Why do apartment ownership disputes occur?

Ambiguous sales contracts and legal loopholes put home buyers at risk in ownership disputes with apartment building investors.

Images of residents holding banners protesting against investors have appeared in many apartment buildings in Hanoi and some provinces. The most intense disputes are around areas, common and private facilities such as basements and parking lots, community rooms, gyms, business areas, rental areas... Experts and lawyers point out many reasons leading to this situation.

Ambiguous sales contract benefits the investor

Mr. Tran Khanh, Chairman of the Hanoi Building Management Club, analyzed that Decree 71/2010 previously stipulated that the private and common ownership must be clearly stated in the apartment sale and purchase contract. However, Decree 99/2015 guiding the implementation of the current Housing Law does not have this provision. Each apartment project has a separate sale and purchase contract, the content of which can be interpreted in many ways, leading to disputes. Many sale and purchase contracts drafted by investors are not detailed, and even omit the common ownership in a way that is favorable to the investor.

According to Mr. Khanh, most buyers only pay attention to the price and quality of the apartment and pay little attention to the terms of common and private ownership in the contract. After the apartment is handed over, the management board representing the residents has no basis to divide the common and private ownership areas with the investor. From here, disputes continue to arise regarding the investor's and residents' contributions to the apartment maintenance fund (2% of the apartment value or ownership area).

Mr. Nguyen Manh Ha, Vice President of the Vietnam Real Estate Association, also commented that many apartment purchase and sale contracts are not in accordance with regulations, even illegal, leading to disputes. When signing a purchase and sale contract, customers often do not carefully study the terms. Meanwhile, many investors want to sell their products so they "advertise differently from reality, then cut utilities in the common area of ​​residents to benefit themselves".

Residents and office block of Bonanza building (23 Duy Tan, Hanoi) hung banners asking the investor to dialogue and clarify disputed issues, on April 23. Photo: Provided by residents.

The law has not yet specifically defined parking spaces for apartments.

The recent dispute over common and private ownership in apartment buildings is related to the area for parking motorbikes, bicycles and cars in the basement. The current Housing Law stipulates that parking spaces for bicycles and motorbikes are under common ownership. However, for car parking spaces, apartment buyers must rent or buy. In case they do not buy or rent, the car parking space is under the management of the investor, and the investment cost for building this parking space is not included in the apartment selling price.

Attorney Truong Anh Tu, Director of Truong Anh Tu Law Firm, analyzed the nature of the apartment's parking space as belonging to the common property and being included in the selling price, from the time of handover, the investor will terminate its ownership. The apartment's selling price is not fixed but increases and decreases depending on the time, so it is difficult to prove that the investor does not include the cost of building a parking space in the selling price of the house.

Furthermore, the parking space is attached to the floor area of ​​the apartment building, and is also an indispensable part of the project. "Therefore, separating the cost of building a parking space from the selling price of the apartment is difficult to do," said Mr. Tu.

Although there are many disputes related to parking spaces in apartment buildings, the current Housing Law and the draft revised Housing Law being considered by the National Assembly at its 5th session have not made any adjustments to specifically define them. "The lack of clarity in determining common and private ownership is the cause of the seeds of disputes between investors and residents, with the residents being the ones who suffer the most," said Mr. Tu.

Residents at the Kosmo Tay Ho project demanded the investor pay maintenance fees in March. Photo: Provided by residents

No public building records

Mr. Tran Khanh, Chairman of the Hanoi Building Management Club, pointed out the shortcomings of the current Housing Law and sub-law documents that do not require investors to publish the legal documents of the building. such as land use right certificate for private ownership, approved design, project settlement (audited). If the investor does not publish transparent records, residents do not have enough information to determine common and private ownership.

In fact, when handing over the building documents to the management board, the investor is required to hand over documents such as completion drawings and parking area floor plans. However, Mr. Khanh said that because the documents are not required to be certified or notarized, the investor can hand over parking area drawings that are not in accordance with the original documents, and it is also not possible to determine whether the construction cost of the parking area is included in the apartment sale price or not.

The current management and operation of apartment buildings involves five entities, including state management agencies, investors, management boards, management and operation units, and apartment owners. When there is a dispute between residents and investors, the intervention of state management agencies is required. "However, with current legal regulations, it seems that state agencies stand aside and let investors decide for themselves," Mr. Khanh said, citing that when disputes arise, residents cannot request the Department of Construction or the Department of Natural Resources and Environment to provide building records.

"The bottleneck in apartment disputes is that state agencies do not make public construction documents for the people. Only when people have legal documents can they clarify which areas are jointly owned and which are privately owned, and can disputes be resolved quickly," said Mr. Khanh.

In addition to the above reasons, Mr. Nguyen Ngoc Tuan, Chief Inspector of the Ministry of Construction, said that disputes over common and private ownership in apartment buildings are also due to lack of legal awareness, lack of cooperation between investors and the management board representing residents; investors arbitrarily change functions, encroach on and use common ownership, do not hand over, or do not hand over complete apartment documents to the management board.

Doan Loan

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