HCMC property developers tied down by land use fee troubles

Many real estate developers in Ho Chi Minh City, the country’s southern economic hub, are tied down by problems related to land use fees, even after their projects came into operation.

Such legal problems have kept buyers from building their houses or investors from completing procedures to grant land use rights or house ownership certificates to customers.

Novaland Group has three multi-function complex projects in Phu Nhuan district experiencing trouble. The group’s subsidiaries Nova Sagel, Merufa Nova, and Nova Nam A, which are the investors of these projects, proposed local authorities support early completion of the remaining legal procedures pertaining to their projects.

However, land use fee levels for their projects have not been approved although the companies paid estimated land use fees in advance.

Also in the same situation are Nova Sasco Co., Ltd. with a high-rise service, trade and apartment complex in Tan Binh district; Nova Richstar JSC with a similar project in Tan Phu district; No Va Real Estate Investment JSC with the Long Thanh My residential complex in Thu Duc city; and Nova Rivergate Co., Ltd with an apartment, officetel, office and trade center complex in District 4.

Hung Thinh Corporation is no exception. It repeatedly sought land use fee level approval for its Lavita Garden high-rise apartment project, covering 15,314.5 square meters in Thu Duc city.

However, the fee level has not been approved although the corporation paid VND29 billion ($1.16 million) in advance, the highest level proposed by the municipal Department of Natural Resources and Environment. Completion of procedures for granting house ownership certificates to purchasers also made no headway.

Hung Thinh’s another project, Melody Residences in Tan Phu district, was handed over to customers in 2017. The corporation is implementing procedures verifying supplementary financial obligations due to planning adjustments. However, the granting of land use right or house ownership certificates to customers is facing difficulties as the project is under legal review.

Meanwhile, the Him Lam residential complex in Thu Duc city developed by Him Lam Real Estate Business JSC also got stuck. It is a component project of the North Rach Chiec New Urban Area project, whose main investor is Real Estate 10 JSC.

The project completed site clearance compensation in 2003 and infrastructure construction in 2010. However, Him Lam has not yet received land to make land use fee payments and implement procedures for granting house ownership certificates to customers since Real Estate 10 failed to fulfill its responsibility as the main investor regarding site clearance and infrastructure construction for the North Rach Chiec New Urban Area project.

Novaland, Hung Thinh and Him Lam are only few among many real estate developers in the southern metropolis facing obstacles related to land use fee payment.

The municipal Department of Natural Resources and Environment reported that in the nine months of 2022, HCMC has a total of 395 projects implementing procedures for granting land use right certificates, an increase of 43 projects compared to the same period in 2021.

According to its director Nguyen Toan Thang, HCMC aims to issue about 20,000 land use right and house ownership certificates to buyers in housing projects this year.

Previously, the department had planned to coordinate with other departments, agencies and project investors to grant such certificates to owners of 37,421 eligible houses.

Thang admitted that the handling of procedures for granting land use right and house ownership certificates to buyers across the city has encountered problems, slowing down progress.

He attributed the slow handling of procedures to the application of many relevant laws in the implementation process and investor violations of legal regulations on investment procedures as well as land, housing and construction laws. In particular, many investors have used land use rights for apartments to be built in future as collateral for mortgages, while others have encountered problems related to the performance of additional financial obligations.

Therefore, in order to achieve the set goals, the department will focus on handling projects with construction violations and those under review to determine supplementary financial obligations due to planning changes, he said.