New decrees, circulars will solve problems facing real estate projects: association
Draft decrees and circulars detailing and guiding the implementation of the Land Law 2024, once ratified, will resolve legal problems faced by real estate projects, said the Ho Chi Minh City Real Estate Association (HoREA).
The enforcement of the Land Law 2024 and related laws will remove many obstacles so that land becomes a resource for socio-economic development and the real estate market develops safely, healthily and sustainably, the association said in a document just sent to the Ministry of Justice and the Ministry of Natural Resources and Environment.
A real estate project in Ho Chi Minh City has remained idle since its launch in 2019. Photo by The Investor/Vu Pham.
It cited data from the Ministry of Construction as showing that in 2023, about 1,200 real estate and commercial housing projects across the country faced problems, mainly legal problems. Notably, 148 of those projects were in Ho Chi Minh City with legal problems at three levels.
Firstly, problems related to certain regulations, including the Land Law, proved to be the most difficult to solve, but with the laws and resolutions newly approved or about to be approved by the parliament, these problems will basically be solved, stated HoREA.
For example, regarding the regulation on land use to carry out commercial housing projects, Clause 1, Article 73; Point a, Clause 1, Article 169; Clause 2, Article 191; and Clause 1, Article 193 of the Land Law 2013 allow economic organizations to receive transfers of use rights for various types of land to implement investment projects, including commercial housing projects.
However, Point c, Clause 2, Article 22 and Clauses 1 and 4, Article 23 of the Housing Law 2014 only recognize developers of commercial housing projects if they have legal residential land use rights or have received the transfer of residential land use rights to build commercial housing, thus "invalidating" the open regulations of the Land Law 2013.
Secondly, there were problems related to some regulations of by-laws, typically those regarding specific land valuation. In particular, the main problem was the application of the "surplus method" to calculate land use fees and land rents of real estate and commercial housing projects in accordance with the government’s Decree 44/2014 and Circular 36/2014 of the Ministry of Natural Resources and Environment. As a result, many project developers could not fulfill their financial obligations to the state and customers did not have housing ownership certificates (pink books) issued.
In HCMC alone, about 100 projects with more than 60,000 apartments did not receive pink books due to problems with land valuation, the association said.
To fix this problem, the government has issued Decree 12/2024 amending and supplementing a number of articles of Decree 44, adding many new regulations that are feasible and closer to reality. This is expected to solve many problems in land valuation to calculate land use fees and land rents for real estate and commercial housing projects in 2024.
Finally, there were problems in law enforcement, including the “fear of taking responsibility” among some officials, civil servants, and state employees. The main reason for this situation was that some legal regulations were not clear enough, specific and synchronous, nor easy to understand.
Therefore, the HoREA proposed researching and contributing opinions to develop and complete draft decrees and circulars detailing and guiding the implementation of the Land Law 2024, especially those detailing the implementation of a number of articles of the Land Law; land prices; and compensation, support, and resettlement when the state recovers land.
Along with the implementation of the Land Law 2024, HoREA recommended synchronously implementing relevant laws such as the Housing Law 2023, the Real Estate Business Law 2023, and the Law on Credit Institutions 2024.
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