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Investors may not sell more than 70% of condotel apartments

The condotel development projects in Da Nang

In addition, the opinions also suggest that land for condotel should be considered land for commercial services with a duration of no more than 50 years.

On April 7, in Da Nang, the Vietnam Construction Association held a conference on developing and managing Condotel legal and practical facilities.

According to Mr. Dang Viet Dung (Vice Chairman of the Vietnam Construction Association, Head of the Department of Propaganda and Training of Da Nang Party Committee), condotel projects have been booming over the past time. However, who control and manage this type? The potential risks for the buyer are not strictly regulated.

Many risks, not clear

“The legality of this type of regulation has not been clearly defined to lead to ambiguous ambiguity in the management of the law to make it difficult to manage and risk the buyer. Meanwhile, the ownership of the condotel, the state management agencies and ministries are also different opinions, “Dung said.

The condotel development projects in Da Nang
The condotel type has been developing strongly in Da Nang and other provinces.

Meanwhile, Tran Ngoc Hung (Chairman of the Vietnam Construction Association) is concerned about the inadequacies such as buyers of condotel apartments have been granted the state red book or not? And there are homeowners who are not free to condotel their own apartment beyond the specified date due to contract with the owner should cause controversy over time.

Mr. Vu Van Phan, deputy director of the Department of Real Estate and Housing Management, Ministry of Construction said that the inspection team of MONRE came to Nha Trang and checked out the condotel condos for any modifications in the law of this type.

“Vietnamese law does not currently have a word called condotel, however we can understand this type of apartment tourism. Being a tourist apartment must be managed according to the law of tourism and tourist apartments, only for tourism, “he said.

According to Mr. Phan, condotel is a type of legal investment not prohibited so it can do but need to do the law. Actually this type of law does not have anything. When investing, under the Investment Law, when building, the land law, real estate and when put into management and use in accordance with the law of tourism.

“About condotel land ownership is commercial-leased land with a lease term of 50-70 years, after expiration, it can be extended,” said Phan.

Mr. Chan said that the concern is that the current foreigners have the right to buy housing so that the condotel is allowed to buy or not?

Le Hoang Chau, Chairman of the HCM City Real Estate Association, said that the risk of investors buying condotels is even in the buying and selling phase.

For example, investors can be risky even when buying condotel apartments where the investor calculates the annual return on the value of the condotel apartment when selling. Thus, the actual amount of annual profits is paid by the investor himself, not the profit from the business paid by the investor.

“The price has been calculated by investors, so the return of capital is very quick, pushing the risk to investors when buying condotel apartments,” Chau said.

Investors must keep 30% of the apartments

Chau said the HCM City Real Estate Association proposed amending the Land Law of 2013 to implement a long-term stable land use regime for commercial, service and tourism land and non- agriculture .

Investors must keep 30% of the apartments
Investors of condotel projects want condotel to be a long-term residential land. However, state management agencies believe that this is commercial-service land for 50 years.

As such, developers of land use projects will be obliged to pay land use levies at market prices to the state budget, similar to those for land use levies. This will increase the transparency of the real estate market, generate more revenue and avoid losing the state budget.

“Based on that, buyers of condotel products in resort projects will be issued with long-term land use and land use right certificates. In addition, the association recommends foreign individuals to buy condotel apartments for investment, but related to security and defense issues should be considered, “Chau said.

Meanwhile, Tran Dinh Khanh, deputy head of the Department of Housing Management and Real Estate Market, Da Nang Department of Construction said that the real estate business law of 2014 does not contain any specific regulations on trading, condotel transfer, especially condotel condotel futures formation.

“In the case of condotel apartment is granted long-term ownership certificate, it is not unlike apartment, it is difficult to ask the owner not to stay in the apartment was issued certificate. This raises the danger of forming residential units, causing overload of technical infrastructure and social infrastructure in the project area. It can be said that this is the biggest difficulty in state management for the condotel type, “Khanh said.

Mr. Khanh recommends that condotel be the type of apartment for short term stay, not residential unit and propose to apply the standard condotel infrastructure standard similar to the construction hotel.

“It is recommended to issue a certificate of land use rights and ownership of condotel for customers for the purpose of using land as commercial land for not more than 50 years,” Da Nang Construction Department said.

On the management, operation and exploitation of condotel, Khanh suggested when deciding the investment policy of the project should clearly define the objectives and constraints from the beginning for the owner and owner of condotel in the direction: Investors can only sell no more than 70% of condotel condos in the project,This means that the owner must own at least 30% of condotel units to ensure the responsibility of the owner during the project implementation as well as commitments with customers.

In addition, the owner is responsible for managing, operating, exploiting and distributing profits with owners of condotel apartments as agreed by the parties in the form of a framework contract.

In case condotel owner wants to terminate the subleasing contract with the owner, the condotel must be transferred to the owner or other customer, not self-managed or self-lease and stay in the apartment.

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Investors may not sell more than 70% of condotel apartments
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