On November 28, 2023, with 465 out of 494 delegates participating in the vote of approval (making up a percentage of 94.13%), the National Assembly officially passed the amended Vietnam real estate law, which will come into effect on January 1, 2025.
This new Vietnam real estate law is a significant legislative project aimed at adapting to the development trends of technology and enhancing the efficiency of real estate resource management.
The following article will provide basic information on some key points of this Vietnam real estate law.
Types of Real Estates Allowed for Transaction in the Vietnam Real Estate Law:
The types of real estates permitted for real estate transaction under the amended Vietnam real estate law include:
1. Existing residential properties and those to be formed in the future.
2. Existing construction works and those to be formed in the future, including constructions serving purposes such as education, healthcare, sports, culture, offices, commerce, services, tourism, accommodation, industry, and mixed-use constructions.
3. Land use rights with existing technical infrastructure in real estate projects.
4. Real estate projects.
Additional Principles in Real Estate Service Business, Real Estate Exchange Activities in the Vietnam Real Estate Law:
The 2023 Vietnam real estate law supplements principles in real estate service business, the organization and operation of real estate exchanges, real estate transactions through real estate exchanges, conditions for managers operating real estate exchanges.
Addition of Conditions for Real Estate Consulting Services, Real Estate Management Services in the Vietnam Real Estate Law:
The 2023 Vietnam real estate law adds conditions for organizations and individuals engaging in real estate consulting services and real estate management services, including rights and obligations of parties involved in real estate consulting services, the scope, and principles of real estate consulting and management services.
Regulations on Real Estate Business Rights for Vietnamese Nationals Residing Abroad in the Vietnam Real Estate Law:
For Vietnamese nationals residing abroad, in order to ensure consistency with the spirit of the Land Law (amended draft), the National Assembly Standing Committee has revised the regulations. Vietnamese nationals residing abroad, as defined by Vietnam nationality laws, have the right to engage in real estate business in Vietnam, including buying, renting, or leasing residential and construction properties, similar to Vietnamese citizens within the country. The existing policies for overseas Vietnamese not recognized as Vietnamese citizens remain unchanged.
Regulations on Conditions for Future Residential and Construction Projects in the Vietnam Real Estate Law:
The National Assembly Standing Committee suggests that the government regulates in detailed decrees under the Vietnam real estate law, directing provincial-level state management agencies for real estate business to assess the conditions of housing projects for business and respond in writing to investors regarding the eligibility of housing for sale or lease, taking responsibility for the issued documents.
Regulations on Down Payments in Real Estate Transactions in the Vietnam Real Estate Law:
Regarding down payment regulations in residential and construction business transactions in the future, to ensure an accurate representation of the essence of down payments and reduce risks for buyers, especially the weaker party, the amended draft Vietnam real estate law states that project developers can only collect a deposit of up to 5% of the sale or lease price for residential properties, construction works, or the floor area within the construction project. This payment can only be collected from customers when the residential or construction project meets all the conditions specified by this Vietnam real estate law.
The deposit agreement must clearly state the sale or lease price for residential properties, construction works, or the floor area within the construction project.
Real estate projects on paper can only be put up for real estate transaction when there is one of the documents related to land use rights, such as land allocation decisions, land use right certificates, ownership of residential properties, and land use rights…
Regulations on Payment for Real Estate Sales in Future Residential Business in the Real Estate Law:
Regarding payments in transactions for houses to be formed in the future, the new Vietnam real estate law has stipulated that customers will pay 95% of the contract value, with the remaining amount paid when they are granted the land use right certificate and ownership of the property.
As a result, customers retain a portion of the contract value during the waiting period for the issuance of the land use right certificate and property ownership.
On the part of the project developer, they must fulfill financial obligations (land rent, taxes, fees related to land) before transferring the entire or part of the real estate project.
Additionally, the project developer must have a decision on land use, lease, or permission to change the land use purpose, but not necessarily a land use right certificate for the entire or part of the transferred project.
How Real Estate Attorney in Vietnam Could Help Buyer or Seller under Vietnam Real Estate Law?
A real estate attorney in Vietnam can play a crucial role in facilitating and safeguarding the interests of both buyers and sellers in real estate transactions under the Vietnam real estate law.
Attorney For Real Estate Buyers in Vietnam:
Legal Due Diligence:
- Conducting thorough legal due diligence on the property to ensure there are no legal issues or disputes associated with it.
- Verifying the ownership status and the legitimacy of the seller.
Document Review:
- Reviewing and interpreting contracts, agreements, and other legal documents associated with the property transaction.
- Ensuring that all necessary documents, such as land use rights certificates, are in order.
Negotiations and Contract Drafting:
- Assisting in negotiations with the seller to secure favorable terms.
- Drafting or reviewing the purchase agreement to protect the buyer’s interests and ensure legal compliance.
Title Search:
- Verifying the property’s title and ensuring it is clear of any encumbrances or legal issues.
- Confirming that the seller has the legal authority to sell the property.
Financial Considerations:
- Advising on financial aspects, such as taxes and fees associated with the property purchase.
- Assisting in understanding and complying with financial regulations related to real estate transactions.
Legal Representation:
- Providing legal representation in case of any real estate disputes in Vietnam under Vietnam real estate law or legal challenges that may arise during or after the transaction.
Attorney For Real Estate Sellers in Vietnam:
Preparation of Legal Documents:
- Assisting in the preparation of all necessary legal documents for the sale of property in Vietnam.
- Ensuring compliance with local real estate laws and regulations.
Disclosure Requirements:
- Advising on the legal obligations of sellers to disclose relevant information about the property.
- Helping sellers avoid legal liabilities by ensuring proper disclosure.
Negotiations and Contract Drafting:
- Negotiating on behalf of the seller to achieve favorable terms.
- Drafting or reviewing the sales agreement to protect the seller’s interests.
Title Clearance:
- Resolving any issues related to the property’s title to ensure a clear transfer to the buyer.
- Clearing any encumbrances that may affect the sale.
Tax Implications:
- Providing guidance on tax implications associated with the sale of the property.
- Advising on strategies to minimize tax liabilities.
Closing Procedures:
- Facilitating the closing process and ensuring that all legal requirements are met.
- Overseeing the transfer of ownership and ensuring proper registration.
Legal Representation:
- Offering legal representation in case of real estate disputes in Vietnam under Vietnam real estate law or challenges that may arise from the sale.
