Apartment prices are increasing dramatically, should you buy an apartment without a pink book?

Can an apartment be traded if it doesn't have a land ownership certificate?

According to real estate market reports for the third quarter from several market research firms, most agree that the average selling price of new apartments in Hanoi has reached 64-69 million VND/m2. The price of older apartments has reached 46-51 million VND/m2.

Notably, new apartments priced above 4 billion VND accounted for 70% of the total number of apartments sold. The segment of apartments priced under 2 billion VND has almost disappeared from the market.

Rising apartment prices have led many people to switch to buying apartments without land use rights certificates or house ownership certificates (commonly known as "pink certificates") because the selling price is usually lower than apartments with certificates. The question is whether buying and selling in this case is legal?

Point a, Clause 1, Article 160 of the 2023 Housing Law stipulates that the conditions for transactions involving the purchase, lease-purchase, donation, exchange, mortgage, or capital contribution using housing require that the housing must meet certain conditions, including having a Certificate of Ownership as prescribed by law, except for cases specified in Clause 2 of this Article.

The cases stipulated in Clause 2, Article 160 of the 2023 Housing Law, as guided by Decree 95/2024, include:

- Buying, selling, leasing, and mortgaging houses under construction; selling houses in cases of dissolution or bankruptcy;

- Organizing the donation of houses of gratitude, houses of compassion, and houses of solidarity;

- Buying, selling, or leasing existing housing from the investor of a housing construction project in the following cases: Housing that is public property; Social housing, housing for the people's armed forces, and housing for resettlement that is not public property;

- Renting, lending, allowing someone to stay in a house, or authorizing someone to manage a house;

- Inheriting a house.

Therefore, for apartments that do not yet have ownership certificates, the parties involved can still buy and sell them.

An apartment project in Hanoi (Photo: Tran Khang).

Legal issues to consider

Article 8 of Decree 95/2024 clearly stipulates the documents required to prove the eligibility of housing for transactions when a certificate of ownership has not yet been issued.

For transactions involving the purchase or lease-purchase of housing within housing construction investment projects, documents proving that the housing meets the conditions for commercial sale are required, especially in the case of resettlement housing and housing for the people's armed forces.

These types of housing must have documents proving they meet the requirements for commercial use or acceptance certificates for use, and documents proving they meet the requirements for transactions as stipulated by the law on the development and management of social housing.

For transactions involving the purchase or lease-purchase of housing units under construction that are not part of a project, a certificate of land use rights and a construction permit (if required) are required, or documents proving investment in housing construction must be provided.

For transactions involving the purchase, sale, or lease of public housing, documentation confirming that the housing is eligible for lease or sale as stipulated in Articles 63 and 69 of Decree 95/2024 is required.

For transactions involving the donation of houses for needy families, houses for the poor, or houses for national solidarity, the donating organization must provide documentation proving the construction of the house being donated.

If the inherited house is eligible for purchase or lease-purchase, there must be a legally valid purchase or lease-purchase contract, along with documents proving ownership of the house or proof of investment in the construction of the house by the seller or lessor.

For transactions involving the sale of housing by a dissolved or bankrupt organization, there must be a resolution or decision on the dissolution of that organization, or a notification from the competent authority regarding the dissolution of the organization owning the housing. In the case of bankruptcy, there must be a decision from the People's Court declaring the bankruptcy of the organization owning the housing.

However, when buying an apartment without a land ownership certificate, buyers may face many risks. The biggest risk is that the State will not recognize the buyer's legal ownership of the apartment and the land use rights associated with that apartment project.

Another risk is that if the agreement is in the form of a notarized power of attorney for management and use, it means that from the second owner onwards, they are only authorized to use the apartment. In that case, if a land title deed is issued, the original owner will be the one named on the document. The original owner may refuse to cooperate in transferring ownership to the new owner in order to demand a higher price.

Therefore, disputes arising from this property will not be protected by law. While the property does not yet have a title deed, the buyer cannot obtain a bank loan by mortgaging the apartment.

Source: https://dantri.com.vn/bat-dong-san/chung-cu-tang-gia-soc-co-nen-mua-can-ho-chua-co-so-hong-20241017133815720.htm