It is necessary to promulgate real estate deposit law so that home buyers can be assured

In the context of an increasing number of real estate projects in Vietnam that participate in transaction in the payment form of deposit, it is perhaps essential to strengthen management and control, adding specific regulations binding between the parties to ensure the highest safety for homebuyers at present.

Deposit is the obligor deposits a sum of money or valuable assets into a frozen account at a bank to secure the performance of an obligation. Payment and deposit procedures are in implemented in line with the regulations of the banking sector.

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According to Clause 4, Article 16 of the Law on Real Estate Business, prohibited acts include: Illegally mobilizing or appropriating capital of purchasers, lessees or real estate lessees or purchasers or the persons contributing capital in real estate business. If the owner mobilizes / appropriates the capital illegally then he/she must use capital.

Therefore, in the case of deposit trading, the owner does not use the funds because the money frozen in the bank account will not be regarded as misappropriation nor illegal capital mobilization.

Dr. Can Van Luc – Banking expert, Deputy General Director of BIDV, said: “International practice is that if customers want to buy something, they must deposit to have the priority to buy the product they want. The deposit contact is also a form of deposit, so it is not wrong in term of law. On the bank side, when participating in this contract, banks also comply with the provisions of law on bank.

In addition to the regulations for owners which do not allow to make illegal capital mobilization, the law also specifies the conditions for opening a sale of a project.

According to the Real Estate Brokerage Association, all owners must comply with the provisions of law, but beyond this scope, investors are completely creative, flexible to offer their own solution to introduce the project’s information in the most effective way, not necessary to wait until the opening of sales to start introducing.

Through the deposit contract, owners can explore the purchasing demand of the project, thereby proactively planning the business, predicting the number of customers, to be the basis for developing price policies, avoid the risks of speculation, virtual house purchasing.

Mr. Tran Nhu Trung – Deputy General Director of Nam Cuong Group commented: “Every tool has its goodness, it is important that how we use and how control it.”

With deposit amount in real estate transactions in Vietnam currently fluctuating from 10-20%, not too much compared to the total contract value, this level is safe for home buyers according to experts. However, in order to have legally binding provisions, it is necessary to revise, supplement and improve the law.

Mr. Nguyen Tran Nam, former Vice Minister of Construction, President of Vietnam Real Estate Association, also proposed: “Although the term of the frozen account is safe for buyers and sellers. But if the project does not qualify for sale, the dispute may occur. The contract should supplement the agreed clause in cases the seller fails to perform the commitment, there must be an agreement on a solution to equalize interests between the two parties. It is necessary to limit the above two points on controlling deposit levels and adding sanctions to protect home buyers. “

Lawyer Bui Quang Hung – Hanoi Bar Association also said that when customers agree to deposit to book place, it is necessary to ask the investor to determine the expected sale opening time to avoid the case of prolonged sale opening. On the State authority side, it is necessary to make a positive move soon, study within a few months or at least 6 months to promulgate new adjustments to ensure that the home buyers feel secured about this form. On the bank side, there must have regulations, management and control of commitment to return the money to the homebuyer in case the contract fails to fulfill.

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