Cocobay Da Nang unilaterally terminated the contract with the customer, what did the Department of Construction say?

On March 20, responding at the first quarter 2024 press conference organized by the People's Committee of Da Nang City, Mr. Le Van Tuan, Deputy Director of the Department of Construction, said that up to now, the Department has not received any notice from Thanh Do Investment, Development and Construction Joint Stock Company - the investor of the Cocobay Da Nang project - regarding the information that the company unilaterally terminated the contract with the customer.

The Department of Construction has allowed the investor to sell future housing for this project. On that basis, the investor has signed contracts to buy and sell future housing for individual customers.

According to regulations, investors must report on implementation results every quarter. However, up to now, the Da Nang Department of Construction has not received any reports on this matter.

“The contract is of a civil nature between two parties, so any dispute over this contract is between the investor and the related customers. In case there are contents related to the State management role, the Department of Construction will participate,” said Mr. Tuan.

"Super project" Cocobay Da Nang at present.

The Deputy Director of the Department of Construction of Da Nang added that the Cocobay Da Nang project includes two sub-areas: Q1 with an area of 300,797 m2 and Q2 with an area of 212,529 m2. These two sub-areas were approved by the People's Committee of Da Nang City for detailed planning; the project has been constructed and partially put into use.

Regarding the Q1 subdivision, on February 1, 2019, the People's Committee of Da Nang City issued a decision approving the adjustment of the detailed planning, with the main content being to convert 50% of the hotel apartment buildings (not forming residential units) under construction in clusters HH2, HH3, HH5 into apartment buildings (forming residential units).

The unfinished high-rise apartment-hotel buildings in clusters HH4, HH6, HH7 will be converted into apartments, villas, semi-detached villas, and townhouses. The HH1 high-rise building will be reduced in height from 50 floors to 40 floors, and 50% will be converted into apartments.

“ In 2022, the investor proposed to adjust blocks HH2 and HH3 by converting one block into an apartment building and one block into a hotel apartment (condotel). After that, the Department of Construction instructed the investor to carry out the related procedures, but from 2022 until now, the investor has not done so ,” said Mr. Tuan.

Cocobay tourism and entertainment complex (Cocobay Da Nang) of Thanh Do Investment, Development and Construction Joint Stock Company (Empire Group) started construction in June 2016 in the coastal area of Truong Sa Street, Hoa Hai Ward, Ngu Hanh Son District, Da Nang City.

At that time, the investor said that Cocobay had a total investment capital of 11,000 billion VND, built on an area of about 31 hectares. The project was introduced as a tourism and entertainment complex with many items such as an indoor performance stage, an outdoor performance stage, a tourist square, a walking street, and a condotel and boutique hotel accommodation system.

Desolate scene at Cocobay Da Nang project.

In 2017, after partial completion, including condotels and many other entertainment and resort services, this project was put into operation.

However, just 2 years later, the investor declared "broken" in the condotel segment. Specifically, at the end of 2019, Empire Group announced to customers that it would stop paying profits as committed in the contract when buying condotels at the project from January 1, 2020.

In the announcement, the investor said that the legal framework for condotels has not yet been specifically regulated by the authorities; real estate business activities of this type still have many shortcomings. Therefore, the project encountered many problems and the investor admitted his fault for not being able to pay profits to customers as committed (12%/year, for 8 years).

Chau Thu

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