Right from the beginning of 2022, the Government has issued several new Decrees with many changes related to real estate policies. How will these policies affect the real estate market? What regulations do real estate investors need to pay attention to? Let’s find out with Lawyer X the article “New policies affecting the real estate market in 2022”. So, we invite you to read along.
Legal grounds
- Construction Law 2014
- Construction Law Amendment 2020
- Decree 02/2022/ND-CP
- Decree 16/2022/ND-CP stipulates penalties for administrative violations in construction
New policies affecting the real estate market in 2022
The new Decrees introduce many regulations that have a relative influence on the real estate market. These regulations are reflected in Decree 02/2022/ND-CP and Decree 16/2022/ND-CP. Accordingly, business owners should pay attention to the following real estate policies:
Changing conditions of the real estate business
Decree 02/2022/ND-CP, including many new regulations related to real estate business conditions.
First, this Decree requires transparent disclosure of information including:
– Information about the business, about the real estate, put into business; mortgage of houses, construction works, real estate projects put into business; quantity and type of real estate products to be traded; sold, transferred and the quantity and type of remaining products are continuing to trade.
So, the above information must publicize on the enterprise’s website, at the head office of the Project Management Board (for real estate investment projects), and on the real estate trading floor (for real estate investment projects). with the case of business through the real estate trading floor).
This is a mandatory condition to ensure transparency in the real estate market.
The remarkable point in Decree 02 is that there is no longer a regulation on legal capital for real estate businesses. This is said to help increase the entry of organizations and individuals into the real estate business market.
The financial potential of real estate project investors is also a mandatory condition. Accordingly, the investor has equity not less than 20% of the total investment capital for projects with a scale of less than 20ha; not less than 15% of the total investment capital for projects with a scale of 20ha or more.
Mandatory use of general contract template
Issued together with Decree 02 are 08 contract forms to use for the purchase and sale of apartments, tourist apartments, and office apartments combined with accommodation; It is worth mentioning that, according to this Decree, all real estate business activities need to apply these standard models according to Decree 02.
Meanwhile, according to the previous regulations in Decree 76: “The model contract in real estate business is issued together with this Decree for reference by the parties in the process of negotiating and signing the contract”.
Requiring the parties to sign contracts in the form of Decree 02 helps the contracts used in real estate business activities to ensure the rights and obligations of the parties.
Increased fines for violations of real estate business
In Decree 16/2022/ND-CP, many violations in real estate business activities have been tightened. Some behaviors increase up to more than 06 times. The sharp increase in the fine shows a strong move in tightening management with real estate. So, this is to limit violations and ensure the interests of buyers. Specifically like:
With business entities
– Real estate business in the case of having to establish an enterprise or cooperative without setting up a fine of between VND 100 and 120 million; the old level was 50-60 million dong.
– Secondly, no public, incomplete or incorrect disclosure of real estate project contents; investment projects on housing construction shall be fined from 100 to 120 million VND; the old level was 50-60 million dong.
– Failure to provide information on construction investment progress or the use of advance payments upon request; not allow the purchaser or the lessee to inspect the actual construction progress; the quality of works according to regulations shall be fined from 100 to 120 million dongs; the old level was 50-60 million dong.
Activities related to transfer
– Collecting fees related to real estate transfer in contravention of regulations will be fined from 100 to 120 million VND; the old level was 50-60 million dong.
So, signing a contract for sale or purchase or lease-purchase of a house or construction work without attaching land use rights to the house; that construction work is fined from 120 to 160 million dongs, the old rate was 60 to 80 million dongs.
– Failure to notify the buyer of restrictions on ownership of houses and construction works (if any) will be fined from VND 120 – 160 million, the old rate is VND 60 – 80 million.
– Collecting money from the buyer, the lessee to buy the real estate formed in the future not on the schedule for the project implementation as agreed by the parties or collect more than the percentage of the contract value as prescribed, be fined from 400 – 600 million VND, the old level was 60 – 80 million VND.
– Transferring the whole or a part of the project in contravention of the prescribed procedures shall be fined from VND 800 million – VND 1 billion, the old rate was VND 270 – 300 million.
– Handing over houses and construction works to customers before the housing construction investment has not been completed, the fine will be from VND 800 million to VND 1 billion, the old rate is VND 270 to 300 million.
Tighten real estate brokerage activities
Also in Decree 16, the fines for real estate brokerage services increased sharply. To manage and eliminate the problem of brokers turning into storks, blowing prices, or drawing “ghost” projects.
Specifically like:
| Behavior | Old fine* (million VND) | New fine (million VND) |
| Doing business in independent real estate brokerage services without a practicing certificate or expired practice certificate as prescribed | 10 – 15 | 40 – 60 |
| provides real estate brokerage services and is both a broker and a contract performer in a real estate transaction. | No penalty | 40 – 60 |
| Do not provide, provide incomplete or provide dishonest records and information about the real estate that they broker. | 40 – 50 | 200 – 250 |
Please see more
- Procedures for renting houses for foreigners in Vietnam
- Regulations on the issuance of red books for apartment houses in Vietnam
- Procedures for selling apartments to foreigners in Vietnam
Frequently asked questions
Real estate business is the investment of capital to carry out construction activities, purchase, receive an assignment for sale or transfer; lease, sublease, lease purchase of real estate; real estate brokerage services; besides, real estate trading floor services; real estate consulting or real estate management services for profit.
Accordingly, Article 5 of the Law on Real Estate Business 2014 stipulates the types of real estate put into the business including:
– Houses and construction works are available for organizations and individuals;
– Besides, houses, construction works formed in the future of organizations and individuals;
– Houses and construction works are public property permitted by competent state agencies to be put into business;
– Types of land that are allowed to be transferred, leased, or sub-leased according to the provisions of the law on land are allowed to trade in land use rights.
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