Ho Chi Minh City Department of Construction: The real estate market still has many downsides
Accordingly, the report on the real estate situation in the first 6 months of 2021, the Department of Construction pointed out many limitations of the real estate market in Ho Chi Minh City.
Firstly, the system of legal regulations is still inadequate and lacks synchronization, making it difficult to have solutions to prevent and propose solutions to handle violations in real estate business activities, which can form hot spots and complications.
For example, the situation of an apartment being sold to many people is due to the inadequacies of the old regulations of the 2005 Housing Law and Decree 90/2006 of the Government, which create conditions and assign many authorities to investors such as approving technical designs, exempting construction fees when the project is approved, accepting the completion of the project, mobilizing capital, etc. without being controlled by State agencies.
The project has not completed legal procedures but the investor has made a deposit, reserved a place, promised to buy and sell…; Real estate environment units, project development, investment cooperation, business cooperation… have signed housing purchase and sale contracts with customers, but before that, real estate businesses did not publicly disclose or did not fully and honestly disclose information about real estate as prescribed.
Second, legal regulations on investment, housing, land, and urban planning have not been unified in the transition and promulgation process. Many projects are in the process of investigation, inspection, examination, audit, and review of legal procedures, which leads to a situation of shirking responsibility, slow resolution by a number of State management agencies, and has not ensured coordinated and synchronous processes. Therefore, the State needs to have timely solutions to remove obstacles in procedures on investment, construction, urban planning, land, and housing.
Third, the form of capital mobilization for developers is specifically regulated in the Housing Law, Decree No. 99/2015/ND-CP of the Government to ensure the capacity of investors in commercial housing development, limit weak investors, rampant capital mobilization and protect the legitimate rights of home buyers. Particularly for cases of signing contracts in the form of deposits, reservations, registrations, … where the investor does not use capital to build houses but the deposit is in accordance with civil law.
However, current investors receive advances, deposits, and agreements to reserve places for customers with very large amounts of money, in some cases accounting for 80% of the apartment value. Determining the purpose of using the investor’s deposit is still limited, not under the authority of the Department of Construction, making it difficult to handle the scope for investors in real estate business activities.
In the document, the Department of Construction recommends that the Ho Chi Minh City People’s Committee direct departments and branches to strengthen propaganda and publicize legal information on projects to prevent and stop illegal real estate business activities such as: selling an apartment to many people; mobilizing capital from customers through deposits, reservations, etc.
Recommend that the Ho Chi Minh City Police closely monitor the development of the real estate market; investigate and handle subjects providing false information about real estate projects, urban technical infrastructure, investors who violate the law to the extent of criminal prosecution, etc. or show signs of fraud in real estate brokerage and transactions.
