Completing Legal Corridor for Real Estate Business

10:06:05 AM | 7/4/2024

Deputy Prime Minister Tran Hong Ha urged precise definitions of mixed-use office cum hotel (Officetel) and condominium cum hotel (Condotel) in the draft decree outlining certain provisions of the Law on Real Estate Business. In a recent live-streamed session chaired by Deputy Prime Minister Tran Hong Ha, stakeholders convened to deliberate on the aforementioned draft decree.

Opinions are gathered to finalize the amended draft law on real estate business, addressing existing gaps and proposing significant new regulations

Clarifying the concepts of Officetel and Condotel

At the meeting, receiving opinions from Government members (the Ministry of Natural Resources and Environment, the Ministry of Planning and Investment, the Ministry of Justice, the Ministry of Finance, the State Bank of Vietnam and others), Deputy Minister of Construction Nguyen Van Sinh explained and clarified various issues related to real estate projects whose only goal is construction investment or commercial investment. Does the investor have the right to transfer land and sell assets attached to land to organizations and individuals?

He also clarified regulations on information that needs to be disclosed about commercial real estate and projects, detailed regulations on determining small-scale real estate business, and regulations on real estate business projects subject to the Law on Tendering.

He also explained and clarified some other issues regarding regulations whether the transferring investor provides related documents, regulations on responsibility for carrying out market-regulating measures, regulations on the fund for granting real estate brokerage practice certificates, and regulations on confirmation of transactions executed via real estate exchanges, and cases where credit institutions, foreign bank branches, debt management and asset companies of credit institutions, and asset management companies of Vietnamese credit institutions transfer the entirety or a part of a real estate project to handle collaterals for debt recovery.

At the meeting, comments focused on construction projects and construction floors used in other business fields combined with providing accommodation, tourism and hotel services.

Deputy Prime Minister Ha directed the drafting agency to elucidate novel concepts pertaining to mixed-use office buildings cum hotel (Officetel) and condominium cum hotel (Condotel).

He emphasized, "Practices that have emerged and gained recognition in law must be codified with precision and clarity, avoiding redundant restatements."

During the discussion on regulations concerning information disclosure for real estate and commercial projects, Prof. Dr. Hoang Van Cuong, a member of the 15th National Assembly, recommended that enterprises lacking a website or information portal should ensure their details are accessible on local real estate websites or trading platforms within the property's vicinity. He further proposed that such information be prominently featured on the Ministry of Construction's housing and real estate market information system prior to any transaction, and only withdrawn upon completion of the transaction, with clear accountability for information authentication resting with the enterprise.

Clarifying conditions for individual real estate traders

Giving opinions on regulations on outstanding credit debt and corporate bond debt on the owner's equity of real estate businesses, officials from the Ministry of Finance and the State Bank of Vietnam requested the Ministry of Construction to meticulously study regulations on the ratio of the total outstanding debt (credit and bonds) to the total equity of real estate businesses, not the total investment value of their projects.

In addressing the qualifications for small-scale real estate enterprises, Prof. Dr. Hoang Van Cuong, Dr. Can Van Luc, and Dr. Le Xuan Nghia put forth a set of criteria for the drafting agency's deliberation: These include metrics such as sales and rental income, total investment volume, and the number of real estate transactions conducted annually.

Deputy Prime Minister Tran Hong Ha requested the Ministry of Construction to receive constructive opinions and conduct meticulous study to have very specific revenue criteria for individual real estate traders and supplement regulations on individual traders of future real estate.

Participants also gave comments for better regulations on procedures on notifications of future housing that is eligible to be sold, leased or transferred in whole or in part of a real estate project. They also suggested supplementing electronic real estate business contracts; conditions to ensure the operation of real estate trading floors; regulations on real estate brokerage and issuance of real estate brokerage practice certificates; measures to regulate the real estate market; and other issues.

Dr. Can Van Luc and Dr. Hoang Van Cuong urged the Ministry of Construction to delegate authority to localities and accredited organizations for the training and oversight of real estate brokerage activities. They also emphasized the need for establishing criteria to determine price indices, real estate trading indices, and inventory periods, thereby fostering effective regulation of the real estate market.

Dr. Nguyen Van Khoi, Chairman of the Vietnam Industrial Real Estate Association (VIREA), proposed adding social housing to the scope of regulation in the real estate market.

Meanwhile, Deputy Prime Minister Tran Hong Ha requested the drafting agency to review existing real estate transfer procedures, based on digital platforms, and not to create new ones.

The decree needs to promote decentralized management of real estate floors' activities, provide digitalized real estate services, integrate procedures without creating new ones, clarify legal responsibility, operational content and facilities to ensure safety, network security, corporate information and personal information, and connectivity connect with other real estate floors, he said.

Deputy PM Tran Hong Ha assigned the Ministry of Construction to build a knowledge program framework and conditions for organizing tests, conduct inspections, supervise training activities, issue real estate brokerage practice certificates, publicize information, establish a database and announce sanctions against violations. At the same time, the Ministry of Construction will continue to work with relevant bodies and experts to revise and complete the draft decree as scheduled.

By Duy Anh, Vietnam Business Forum