Terms you need to know in real estate transactions

VTC News•20/06/2023

Real estate is a hot industry, attracting much attention and chosen as a channel for wealth creation through investment. However, to understand the basics of real estate, it's necessary to know the most common terms.

Terminology according to the Law on Real Estate Business

Real estate exchange: a place where all activities related to real estate are concentrated, where investors and customers can easily search, research, and conduct transactions, as well as provide services for real estate business.

Real estate business: This involves investing capital to carry out activities such as construction, purchase, acquisition for resale, transfer; leasing, subleasing, lease-purchase of real estate; providing real estate brokerage services; real estate exchange services; real estate consulting services or real estate management services for profit.

Essential terms to know in real estate transactions - 1 — The real estate industry has many important terms that those interested need to know. (Illustrative image)

Real estate services: These are activities supporting real estate business and the real estate market, including real estate brokerage services, real estate valuation, real estate exchanges, real estate consulting, real estate auctions, real estate advertising, and real estate management.

Real estate transactions related to real estate business: These are the buying, selling, transferring, leasing, or lease-purchasing of real estate between organizations or individuals not engaged in real estate business and organizations or individuals engaged in real estate business.

Real estate auction: This is the public sale or transfer of real estate to select the buyer or transferee who offers the highest price, following the procedures of an auction.

Real estate transactions involving deferred or installment payments: This refers to the purchase or transfer of real estate where the buyer or transferee pays the purchase or transfer price in installments or deferred payments within the timeframe agreed upon in the contract.

Buying and selling houses and construction projects that are still under construction: This refers to the buying and selling of houses and construction projects where, at the time of signing the contract, the house or construction project has not yet been built or is still under construction according to the project documents, construction drawings, and specific progress schedule.

Additionally, there are real estate terms related to legal issues.

Red book: This is a land use right certificate issued by the Ministry of Natural Resources and Environment. This type of document has a red cover, so it is often called a red book.

Types of land for which land use certificates are issued: Agricultural land, forest land, aquaculture land, salt production land, and residential land in rural areas, issued by the People's Committee of the district, town, or city within the province to the land user.

Furthermore, since most land ownership certificates are issued to households, when transferring ownership or conducting civil transactions in general related to land use rights, the signatures of all family members aged 18 and above whose names are listed in the household registration book are required.

Pink book (Sổ hồng): This is a certificate of ownership of housing and land use rights, with a pink cover, hence the name "pink book". Currently, there are two types of pink books: the old book issued by the Ministry of Construction (issued before December 10, 2009) and the new book issued by the Ministry of Natural Resources and Environment.

Basically, the legal status of a land ownership certificate (sổ đỏ) and a house ownership certificate (sổ hồng) are similar. However, in addition to certifying land ownership rights, a house ownership certificate (sổ hồng) also confirms whether the land is for private or shared use (for private or shared use – typically an apartment building).

White land certificate: a document proving the right to use land recognized by the State. However, this type of document has been valid for a very long time (both before and after 1975).

Currently, the white land title certificate still has legal validity regarding land ownership. However, it is not valid for transactions. To be able to trade, the landowner must go through the procedure to convert the white certificate to a pink land title certificate.

Real estate terminology refers to land and structures built on it.

Vacant land: This refers to vacant land that has not been affected or built upon in any way. There are three basic types:

- Project land: This refers to land located within a project currently being planned by the developer. These plots of land are in the project research phase and have not yet been affected by machinery or human activity.

- Residential land: This refers to land belonging to the non-agricultural land group, land not used for agricultural activities, found in both rural and urban areas.

- Adjacent land: plots of land arranged close together in a specific layout and having the same area within the same urban development project area. Adjacent land refers to the conversion of adjacent garden and pond land, and agricultural land interspersed within residential areas (not public land), into residential land. This conversion only applies to garden and pond land adjacent to residential land (within the same plot) and agricultural land interspersed within residential areas.

* Planned area: This is the total land area of an entire licensed construction project.

* Total floor area : This is commonly used when referring to a multi-story apartment building. It is the area of the entire floor surface of a single level, minus the area of walls and columns on that floor.

* Building density: The building density is obtained by dividing the total area used for construction by the total planned area.

Linh Chi (compiled)

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