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Vietnam Law on Real Estate Business 2024

On November 28, 2023, the National Assembly passed the Real Estate Business Law 2023. With the introduction of this Law, regulations on real estate business, rights and obligations of organizations and individuals in business are established real estate business and state management of real estate business. The Real Estate Business Law 2023 will take effect from 2025. Therefore, in 2024, the Real Estate Business Law 2014 remains effective. To learn about the outstanding new regulation of the Real Estate Business Law 2023 to prepare for its application next year, Viet An Law Firm would like to present the article below.

real estate company

Promulgation context of the Law on Real Estate Business 2023

The real estate business is an important economic sector, playing a role in promoting socio-economic development, solving housing problems for people, and contributing to social stability. In recent years, Vietnam’s real estate market has made strong developments, positively contributing to the country’s socio-economic development. However, there are still some limitations in the process of implementing the provisions of the Real Estate Business Law 2014 as follows:

  • First, regulations on the scope of regulation of the Law on Real Estate Business, on trading in houses and construction works, in houses and construction works formed in the future have not been clearly stated.
  • Second, there has been a phenomenon in which real estate brokerage teams are weak in expertise and business ethics, causing damage to customers. Or the fact that real estate trading floors have not yet ensured the management of real estate transactions, prevention of money laundering, and protection of consumer rights. In addition, state management of real estate business activities is still ineffective, leading to speculation, price manipulation, and inflated real estate prices.
  • Third, solutions related to regulating and stabilizing the real estate market do not ensure synchronization and lack of proactive resources, so the implementation of regulation and stabilization still faces many difficulties and slow impacts.
  • Fourth, the construction and management of information systems serving real estate business management is still slow, faces many problems, and does not meet requirements. The work of inspection, inspection, and handling of violations in the field of real estate business does not work well, not regularly or continuously.

Therefore, the promulgation of the Real Estate Business Law 2023 to overcome the above shortcomings is extremely urgent, to contribute to the development of a healthy, stable, and sustainable real estate market.

Highlights at Law on Real Estate Business 2023

Scope of regulation

To clarify the scope of regulation, the Real Estate Business Law 2023 has added regulations on cases of non-applicability or more specific regulations on types of real estate put into business in turn in Clause 2. Article 1, Article 5 of the Law on Real Estate Business 2023. Specifically, the new Law adds cases where the Law does not apply:

“2. This law does not apply to the following cases:

  1. a) Agencies and organizations carrying out housing sales, construction projects, and land use rights transfer due to bankruptcy, dissolution, or division; Transfer of ownership of houses, construction works, and land use rights due to merger or consolidation according to the provisions of law;
  2. b) Agencies, organizations, and units selling, transferring, and leasing real estate that are public assets according to the provisions of law on management and use of public assets;
  3. c) Organizations and individuals purchasing houses, construction works, transferring land use rights according to judgments or decisions of the Court or judgments or decisions of commercial arbitration or decisions of state agencies have authority when resolving disputes;
  4. d) Organizations and individuals transferring, leasing, and subleasing land use rights are not in the case of investors trading land use rights that already have technical infrastructure in real estate projects;
  5. d) Renting social housing to workers and laborers is done by the Vietnam General Confederation of Labor, which is the agency in charge of the investment project according to the provisions of housing law.”

Specifically, Article 5 has added specific regulations on types of existing construction works and future construction works, including construction works with educational purposes, medical, sports, cultural, office, commercial, service, tourism, accommodation, industrial, and construction work with multifunctional service.

It can be seen that the Law on Real Estate Business 2023 also amends and supplements several contents compared to the Law on Real Estate Business 2014 to clarify and ensure openness and transparency of real estate business activities and avoid overlap and interference of the legal system.

Regarding the disclosure of information about real estate put into business

In Article 6 of the Law on Real Estate Business 2023, instead of general regulations on real estate content as in the Law on Real Estate Business 2014, the new Law specifically stipulates cases required to fully disclose exact and accurate information about real estate projects; housing and construction projects formed in the future; available housing and construction projects; land use rights with technical infrastructure in real estate projects.

Unlike the previous Law, the provision here is supplemented that public information must be updated when there are changes.

The deposit to buy a house to be built in the future should not exceed 5% of the selling price

According to the new regulations in Clause 5, Article 23 of the Law on Real Estate Business 2023, it is stated: real estate project investors are only allowed to collect a deposit of no more than 5% of the selling price, lease-purchase price of houses, construction works, construction floor area of a construction project from a customer when the house or construction project has met the conditions for being put into business according to the provisions of the Law.

The deposit agreement must clearly state the selling price, lease-purchase price of the house, the construction project, and the construction floor area of the construction project.

Housing and construction projects formed in the future can only be put into business when there is one of the documents on land use rights; construction permit; notice of construction commencement; and documents on acceptance of completed technical infrastructure construction.

The amendments and supplements to this regulation are intended to protect the interests of customers and limit the situation where real estate project investors mobilize capital when they are not qualified to put real estate into business.

Conditions for real estate brokerage services

According to Article 61 of the Law on Real Estate Business 2023, organizations and individuals providing real estate brokerage services must establish real estate service businesses and must meet the following conditions:

  • There must be regulations on real estate brokerage services;
  • Must have physical and technical facilities that meet operational requirements according to Government regulations;
  • Have at least 01 individual with a real estate brokerage certificate;

Before operating real estate brokerage services, the brokerage service enterprise sends information about the enterprise to the state management agency on real estate business at the provincial level where the enterprise was established for approval. Posted on the housing and real estate market information system.

Conditions for individuals practicing real estate brokerage

Individuals practicing real estate brokerage must meet the following conditions:

  • Have a real estate brokerage practice certificate.
  • Must practice in a real estate trading service business or a real estate brokerage service business.

Scope of real estate brokerage services

The scope of real estate brokerage services specified in Article 62 includes:

  • Find partners that meet customers’ conditions to participate in negotiations and sign contracts.
  • Authorized representative to perform work related to procedures for purchasing, transferring, leasing, subleasing, and leasing real estate.
  • Providing information and support for parties in negotiating and signing contracts for purchase, sale, transfer, lease, sublease, and lease purchase of real estate.

Remunerations and commissions of real estate brokerage

In Article 63 of the Law on Real Estate Business 2023, it is stipulated that real estate brokerage remunerations and commissions are as follows:

  • Individuals practicing real estate brokerage are entitled to remunerations and commissions from businesses providing real estate trading floor services or businesses providing real estate brokerage services.
  • The level of remuneration and real estate brokerage commission is agreed upon by the individual real estate broker and the real estate trading floor service business or real estate brokerage service business. Real estate brokerage remuneration does not depend on the price of the real estate brokered transaction.

The effect of Real Estate Business Law 2023

According to the provisions of Article 82 of the Law on Real Estate Business 2023, this Law takes effect from January 1, 2025. The Law on Real Estate Business 2014 will expire from the date the Law on Real Estate Business 2023 takes effect.

Clients who need advice on regulations on real estate business law, housing law, enterprise law, and related amended decrees, please contact Viet An Law Firm to get the best support.

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