Hard to Please Customers

Vietnam’s real estate market is known as a channel where investment is rumored to be made abundantly for a long time. And this has yielded great profit for many customers. Quite a few real-estate businesses have been set up while they possess very modest capital. As a result, the more real-estate firms are founded, the less sustainable the market is.

 

The fact that market “ball” gets broken has exerted a large impact on almost all project owners. Modest fund sources and limited mobilisation have caused hundreds of projects to be delayed and face various lawsuits.

 

 The current different status of the buyers is associated with their increased complaints to project owners. Recently, Times Tower project whose owner is Petro Vietnam Premier Recreation joint-stock company has been sued by dozens of customers due to slow progress. Actually, this began in early 2012 when there were signs of delay. Afterwards, tensions kept getting more serious and many customers who were not patient enough have put forward their proposal to withdraw fund from the project to the project owner. However, these requirements have not been met and this has led to increased disagreement between customers and project owners.

 

Times Tower project got implemented when the market was in the "hottest" period. The price reached over VND23 million per m2 in 2010 which was not too high at that time. Now that the market is in the dramatic downturn when other projects have to lower their prices to increase liquidity, Times Tower project customers cannot help feeling worried, resorting to the discount to promote the transaction. Sadly, even such a solution does not work when the buyers keep turning their back on the market. As a last resort, customers have sought to complain project owners for slow progress with a hope to withdrawing fund from the project.

 

Tricon Tower project whose owner is Minh Viet Investment Joint Stock Company was scheduled to deliver apartments to customers on December 31, 2011 or June 3, 2012 at the latest. However, the project has so far finished only the foundation and has ceased its construction for months. This has caused a wave of indignation for most customers. The fund withdrawal from the project is not successful when project owners have provided various reasons to justify this delay.

 

Not only delayed projects but also speedy ones are sued by customers. This has become a challenge for many customers as the working capital is mainly reliant on the buyers.

 

Recently, Splendora project of An Khanh joint venture got sued by the customers due to the speedy project implementation progress that shorten the customers’ installment payment time against the initial plan. In addition, project owners are sued as they have used cheap low-quality construction materials.

 

However, when reporters conducted investigations, many customers have acknowledged the fact and confirmed that these problems had come to the knowledge of customers and accepted by them beforehand. In fact, the suing stems from the fact that the market has lost liquidity, leading to the difficulty in selling apartments while the projects get implemented so quickly, resulting in customer’s failure to afford sufficient fund to complete the contract.

 

This is an excuse for customers’ complaints with an aim to discrediting the project owners, requesting the project owners to reconsider the selling price and adjusting the delivery schedule and payment progress. That customers denounce project owners’ derogation has exerted a serious impact on the reputation of Splendora joint venture project owner. Despite this, the project owners intentionally continue to realize commitments indicated in the contract signed with customers, causing increasingly serious disputes between customers and project owners.

 

Not only An Khanh joint venture but also many other project owners face the same situation. Recently, FLC group was delighted to announce the completion of FLC landmark condominium project whose progress achieved four months earlier against the commitment while almost all of the others get delayed due to the lack of fund. This seems good news and underpins the success of the group. On contrary, the hand-over of apartments to customers has met many difficulties as the customers are yet ready to receive their property. Worse still, arising complaints of the customers have driven project owners into hard circumstance.