The Law on Real Estate Business was enacted in 2014 to regulate issues arising from the sale, purchase, transfer, real estate service business …
1. Having a capital of VND 20 billion to trade real estate
With high value goods such as real estate, investors also need more capital to ensure their business, stable capital turnover. In order to conduct real estate business, the investor must establish an enterprise or a cooperative with a legal capital of not less than VND 20 billion (According to Article 10 of the Law on Real Estate Business 2014).
For households and individuals doing small and irregular real estate business, they are not required to establish enterprises but must declare and pay taxes fully. Real estate investors who do not establish enterprises in accordance with regulations, may be fined with a fine of between VND 50 million and VND 60 million in accordance with Article 57 of Decree 139/2017 / ND-CP.
2. Conditions for foreigners to buy houses in Vietnam
Clauses 2 and 3, Article 14 of the Law on Real Estate Business stipulates: Overseas Vietnamese, foreign organizations and individuals may hire and purchase real estate for use; be allowed to buy, rent, rent to buy houses, use as offices … However, the purchase, sale and transfer of foreign land must meet a number of conditions in accordance with the law of Vietnam. Specifically, Article 76 of Decree 99/2015 / ND-CP stipulates:
- Foreign organizations and individuals eligible to own houses in Vietnam can only buy and rent houses from investors of housing construction projects;
- Foreign organizations and individuals can own no more than 30% of the total number of apartments of an apartment building;
In case there are many apartment buildings for sale or lease in a ward or equivalent administrative unit, foreign organizations and individuals may own no more than 30% of the apartments of each apartment building and no more than 30% of the total apartments of all apartment buildings.
3. Having not been granted a Red Book is only required to pay a maximum of 95% of the purchase
Clause 1 Article 57 of the Law on Real Estate Business stipulates: In cases where the buyer has not been issued a certificate of land use rights, ownership of houses and assets attached to land (Red Book), the seller cannot collect more than 95% of the contract value. The remaining amount will be paid by the buyer when authorized by the competent authority
On the other hand, Clause 4, Article 13 of the Law on Real Estate Business also stipulates that the investor must carry out procedures to apply for the Red Book to the buyer and tenant within 50 days from the date of handing over the house or building. build. Investors who do not carry out procedures to apply for the Red Book to the purchaser, the lessee buys or does not provide the relevant legal documents and papers shall be fined from VND 250 million to VND 300 million (Point d, Clause 3, Article 57 of the Degree 139/2017 / ND-CP).
4. The minimum social housing area is 25m2
According to Clause 2, Article 7 of the Law on Real Estate Business, the State always encourages and creates all conditions for organizations and individuals to invest in building social houses.
Currently, regulations on social housing are specified by the Ministry of Construction in Circular 20/2016 / TT-BXD. Accordingly, social housing is built by individuals or organizations for sale or lease, if it is an apartment, the minimum use area must be 25m2, including toilets; if it is a living room of a social house, it must meet a number of minimum criteria as follows:
- The room area used must not be less than 10m2;
- Average use area is not less than 5m2 for a person;
If social houses are built adjacent and low-rise for sale or lease, each room must be built in a closed (with toilet area). In case of leasing, it is possible to use a common toilet area for many rooms, but it is necessary to arrange separate toilet areas for men and women …
5. Sale of houses formed in the future must be guaranteed by banks
Under the provisions of Article 5 of the Law on Real Estate Business, houses and construction works in the future of organizations and individuals are allowed to be put into business. However, the transfer of a sale and purchase contract or lease purchase of a future formed house must meet the conditions specified in Article 55 and Article 56 of the Law on Real Estate Business, specifically:
- Have papers on land use rights, project documents, construction drawing designs approved by competent authorities, construction permits, papers on acceptance of the completion of good infrastructure construction corresponding art according to project progress …
- The investor has sent a notice to the provincial housing management agency and received the agency’s reply on whether the house is eligible for sale or lease-purchase;
- The investor must be guaranteed by a commercial bank to guarantee the investor’s financial obligations to the customer when the investor fails to hand over the house according to the schedule committed to the customer …
In the case of selling or renting a commercial housing in the future but not yet guaranteed by the bank, the investor may be fined from VND 250 million to VND 300 million.
6. Conditions for practicing real estate brokerage
Organizations and individuals dealing in real estate brokerage services must set up enterprises and must have at least 02 persons with real estate brokerage practice certificates. If an individual business is independent, he / she must have a real estate brokerage practice certificate and register a tax code and pay tax according to law provisions.
According to Article 58 of Decree 139/2017 / ND-CP, a fine of between VND 10 million and VND 15 million for one of the following acts: Doing business in independent real estate brokerage services without certificates practice or practice certificate expired according to regulations; Erasing, repairing, lending, leasing or renting, borrowing real estate brokerage practice certificates to carry out activities related to real estate brokerage.
In addition, a fine of between VND 30 million and 40 million for one of the following acts: Doing business in real estate brokerage without establishing an enterprise according to regulations, not enough people with a brokerage practice certificate. real estate according to regulations or practice certificates expired according to regulations; No real estate contracts or real estate brokerage contracts are incomplete with the main contents stipulated in Article 61 of the Law on Real Estate Business.
7. Is the real estate brokerage contract notarized?
Real estate brokerage activities together with real estate consulting and real estate management are among real estate services that must be contracted when the parties conduct transactions and exchange with each other. In the 2014 Law on Real Estate Business, the contents related to real estate service business are stipulated in Chapter IV – Real estate service business.
Accordingly, brokerage contracts as well as other real estate service contracts must be made in writing. The notarization of this document is agreed by the parties. Thus, real estate brokerage contracts do not necessarily have to be notarized.
However, parties engaged in real estate services who need to pay attention to establishing service contracts must have all the contents stipulated in Article 61 of the Law on Real Estate Business such as: Names and addresses of the parties; Object and content of the service; Requests and results, duration of service provision; Service fees, remuneration, service commissions …
If brokers or other real estate service contracts do not make a contract or a real estate service business contract with insufficient contents as prescribed, the subject may be subject to a fine of up to a fine of between VND 30 million and VND 40 million (Article 58 of Decree No. 139/2017 / ND-CP).
8. Penalty to the investor of up to 300 million if the house is transferred without a Red Book
Red book is one of the conditions for carrying out procedures for transferring houses and land. The investor of a real estate transfer project without a Red Book may be fined up to VND 300 million. Specifically, Clause 4, Article 57 of Decree 139/2017 / ND-CP stipulates that the investor of a real estate business project is fined from VND 270 million to VND 300 million in the following cases:
- Assigning all or part of the project in contravention of prescribed procedures;
- Assigning all or part of a project without fully meeting the requirements or the prescribed conditions;
- Assignment without a land use right certificate, when there is a dispute over land use rights or distraint to ensure judgment execution;
- Handing over houses and construction works to customers when the construction is not completed according to the progress stated in the approved project, not yet ensuring connection with the regional infrastructure system, not fully completed. the outer part (for cases of handing over houses or rough construction works) or having not yet completed the pre-acceptance test of putting houses and social infrastructure works into use according to regulations …
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