Sophouse is a term that is mentioned a lot in the real estate market, also known as a commercial townhouse, which is a type of housing combined with business that is quite popular in Vietnam today. So what is shophouse land? What is the shelf life as well as the advantages and disadvantages of a shophouse, and what is the legal status of a Shophouse apartment in Vietnam? Let’s find out with Lawyer X in the content of the article below.
Legal grounds
- Land Law 2013
What is Shophouse Land?
Currently, the concept of shophouse has not been specified in legal documents on construction, land, housing, business and commerce.
Shophouse, also known as commercial townhouse, is a type of building that combines houses and commercial shops. This type was formed due to the needs of the market and has been built in some localities, especially in Hanoi and Ho Chi Minh City.
Shophouse is the type of land used to build commercial townhouses – a model of housing combined with a commercial center/store. Shophouse land is usually located in prime locations, central areas of cities, where the population is dense and the economy develops. The area of the plot is quite large because usually, Shophouse will be designed adjacent to each other to form a busy commercial and business street, attracting customers.
Located in a beautiful location in the city center, the price of Shophouse land is very high and increases over time. This is a real estate product that many investors choose and expect a lot of profit potential in the future.
What is the legality of Shophouse land?
Pursuant to Articles 125 and 126 of the 2013 Land Law, depending on the specific land use purpose or project, the use term of the shophouse is different:
Shophouse has a stable long-term use if it is built on residential land.
Shophouse has a useful life of not more than 50 years if it is located in a land lot allocated or leased by the State for the implementation of investment projects (when the term expires, the land user if there is a need to continue using it. the State shall consider extending the land use term but not exceeding 50 years).
How to determine deadlines:
- Factual basis (this is a definite basis but is not true for all cases).
- Shophouse is a townhouse, the normal use period is not more than 50 years, others have a long term of use.
- Shophouse is a podium apartment of an apartment project, usually the ownership term is 50 years.
- Legal basis: Check the Certificate (Red Book, Pink Book) of the investor or of households and individuals when they re-transfer.
Advantages of Shophouse
Prime location
When implementing project design, urban areas, investors often choose locations in major roads, project centers, where there are many people passing through to make Shophouse. Here, shophouses will easily attract potential customers from the apartment complex and surrounding urban areas. This is considered one of the factors to ensure a good business or rental shophouse.
Limited quantity
Since the shophouse serves the residents inside the project, the number of Shophouse apartments will also be reduced depending on the number of residents predicted, with mid-range projects, the number of shophouses will only account for 2-3% On the total number of apartments, more extensive projects such as urban areas can be up to 5%.
Due to the beautiful location and limited quantity when launching, it is not possible to meet all the demand, so shophouses are becoming more and more scarce.
Smart and convenient design
The design of shophouse apartments usually includes 2 separate floors, so it can be used with many different functions such as:
Opening a shop: With the advantage of location as well as beautiful design along with the separation between residential and business areas, shophouse is most suitable for opening shops, with the number of residents living right in the surrounding apartments. then this will be the plan to get a lot of profits quickly.
Shophouse for rent as an office: Shophouse not only has a beautiful design, large area, located on the ground floor, beautiful location in the whole apartment complex, large street frontage completely meets the criteria as a representative office for large companies and corporations.
Convenient to move
This is similar to choosing a store location with a large frontage, high traffic, easy access and attracting a lot of attention. Shophouse is chosen for locations near the entrance to the apartment building or with a parking area on the side of the road for many people to come and buy things quickly. In addition, to facilitate the development of Shophouses, investors often build a parking lot right in front of the store.
Good liquidity
One of the more attractive factors of shophouse is its high liquidity, due to factors such as location, design and limited quantity, investors can be assured of liquidity because it is easy to Easy to buy, sell and rent.
High profit from rental
Did you know that the exploitation rate of shophouses is up to about 8-12%/year, this number is far beyond whether you rent an apartment or deposit interest at the bank, less risky than investing in the stock market.
Opportunity to increase account value
Of course, if you can run your own business, open a store, a supermarket, that’s great. Shophouse has a large area, easy to do business in many fields. You also do not have to worry about the cost of renting space with exorbitant monthly prices, through which the value of your property also increases rapidly.
Disadvantages of Shophouse
Shophouse apartments often have a higher selling price than apartments, requiring investors to spend a larger amount than buying an apartment.
Owning a prime location combined with scarcity, it is obvious that the selling price will be higher than other types of real estate such as villas and townhouses, requiring investors to spend a larger amount of money to own. it.
The population community must be large
Shophouse is often used for business and trade, so it needs a densely populated community to ensure profit and be able to make a profit from trading or renting.
Ownership restrictions
In some projects and urban areas, when you own a Shophouse, you will be granted a red book, and a pink book but only a 50-year term.
The difference between Shophouse and townhouses, townhouses
For investment purposes
When investing in a street house or a shophouse, investors tend to do commercial business or sublease. But the business service portfolio of a street house is much more diverse than that of a Shophouse. The same basic business services between a street house and a shophouse are convenient services for neighboring residents such as selling restaurants, fashion, convenience stores, mini supermarkets, and grocery business staples.
Because Shophouse has specific characteristics associated with urban planning, they will be more limited than street houses in business activities that require higher expertise such as headquarters, corporate offices, hotel services, or specific goods and services of a population or local character.
About location and design
Shophouse is usually located in a fully planned urban area, and is adjacent to the internal route of the urban area. In addition, the construction design of Shophouse is a hard plan design that cannot be adjusted nor can it be changed. Street houses are different, investors can apply for permits to change the structure, as well as rebuild independently without affecting the structure and planning of the adjacent houses. This makes the house on the street can be easily adjusted for higher use than the Shophouse for highly specialized business services such as office buildings, hotels, etc., as long as the land area has enough area to apply for. planning and construction permits.
About potential customers
The services provided by Shophouse are mostly aimed at customers located in that urban area, finding potential customers outside the urban area is more limited due to the specificity of planning and design. With the characteristics of being located on a high-traffic and easy-to-access street, in addition to customers in the vicinity, townhouses also attract a large number of visitors or regular customers. travel on that street due to the convenience of accessing services.
Please see more
- Solving land disputes of unknown origin in Vietnam
- Can production forest land be planted with fruit trees in Vietnam?
- Procedure for partial transfer of land use rights in Vietnam
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Frequently asked questions
The 2013 Land Law stipulates that when the State allocates or leases land to implement a project, the investor is granted a certificate of land use right for the entire project land area. At the same time, Clause 1, Article 188 of the Land Law 2013 and Article 118 of the Law on Housing 2014 stipulate that when the owner transfers a shophouse, a certificate of land use right must be obtained.
Older people, with a certain amount of capital, want a long-term investment channel with stable rental cash flow.
Investors want to add a safe channel, avoiding “putting all eggs in one basket” in addition to channels such as gold, foreign currency, securities, bank savings…
Individuals or families want to have townhouses or apartments for rent but want higher rents.
Parents want to make a long-term investment for their children when they grow up.
Individuals and organizations need good premises to do business in coffee, fast food, and high-class services.
Families and individuals need a place where they can both live and do business.
People who need living environment and utilities in apartments but do not want to live on high floors.
The “cash flow real estate” investor
Conclusion: So the above is Legal about Shophouse apartment in Vietnam. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
