No mini apartment law

Legal error

Mini apartments flourished in Hanoi in 2010 and construction exploded in 2013-2015 when the real estate market was booming, supply was in short supply, and demand for buying and renting increased sharply.

Although not recognized by law in the 2005 Housing Law and Decree 90/2006/ND-CP, due to the many fluctuations in the market, Decree 71/2014/ND-CP (Decree specifying the 2014 Housing Law) has some more "open" points when adding the type of housing built by people. In which, the regulation "For the type of housing built by individuals/households with 2 floors or more, in which each floor will have 2 rooms designed and built on a closed scale, the minimum floor area must reach 30m2...".

With Decree 71 of the Government and Circular 16 of the Ministry of Construction , the granting of certificates (pink books) for mini apartments is eligible. This is under the authority of districts. Regarding procedures, Hanoi City has specific regulations in Decision 117/2009 of the City People's Committee. Mini apartments that are licensed but built without permission, such as exceeding the number of floors or the apartment area is smaller than the minimum regulation of 30m2, cannot be granted a certificate of ownership. If an apartment building is licensed for 6 floors but is built up to 7-8 floors, all apartments in that area, including those built properly with 6 floors or less, will not be granted a certificate of ownership.

This is a loophole for mini apartments to massively circumvent the law in the period 2010-2020, especially in districts with crowded schools, offices, and hospitals such as Cau Giay, Thanh Xuan, Hoang Mai, Bac Tu Liem... Buyers have reason to believe that mini apartments are granted certificates. However, due to illegal construction, very few apartments are granted certificates.

Mr. Nguyen Van Dinh, Vice President of the Vietnam Real Estate Association, said that mini apartments are "defective products" of a development stage. The association has issued many documents requesting management agencies to tighten the construction of mini apartments. Because the rampant construction puts pressure on traffic infrastructure and social infrastructure. At the same time, there is a lack of safety standards for fire prevention and fighting. In particular, mini apartments are mostly built without permits and not according to standards, so many apartments are not granted pink books. This greatly affects the rights of home buyers.

“The law has regulations on granting pink books for mini apartments, but they are still unclear. However, in reality, most private apartments have errors in legal documents such as applying for a construction permit for a single house, but when building, they “magically” turn into mini apartments, add floors, add rooms, change the design, and do not ensure fire prevention and fighting... Therefore, granting pink books is very difficult to implement,” Mr. Dinh emphasized.

Inadequacies of legal regulations on the development of individual and household housing. The situation of illegal construction, which transforms individual housing into mini-apartments, originates from inadequacies and limitations in the management and enforcement of the law by State management agencies, especially at the grassroots level, when there is not close inspection and supervision. Many opinions say that localities need to strengthen inspection, detection and strict handling of violations of the law on construction order, especially for the construction of individual housing with many floors and many apartments but built without permission, built without permission, built not in accordance with the planning approved by competent authorities, etc.

Mini apartment management

Faced with the shortcomings of the mini apartment model, according to the reporter's research, in some localities such as Ho Chi Minh City, licensing for mini apartments is not implemented. Because, according to regulations, any type of housing development must be implemented according to the project; commercial housing projects must be approved by competent authorities in terms of investment policy and recognized by investors; investors must be organizations or enterprises with legal capital to ensure project implementation, and have real estate business functions...

Lawyer Nguyen Hong Truong (Hanoi Bar Association) said that according to the provisions of Decree 71, individuals doing business in this housing model must establish a business. However, illegal brokers and individuals take advantage of this to turn individual housing projects into mini apartments for illegal sale and business.

In the draft Law on Housing (amended), there is a proposal that there is no need to establish a business or prepare an investment project to implement this housing model. This is another drawback. This means that investors will not have to carry out procedures related to investment policy approval, land allocation/lease, land valuation and financial obligations on land, appraisal of feasibility study reports/basic designs, fire prevention and fighting appraisal, construction permit issuance, fire prevention and fighting acceptance, acceptance of works eligible for exploitation and operation, etc.

In addition, the draft also provides a new regulation that allows homeowners to choose to issue a separate “pink book” for each apartment, which will lead to the mini-apartment type being “legalized” and no different from a normal apartment. This needs to be strictly controlled, especially not recognizing the purchase and sale of mini-apartments. Resolutely not issue a separate “pink book” for each mini-apartment to avoid the outbreak of this type, avoiding the risk of insecurity and overloading the urban infrastructure system.

If any household or individual has the right to use residential land and wants to build an apartment building, they must establish a business/cooperative and prepare an investment project to carry out investment procedures according to the Investment Law, Housing Law, and Real Estate Business Law.

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