Prohibited acts in real estate business in Vietnam

To control the situation of real estate business activities, the Vietnamese state has issued regulations on prohibited acts in the real estate business, along with sanctions to handle such violations. So specifically, what behaviors are prohibited and how are sanctions handled? Let’s find out with Lawyer X through the following article:

Legal grounds:

– Civil Code 2015 Amended and supplemented in 2017

– Criminal Code 2015 Amendments and Supplements 2017

– Law on Real Estate Business 2014

– Decree 139/2017/ND-CP

Consulting content:

What is the real estate business?

Clause 1, Article 3 of the 2014 Law on Real Estate Business stipulates: “1. Real estate business is the investment of capital to carry out construction activities, purchase, receive an assignment for sale or transfer; lease, sub-lease, lease-purchase real estate; real estate brokerage services; real estate trading floor services; moreover, real estate consulting services or real estate management for profit”.

Prohibited acts in the real estate business

According to Vietnamese law, prohibited acts in the real estate business include:

– The real estate business does not meet the conditions prescribed by law.

– Besides, decide the investment in real estate projects that are not by the master plan or plan approved by a competent state agency.

– Moreover, failure to disclose or incompletely and truthfully disclose information about real estate.

– Fraud and deception in real estate business.

– Illegally mobilizing and appropriating capital; using capital mobilized from organizations and individuals and advance money from buyers, lessees, and lessees to buy future real estate for improper purposes as committed.

– Failing to perform or incompletely performing financial obligations to the State.

– Not last, issuing and using real estate brokerage practice certificates in contravention of this Law.

– Lastly, collecting fees, charges, and other money-related to real estate business in contravention of the law.

Administrative sanctions

According to the law, the level of administrative sanction prescribed as follows:

– Violating regulations on the real estate business, so a fine ranging from VND 50,000,000 to VND 60,000,000 shall impose for one of the acts prescribed by the law on the real estate business.

– Besides, violations against regulations on real estate service business, a fine ranging from VND 10,000,000 to VND 15,000,000 shall impose for one of the acts prescribed by the law on real estate business.

– Violations against regulations on management and use of information on housing and real estate market; so a fine ranging from VND 30,000,000 to VND 40,000,000 shall impose for one of the acts prescribed by the law on real estate business.

– Moreover, violating regulations on training and fostering knowledge of real estate brokerage practice and real estate trading floor operation; A fine ranging from VND 2,000,000 to VND 5,000,000 shall impose for one of the acts prescribed by the law on real estate business.

– Lastly, violating regulations on training and fostering professional knowledge and skills in apartment building management and operation; so a fine ranging from VND 10,000,000 to VND 20,000,000 shall impose for one of the acts prescribed by the law on real estate business.

Civil sanctions

Civil sanctions in the field of real estate business mainly apply to real estate business contracts. Contracts in the field of real estate perform as civil contracts.

Consequences of a void contract:

– An invalid civil contract does not give rise to, change or terminate rights. Civil obligations of the parties from the time of establishment.

– When a civil contract is invalidated, the parties shall restore the original state and return to each other what they have received; if it is not possible to return it in kind, it must be paid in cash, except where the transaction assets, yields, and profits are confiscated according to the provisions of law, the party at fault causing damage must compensate.

Criminal sanctions

Depending on the specific criminal case, the criminal may be subject to one of the following penalties:

– Impose non-custodial reform for up to 3 years of imprisonment from 6 months to 3 years

– Imprisonment from 02 years to 07 years or from 05 years to 12 years in prison

The offenders may also be subject to a fine of from VND 10,000,000 to VND 150,000,000, a ban from holding certain posts, practicing certain professions, or doing certain jobs for 1 to 5 years.

Related article:

Procedures for setting up an insurance business in Vietnam

Conditions for foreigners to establish a company in Vietnam

Related question:

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