transfer, which is inconvenient for the transferor. When the regulations are still binding, it will make the project merger and acquisition (M&A) difficult, not creating favorable conditions for the transfer, many investors without capacity will find it difficult to find new investors.
Dr. PHAM ANH KHOI, General Director of FINA Real Estate Financial Services Company:
Regulations need to ensure balance
There are many important contents that the National Assembly has discussed and decided on the Law on Real Estate Business (amended). However, all decisions need to be balanced between the subjects participating in the market, including real estate buyers and sellers. If the law makes it difficult for buyers or sellers, the balance will be lost. For example, regulations on conditions for product sales, if the law is too strict, investors will not or will have difficulty mobilizing capital, difficult to implement projects, then costs will increase; products supplied to the market will be low, and the selling price will be beyond the ability of buyers.
Even the state will lose budget revenue, other industries related to real estate such as construction materials, construction and installation, workers will lose their jobs... and the whole economy will also be affected.
Mr. LE HUU NGHI, General Director of Le Thanh Trading and Construction Company Limited:
There should be regulations for managing mobilized money.
There are unnecessary regulations that the National Assembly should ignore, binding only costs more personnel to check and supervise... For example, the deposit regulation is a civil matter, decided by both the buyer and the seller. If the buyer agrees to deposit but does not buy, the deposit is lost, and the seller takes the money and cancels the contract, the deposit will be returned.
Or whether to regulate trading through the exchange or not should be left to the investor to freely choose, because they will know which exchange is capable enough to choose, otherwise they will sell the product themselves and be responsible to the customer. In fact, if the regulation is mandatory, many unreliable exchanges, who only want to sell the product to get commission, will exaggerate the truth, say something wrong about the project to sell the product to the customer, then the investor will be the one to bear all the responsibility.
The important thing in real estate business is to manage the investor's cash flow. Where do they put the money from customers? If they are not managed and used arbitrarily, and not put into project implementation, it will be risky for customers.
Pham Dinh recorded
Source: https://nld.com.vn/bat-dong-san/tranh-cai-ve-quy-dinh-dat-coc-bat-dong-san-20231030220850679.htm
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