The National Assembly (NA), Vietnam’s highest legislative body, passed the amended Law on Real Estate Business on Tuesday with a 94.13% endorsement.
The law will take effect on January 1, 2025.
One of the provisions of the new law (Clause 5, Article 23) restricts a real estate investor from collecting advance payments/deposits of more than 5% of the total value for the sale or lease of built and to-be-built properties.
Sellers or landlords cannot collect payments of more than 95% of the sale/lease agreement if buyers or tenants are yet to get their land-use rights or ownership certificates. The remaining payment can be collected only after the documents have been handed over.
The NA Standing Committee has asked the government to issue a detailed decree on the responsibility of state agencies in verifying to-be-built properties per Article 24. The aim is to have agencies make their property assessments available for investors to obtain sale or lease approval.
Unqualified investors
Article 40 of the new law has various provisions to prevent the selection of unqualified investors for the transfer of a real estate project, in whole or in part.
Investors can only transfer projects after they have completed their financial obligations, including land-use and land-lease fees.
Vu Hong Thanh, head of the NA’s Economic Committee, said provisions of Article 40 sought to prevent speculative transactions and facilitate those based on genuine demand.
He also said that the real estate business law does not deal with social housing for workers including those invested in by the Vietnam General Confederation of Labor (VGCL), because it is a not-for-profit activity.
The law allows Vietnamese living abroad to conduct real estate business activities including buying or leasing properties just as citizens living in the country. For people of Vietnamese origin without Vietnamese citizenship, the rules remain unchanged.