Decree 96/2024 guiding the Latest Real Estate Business Law in Vietnam
On July 24, 2024, the Government promulgated Decree 96/2024/ND-CP providing guidelines on the Law on Real Estate Business. This decree encompasses several provisions related to the management and operation of real estate business, including procedures for project transfers, conditions for the operation of real estate trading exchange, and the mandatory standard contract templates required in real estate transactions.
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Basic information on Decree 96/2024 guiding the Latest Real Estate Business Law in Vietnam
Date of issuance: 24/07/2024.
Effective date: 01/08/2024.
Type of document: Decree.
Issuing authority: Government.
Signatory: Tran Hong Ha.
An individual engaged in real estate business activities is allowed to conduct a maximum of 10 transactions per year
Article 9.3 of the Real Estate Business Law 2023 clearly states: “Individuals engaged in small-scale real estate business are not required to establish a real estate business enterprise but must declare and pay taxes according to the law.” This provision applies to subjects of the Real Estate Business Law who are not required to establish investment projects when conducting business, hence the law has set a limit on the activities of this group.
According to point b, Clause 1, Article 7 of Decree 96/2024/ND-CP, the limit on the number of real estate transactions for individuals engaged in small-scale real estate business is clearly defined. Specifically, an individual engaged in real estate business is allowed to conduct a maximum of 10 transactions per year with a total contract value not exceeding VND 3,000 billion. This regulation aims to control and limit the spontaneous participation of individuals in real estate business activities, which could lead to instability and difficulties in market management.
Limiting the number of transactions not only helps to enhance professionalism in real estate business activities but also ensures transparency and effectiveness in state management. Individuals wishing to exceed this limit must register to establish a business following the law and comply with stricter regulations on taxes and other obligations related to business activities.
Operating conditions of real estate trading exchange
According to Article 15 of Decree 96/2024/ND-CP, the operating conditions of real estate trading exchange include:
The real estate trading exchange must meet the conditions stipulated in Article 55 of the Real Estate Business Law. Accordingly:
The legal representative of the enterprise and the manager operating the real estate trading exchange are responsible for the operation of the real estate trading exchange. The legal representative of the real estate trading exchange may also be the manager operating the real estate trading exchange.
The real estate trading exchange must have a name, a stable transaction address for over 12 months, and technical equipment that meets the requirements according to the activities of the real estate trading exchange.
The real estate trading exchange is responsible for implementing anti-money laundering measures and reporting on anti-money laundering in accordance with anti-money laundering law.
Activities of real estate trading exchange
According to Article 16 of Decree 96/2024/ND-CP, the activities of real estate trading exchange encompass various important functions, ensuring legality, transparency, and efficiency in real estate business processes. The specific activities include:
Legal compliance and business conditions check: The trading exchange must ensure that all real estate properties involved in transactions comply with legal regulations, including verifying the legality of documents and business conditions. This step is crucial in helping buyers, sellers, and state management agencies clearly understand the legal status of the properties.
Providing real estate information: Trading exchanges are responsible for listing and providing information on real estate properties that meet the conditions for transactions. This ensures that buyers can easily access transparent and accurate information about the products.
Brokerage services: The real estate trading exchange assists parties in negotiating and concluding transactions. This brokerage activity must comply with the strict conditions of the Real Estate Business Law 2023, ensuring that transactions are conducted legally and protecting the rights of the parties involved.
Supporting contract signing and payment: The trading exchange not only helps parties prepare and sign contracts but also assists with payment, document handover, and property transfer. This ensures that the transaction process is fast, safe, and legally compliant.
Information and transaction storage: One of the important functions of the trading exchange is to store information related to completed transactions, ensuring transparency and facilitating inspection and supervision by regulatory authorities.
Transaction confirmation: Real estate transactions conducted through the trading exchange will be confirmed in writing or electronically. This regulation helps establish a clear legal basis for transactions, ensuring the rights of the involved parties.
Overall, the regulations on the activities of real estate trading exchange in Decree 96/2024/ND-CP reflect the professionalization and standardization of this sector. This not only enhances the transparency and credibility of the market but also protects consumers, ensuring that real estate transactions are conducted legally, safely, and efficiently. Furthermore, the regulations on information storage and transaction confirmation help state agencies better control real estate business activities, thereby reasonably regulating the market.
Use of personal identification numbers
According to Clause 5, Article 40 of Decree 96/2024/ND-CP, when Vietnamese citizens have a personal identification number and national databases, such as those on residency, investment registration, and business registration, have been connected and operational, they can use their personal identification number in place of identification documents such as identity cards, citizen identification cards, passports, and other types of documents in procedures related to real estate business activities. This regulation simplifies procedural processes and reduces the paperwork requirements under the law governing the real estate business.
According to Clause 2, Article 31 of Decree 96/2024/ND-CP, the process for issuing real estate brokerage practice certificates is as follows:
The Chairman of the Examination Council shall report on the organization and approve the examination results to the Chairman of the Provincial People’s Committee.
Based on the report and examination results, the Chairman of the Provincial People’s Committee shall approve the list of individuals eligible for the issuance of practice certificates (as per the form prescribed in Appendix XXII of the Decree).
Within 10 working days from the receipt of a complete and valid application, the Provincial People’s Committee shall print and issue the certificates.
The Provincial People’s Committee shall also be responsible for retaining the records of those who have been issued certificates for 10 years from the date of issuance.
Certificates shall be delivered in person at the office of the Provincial People’s Committee or sent via notification. If the recipient cannot collect the certificate in person, it will be sent by post.
This process reflects the strict and transparent procedures to ensure the legality of individuals engaged in brokerage activities.
Issuance of mandatory contract templates
Clause 2, Article 12 of Decree 96/2024/ND-CP prescribes 11 mandatory contract templates for real estate business transactions, effective from August 1, 2024, as follows:
Contract templates for housing business activities
Sale and purchase contracts for residential properties, and lease-purchase contracts for residential properties, according to the template in Appendix I issued with Decree 96/2024/ND-CP;
Residential lease contracts, according to the template in Appendix II issued with Decree 96/2024/ND-CP;
Contracts for the transfer of sale and purchase contracts, and lease-purchase contracts for residential properties and construction works, according to the template in Appendix XI issued with Decree 96/2024/ND-CP.
Contract Templates for Construction Activities
Sale and purchase contracts, and lease-purchase contracts for construction works; sale and purchase contracts, and lease-purchase contracts for areas within construction works serving tourism and accommodation purposes, according to the template in Appendix III issued with Decree 96/2024/ND-CP;
Lease contracts for construction works and areas within construction works serving tourism and accommodation purposes, according to the template in Appendix IV issued with Decree 96/2024/ND-CP;
Sale and purchase contracts, and lease-purchase contracts for construction works; sale and purchase contracts, and lease-purchase contracts for areas within construction work serving educational, healthcare, sports, cultural, office, commercial, service, industrial purposes, and mixed-use purposes, according to the template in Appendix V issued with Decree 96/2024/ND-CP;
Lease contracts for construction works and areas within construction works serving educational, healthcare, sports, cultural, office, commercial, service, industrial purposes, and mixed-use purposes, according to the template in Appendix VI issued with Decree 96/2024/ND-CP.
Contract templates related to real estate projects
Contracts for the transfer of land use rights with technical infrastructure within real estate projects, according to the template in Appendix VII issued with Decree 96/2024/ND-CP;
Lease and sublease contracts for land use rights with technical infrastructure within real estate projects, according to the template in Appendix VIII issued with Decree 96/2024/ND-CP;
Contracts for the transfer of entire real estate projects, according to the template in Appendix IX issued with Decree 96/2024/ND-CP;
Contracts for the transfer of part of real estate projects, according to the template in Appendix X issued with Decree 96/2024/ND-CP.
Above are some key legal aspects to note concerning the new regulations under Decree 96/2024 guiding the Latest Real Estate Business Law in Vietnam, effective from August 2024. For clients requiring legal advice on land valuation regulations, land law, civil law, corporate law, or related amendments, please contact Viet An Law Firm for professional support.
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