Legal issues in the operation and management of apartment buildings in Vietnam

In order to manage apartment buildings effectively, the requirement to build and perfect the legal system for apartment building management is becoming urgent, especially issues related to ownership, because this is the main source of information. the basis and basis for specific legal regulations surrounding the management of condominiums. LSX Lawfirm will give you an article about: “Legal issues in the operation and management of apartment buildings in Vietnam”, as follows:

Legal grounds

• Law on house 2014
• Decree No. 99/2015/ND-CP

For apartment ownership in Vietnam

For apartment ownership in Vietnam

So, for an ordinary apartment building project, after being put into management and operation, there will be a relationship between 03 main entities including: Investor – Residents (represented through the Board of Management) – Unit provides apartment management services.
However, in some cases, the investor can also play the same role as the resident, when the investor also owns the apartments or the area in the commercial and service area (for with mixed-house projects with both residential and commercial and service areas).
Besides, it is also impossible not to mention another subject who is the user but not the owner. Those are the people who use the apartment on the basis of the transaction of borrowing, renting, renting and buying apartments of other owners or investors.

From the perspective of an agreed transaction relationship, the relationship between the above subjects can be established on the basis of:

• The relationship between the service provider and the service user under the apartment building operation management service contract (between the operation management unit and the Management Board). In this relationship, a common problem is that before the establishment of the Board of Directors, the investor (maybe through a subsidiary of the investor) will usually take charge of the management and operation of the apartment building. In many cases, the investor sets out binding regulations in favor of the investor right in the apartment purchase and sale contract.
• Buyer and seller relationship according to the purchase and sale contract between the investor and the owner of the apartment. Usually, even in apartment purchase and sale contracts, the investor can make provisions to limit the right to use or possess the shared areas or equipment.

If viewed from the outside, this relationship is simply the relationship of the service hirer (residents) through the representative of the Management Board and the service provider who are the operating management units. However, the theoretical origin and nature of the arising rights are related to the regulations on ownership, which is directly related to the regulations on common and private ownership.

According to the provisions of Clause 1, Article 10 of the Law on Housing 2014, the private part in the apartment building includes:

(a) The area inside the apartment including the balcony area, the lot attached to the apartment;

(b) Other areas in the apartment building are recognized as private property for the owners of the apartment building;

(c) System of technical equipment for private use attached to the apartment or attached to another area under private ownership.

According to the provisions of Clause 2, Article 10, the shared ownership of an apartment building includes

(a) The remaining area of ​​the apartment building other than the privately owned area; community house of the apartment building;

(b) The space and system of load-bearing structures, common technical equipment in the apartment building, including frames, columns, load-bearing walls, house walls, dividing walls of apartments, floors, roofs, etc. terraces, corridors, stairs, elevators, exits, litter cages, technical boxes, power supply systems, water supply, gas supply, communication systems, radio, television, exit water, septic tank, lightning, fire fighting and other parts not under the private ownership of the apartment building owner;

(c) Technical infrastructure system outside but connected to that apartment building, except for technical infrastructure system used for public purposes or subject to handover to the State or to the investor management according to approved project contents;

(d) Public works in the apartment building area but are not subject to investment and construction for business or handed over to the State according to the approved project contents, including public yards, flower gardens, and parks. and other works identified in the contents of the approved housing construction investment project.

Determining the importance of the common ownership relationship in an apartment building, the 2015 Civil Code (which will take effect from January 1, 2017) has dedicated one article (Article 214) to regulate joint ownership in the apartment building, whereby:

Firstly

The area, equipment and other assets shared in the apartment building as prescribed by the Law on Housing are jointly owned by all owners of the apartments in that house and not divided. , unless otherwise provided by law or otherwise agreed by all owners.

Secondly

Owners of apartments in an apartment building have equal rights and obligations in the management and use of the property specified in Clause 1 of this Article, unless otherwise provided for by law or otherwise agreed. .

Thirdly

In case the apartment building destroyed, the rights of the apartment owner shall comply with the provisions of law.

Thus

According to common civil law, residents/users as co-owners have the right to decide on these common properties. The question is whether the common areas and equipment under common ownership are under the full decision of the co-owners. For example, a terrace defined by the Housing Law as being jointly owned; but can residents/users decide to use the terrace for commercial purposes (assuming 100% of residents agree ). Not only the terrace, but other common areas and properties can also apply similarly. In fact, there are also many apartment buildings that use community living areas, terraces; flower gardens, etc. to exploit business such as leasing, even transferring to increase revenue for the area. apartment.

If

viewed in terms of the nature specified in the Housing Law; the use purpose of these common areas fixed and is part of a housing construction project. Even if these areas and properties are under common ownership; it does not mean that the residents can decide to adjust the purpose and function of these areas or equipment; because that is already the case. Adjusting the basic design is also part of the project’s content. These adjustments and changes are related to technical issues such as function, design of the building, affecting the performance and safety of the building.

It said that the common ownership rights of residents in an apartment building considered and regulated with specific characteristics compared to the common regulation on common ownership in the Civil Code. In other words; the residents can only exercise the rights of the common owner in accordance with the purpose of the project (including design; purpose of use, etc.) on the basis of consensus on a proportional basis; certain approvals according to the apartment building conference or on the basis of authorization/decentralization for the Management Board.

You can also refer to the article about: Procedures to establish a real estate brokerage company in Vietnam; or Prohibited acts in real estate business in Vietnam or General regulations on real estate business activities in Vietnam; Conditions for establishing a real estate brokerage company in Vietnam.

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