Removing legal bottlenecks first step to save property market

Removal of legal bottlenecks is paramount to saving the ailing real estate market, wrote Nguyen Van Dinh, a Vietnamese land law researcher.
A few years ago, when I was in charge of project legal affairs at a real estate company, one of my colleagues told me about his visit to a state agency for land-related procedures. A staff member of the Department of Natural Resources and Environment said when explaining the reason for not signing the application form: "I really want to help you, but at this time, I only want to be safe."
'Wait! Wait! Wait!'
The story of my old colleague made me think a lot. Until the February 17 national conference on promoting the real estate market chaired by Prime Minister Pham Minh Chinh, the problem became more and more obvious. Chairman of the Ho Chi Minh City Real Estate Association Le Hoang Chau said the two biggest challenges that led to the dissolution of more than 1,200 property businesses in 2022 are legal problems and difficult credit access. He estimated administrative procedural issues account for 70% of the woes property developers face. This rate received the nod of National Financial and Monetary Policy Advisory Council member Le Xuan Nghia.
Novaland chairman Bui Thanh Nhon added: "We just want support in terms of mechanism. Businesses nationwide propose the Prime Minister direct the removal of legal problems facing their projects. This congestion has lasted for many years without solutions."

Administrative procedural issues account for 70% of the woes property developers face in Vietnam, according to Le Hoang Chau, chairman of Ho Chi Minh City Real Estate Association. Photo courtesy of Vietnam News Agency.
So why are legal problems causing so many troubles for the property market?
To answer that question, I cite the half-joke, half-truth of my friend, who is an official of a department in Da Nang - the most livable city in Vietnam: "In this time, understanding and following the law is very difficult and we may encounter problems when enforcing the law. If you want to do something, you must be flexible and if you want no mistake, temporally, you should not do it yet”.
That is the context of Da Nang today, after the two former chairmen and many department leaders were found to be involved in criminal cases. Currently, the central city stipulates that investors who want to obtain a construction permit must fulfill land-related financial obligations. This is its own regulation as the Vietnamese law does not feature the condition. In addition, businesses cannot pay the land fees early for a construction license because the city's land valuation process is often lengthy.
Broadly speaking, it is not just the story of a locality in land management. The land valuation process for an urban project usually lasts 2-3 years, or even 3-4 years for some, greatly affecting the business plan of the investor when the land price is an important input parameter to determine the sales price in line with the business strategy of the enterprise. So which price will the investor offer when they do not know the land use fees to be paid?
It can be said that land valuation is always complicated and sensitive and poses many potential negative risks. Continuous prosecutions and arrests of officials for wrongdoings in land valuation across the country have led to fears of making mistakes and taking responsibility among officials and civil servants.
The land law stipulates four specific land valuation methods, namely direct comparison, deduction, potential income and surplus, but localities are crying because each method produces a different result. So who would dare approve the land price for fear that one day the post-audit agency would ask a question: why not this price but that one?
Recently, a locality came up with the initiative to hire an international "Big 4" auditing unit to re-audit the results of the land valuation consultant and even consulted the Ministry of Finance and the Ministry of Natural Resources and Environment, inspection and audit agencies on the land price determination results. Post-audit agencies are mobilized to pre-audit to help officials feel secure to approve land prices.
We have talked a lot about the requirement of a unified, feasible, economical, effective, timely, accessible and easy-to-implement legal system for the people to create a competitive, healthy business and investment environment. But in fact, we have an inconsistent legal system, leading to three bad ways in enforcement: deliberately taking advantage of the "loopholes" in the law to profit; accidentally making mistakes due to inadequate awareness; and doing nothing for fear of making mistakes and bearing responsibility.
Worryingly, the third is becoming more and more popular in many localities, directly leading to "congestion" in handling legal procedures, causing project delays, supply scarcity, and soaring real estate prices.
This fear has become a common phenomenon. The issues are clear, but localities still need the guidance of central agencies before making decisions.
Therefore, I completely agree with the opinion of businesses and experts that solving problems in the real estate market must start from legal issues because this is the cause of all causes. It is necessary to immediately remove the conflicts, contradictions and overlaps between laws.
For example, the current Land Law is not clear, with conflicts between this regulation and others. Specifically, Article 59 gives the provincial people's committees the power to allow organizations to change the land use purpose, but Article 118 stipulates the cases in which land use rights must be auctioned.
So, in which case is the enterprise allowed to change the land use purpose, and in which case must the land use rights be auctioned? This unclear regulation has hindered the relocation of polluting factories from urban areas.
Another outstanding issue is that the planning has a term of only 10-15 years and quickly becomes outdated while the project duration and land use period are very long, up to 50-70 years. As a result, businesses who have operated for 10-20 years are worried that their projects no longer meet planning requirements.
Thus, the bottleneck removal must come from the law-making stage because an unclear legal system containing many contradictions and overlaps will be a great "challenge" for cadres and civil servants in law enforcement.
In principle, businesses and people are allowed to do everything that is not prohibited by law, but state agencies, officials and civil servants when performing their official duties can only do what the law prescribes. The “creativity” in law enforcement must be the “creativity” within a framework in order to avoid abuse of power, emotional or negative acts.
What mechanism protects creative staff?
If you want to do something right, you can't be fast, if you want to do it fast, you must accept a few mistakes. That is the real situation of law enforcement in our country over the past years, and changes are needed to remove bottlenecks and free up resources.
The 13th National Party Congress has set the goal: "Having appropriate incentive policies and mechanisms to protect officials and Party members who have a high combatant capacity; set an example in realizing the Party's principles and the State’s laws; dare to think, dare to speak, dare to do, dare to take responsibility, dare to innovate, dare to face difficulties and challenges, and act decisively for the common interest".
On that basis, the Politburo issued Conclusion No. 14-KL/TW dated September 22, 2021 on the policy of encouraging and protecting dynamic and creative cadres for the common good. The conclusion stated "Encouraging officials to apply creative thinking and breakthrough ways to remove bottlenecks in mechanisms and policies. When piloting, if officials fail to produce results or cause loses, the competent authorities must promptly identify objective and subjective causes and make an impartial assessment for appropriate settlement. If they strictly follow the policy and have a pure motive for the common good, they will be considered to be exempted from or get reduced punishments".
The Party's socio-economic development strategy for the 2021-2030 period also defines: "Speeding up the improvement of the legal system, mechanisms and policies to ensure synchronization and transparency of market factors to enable capitalization of resources, allocate them reasonably and use them effectively".
Thus, it is necessary to have a mechanism to protect cadres and remove bottlenecks from the amendment and improvement of laws. I think that once there is a clear, transparent, unified and synchronous legal system, cadres and civil servants cannot delay procedure processing as this behavior will create grounds for legal action under the Law on Administrative Procedures.
Building a synchronous and transparent legal system will clear up the market and create an abundant supply of products, helping reduce real estate prices and leading to the recovery and development of the whole economy.
- Read More
New Politburo resolution like 'downpour after a drought' for Vietnam's private sector: entrepreneur
Resolution 68 of the Politburo, Vietnam's highest decision-making body, will be a driving force of the breakthrough development of the private sector, said Vu Van Tien, chairman of conglomerate Geleximco.
Economy - Mon, May 19, 2025 | 2:45 pm GMT+7
Work starts on 5km Tu Lien bridge across northern Vietnam's Red River
Construction of Hanoi's Tu Lien bridge, which will be 5.15 kilometers long across the Red River, commenced on Monday.
Infrastructure - Mon, May 19, 2025 | 2:11 pm GMT+7
New State Bank of Vietnam circular removes obstacles for stock market status upgrade
A new State Bank of Vietnam (SBV) circular will address bottlenecks in managing indirect investment capital flows and create favorable conditions for foreign investors, contributing to achieving a status upgrade for the country's stock market.
Finance - Mon, May 19, 2025 | 11:20 am GMT+7
IPPG eyes 8,000-hectare free trade zone project near Long Thanh Airport in southern Vietnam
Vietnam's Imex Pan Pacific Group (IPPG), led by chairman Johnathan Hanh Nguyen, is exploring a 8,000-hectare free trade zone project near Long Thanh International Airport in the southern province of Dong Nai.
Companies - Mon, May 19, 2025 | 8:49 am GMT+7
Exporters diversify orders to reduce reliance on single market
Facing the risks posed by trade barriers and potential reciprocal tariffs from the U.S., many Vietnamese businesses have proactively shifted their market strategies, stepped up trade promotion, and diversified their orders to reduce reliance on a single market.
Companies - Sun, May 18, 2025 | 7:55 pm GMT+7
Satellite cities seen as a solution to Hanoi's urban expansion
As Hanoi faces mounting population pressure and land scarcity, satellite cities are emerging as a solution for urban expansion and long-term real estate investment, said experts and industry insiders.
Real Estate - Sun, May 18, 2025 | 7:45 pm GMT+7
Vietnam launches first Napas-Mastercard co-badged card
The National Payment Corporation of Vietnam (Napas) and Mastercard has launched the country's first co-badged card, combining domestic and international payment capabilities.
Companies - Sun, May 18, 2025 | 6:59 pm GMT+7
Dai Hung oil field project phase 3 to earn Petrovietnam extra $2.5 bln in annual revenue
The Dai Hung oil field project phase 3 offshore Vietnam has begun commercial production and is expected to generate an additional $2.5 billion in annual revenue for state-owned Petrovietnam (PVN) and around $450 million to the state budget.
Companies - Sun, May 18, 2025 | 1:48 pm GMT+7
SCG Chemicals loses $87 mln from Vietnam-based Long Son Petrochemicals in Q1
The $5.2 billion Long Son Petrochemicals (LSP) complex, located in southern Vietnam, eroded THB2.9 billion ($86.7 million) in Q1/2025 net profit of SCG Chemicals (SCGC), an arm of Thailand’s Siam Cement Group (SCG).
Companies - Sun, May 18, 2025 | 10:16 am GMT+7
Vietnam's property major Sun Group starts $1.43 bln urban project in southern Vietnam
Sun Group, one of the top property developers in Vietnam, on Friday broke ground on a VND37 trillion ($1.43 billion) urban area project in the southern coastal province of Ba Ria-Vung Tau.
Real Estate - Sun, May 18, 2025 | 8:00 am GMT+7
Vietnam, US 'agree on direction' for negotiating reciprocal trade agreement
Vietnam and the U.S. have reached a high level of agreement on issues of principles, approaches, content orientations, and plans regarding their negotiations for a reciprocal trade agreement, the Vietnamese government's news portal reported.
Economy - Sat, May 17, 2025 | 10:42 pm GMT+7
Q1 profit of Samsung’s 4 major Vietnam plants drops 39% to lowest in decade
Four major factories of Samsung Electronics in Vietnam posted a total profit of KRW966 billion ($689.4 million) in the first quarter of this year, down 39% year-on-year.
Companies - Sat, May 17, 2025 | 3:30 pm GMT+7
Our prices 30-40% lower than DHL, Viettel Post: Gozo CEO
Gozo, a Vietnamese logistics startup, currently holds a key competitive advantage: its prices are 30-40% lower than those of major players like DHL and Viettel Post, said Phan Duy Minh, founder and CEO of Gozo Express.
Companies - Sat, May 17, 2025 | 12:27 pm GMT+7
New rules on foreign investors’ acquisition of shares in Vietnamese credit institutions
Vilaf lawers provide an insight into the government's new Decree 69/2025/ND-CP which amends a number of provisions of Decree 01/2014/ND-CP on foreign investors’ acquisition of shares in Vietnamese credit institutions.
Banking - Sat, May 17, 2025 | 8:17 am GMT+7
Vietnam forecast to become world’s second-largest rice importer by 2025-2026
Vietnam is projected to become the world’s second-largest rice importer in 2025-2026, only after the Philippines, as the country must ramp up imports to meet export demand amid falls in domestic production, according to the latest World Agricultural Supply and Demand Estimates, released by the US Department of Agriculture (USDA).
Southeast Asia - Fri, May 16, 2025 | 11:36 pm GMT+7
The Trump Organization gets okay for $1.5 bln property project in northern Vietnam
A $1.5 billion golf, eco-tourism and urban complex proposed by a joint venture between Hung Yen Investment and Development Group and IDG Capital, which represents The Trump Organization, has received in-principle approval from the Vietnamese Government.
Real Estate - Fri, May 16, 2025 | 10:46 pm GMT+7
- Infographics
-
Vietnam PM urges world's food industry leader JBS S.A to invest in livestock farming, meat processing
-
Pakistani, Indian sugar bans won't affect Vietnam market: association
-
Wood pellet exports down but Japan buys more
-
Additional capital of FDI companies up 93% on-year
-
FDI capital expansion surges 66% in first half
-
Vietnam GDP grows 6.42% in six months