The repair and release of the Property Business Law are considered a milestone in the property market revolution. But there are also many hidden corners.
The new Property Business Code as a breeze blows the Vietnamese property market clearing the way for investors to get out of the messy paperwork and procedures. It can be clearly seen that the efforts of lawmakers waving away from the shadow of the “forest law,” but the Law on Real Estate Business has not yet been fully transparent and satisfactory, with the discrimination between the subjects of the first Private and many ambiguities in administrative procedures make it difficult for participants to pour money into the works.
Foreign investors are less welcome
One problematic point of the Law on Real Estate Business is the discrimination between foreign investors and domestic investors. This is reflected in the disadvantages of the interests and interests of foreign investors must accept when investing in Vietnam. In particular, the difference between the percentage of property value not handed over by domestic and foreign capital is collected is 20%. With this limited number, will they continue to pour capital into domestic projects?
Not only that, under the new law, foreign businesses are limited in the form of property business. Specifically, they are only invested in two directions, or built on land allocated by the state to sell, or rented to the house or sublease. Even so, they are not allowed to trade in purchased spaces, which can only be used to set up an office or production facility.
Funding conditions – hand open lines hamper
The former property business law stipulates that investors are allowed to raise capital when the works are commenced and have notified the Department of Construction. Products to capitalists will be home. However, the current law does not specify these issues.
Recognizing the shortcomings, the draft decree guiding the Housing Law has been amended by adding conditions for capital contribution to investors. In particular, the process of capital mobilization is conducted immediately after the clearance of the project site is completed and the handover of the boundary is committed in writing. At the same time, the process of raising capital will have to go through the approval and approval of the Department of Construction. However, there is a disadvantage for contributors because they will not receive housing.
It can be said that the modifications and additions are only relative because, together with accelerating the capital mobilization process, the draft also makes them more difficult to raise capital, taking advantage of the benefits. The capital contributors make them easy to procrastinate.
You can read more information at Vietnam Real Estate Market
Request for Guarantee – bright but not yet revealed
The Law on Real Estate Business obliges developers to have financial obligations to their customers. Accordingly, they have to underwrite the bank before selling or renting a house in the future. As such, they will face clients and take legal responsibility for delays in the handover process. This is a bright spot in the new Law for the benefit of consumers is guaranteed, but there is still an overlap point that the value of the guarantee is not mentioned, confusing both the investor and banks.
Property appraisal and property appraisal services
When the law was officially introduced in July 2015, the change in poverty pricing caused many businesses to fail. Specifically, from that point on, businesses will comply with the Law on Prices for pricing instead of the Law on Real Estate. This makes it difficult for businesses to remain loyal to the old Law because the Law of Price is not only different but also more rigorous and confusing.
Positive innovations in the Real Estate Business Act can be seen through efforts to overcome the unreasonable or lack of regulatory authority. But the parallel is the gray of the unrighteousness and there is still ambiguity between the laws. Hopefully in the near future, those responsible will soon have appropriate adjustments to ease investors’ breath as well as clear the way for Vietnam’s property market to be maximized.
You are reading the article “New Property Business Law – There Are Many Difficulties” in the section “Real Estate News” on the website: www.realestatevietnam.com.vn
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