Law on Real Estate Business No. 29/2023/QH15 (hereinafter referred to as the Law on Real Estate Business 2023) was passed by the 15th National Assembly on November 28, 2023, replacing Law on Real Estate Business No. 66/2014/QH13 which was amended and supplemented by a number of articles under Law No. 61/2020/QH14. The Law consists of 10 chapters and 83 articles, effective from January 1, 2025, regulating real estate business, rights and obligations of organizations and individuals in real estate business and state management of real estate business with the following new and key contents:
1. Clarifying the scope of regulation of the Law on Real Estate Business
The 2023 Law on Real Estate Business amends and supplements current regulations to ensure that there is no overlap with the Civil Code, Land Law, Housing Law, Law on Civil Judgment Enforcement, Enterprise Law, Investment Law, etc. Supplementing regulations on cases where the Law on Real Estate Business does not apply, such as: Selling houses, construction works, transferring land use rights due to bankruptcy, dissolution, division, separation; transferring ownership of houses, construction works, land use rights due to division, separation, consolidation, merger; selling, transferring, leasing real estate that is public property; selling houses, construction works, transferring land use rights according to court judgments, decisions or judgments, decisions of commercial arbitration, decisions of competent state agencies when resolving disputes; renting social housing to workers and laborers where the Vietnam General Confederation of Labor is the project management agency in accordance with the provisions of the law on housing, etc.
The Law also clearly defines the scope of application for small-scale real estate business cases; sale of houses, construction works, and construction floor areas in construction works not for business purposes; sale, lease, and hire-purchase of houses, construction works, and construction floor areas in construction works under small scale.
The National Assembly delegation of Long An province held a conference to contribute opinions on the draft Law on Land (amended), Law on Housing (amended) and Law on Real Estate Business (amended) submitted to the 6th session of the 15th National Assembly.
2. Supplement and complete regulations on conditions for organizations and individuals when doing real estate business.
Specifically, the 2023 Law on Real Estate Business has added a number of stricter conditions to screen real estate businesses with sufficient financial capacity to participate in the market, such as: The ratio of outstanding credit, outstanding corporate bonds to equity capital, and allocation of equity capital to ensure a minimum ratio to the total project investment capital in the case of a real estate business enterprise simultaneously implementing multiple projects.
At the same time, the Law regulates policies for Vietnamese people residing abroad and economic organizations with foreign investment capital to ensure consistency with the Investment Law 2020 and the Land Law 2024. In particular, the Law on Real Estate Business 2023 stipulates that Vietnamese people residing abroad are Vietnamese citizens with full rights to conduct real estate business, purchase, lease, and hire-purchase real estate like domestic individuals; economic organizations with foreign investment capital that must meet the conditions and carry out investment procedures prescribed for domestic investors have full rights to conduct real estate business, purchase, lease, and hire-purchase real estate like domestic organizations.
3. Public information about real estate and real estate projects
The Law on Real Estate Business 2023 has supplemented and completed regulations on the disclosure of information on real estate and real estate projects put into business to institutionalize Resolution No. 18-NQ/TW of the Party Central Committee; accordingly, information disclosure is a mandatory condition when doing real estate business, contributing to improving market transparency, protecting the rights of buyers, renters, and rent-purchasers of real estate. At the same time, complete regulations on the construction, management, operation and exploitation of the housing and real estate market information system, ensuring connection and sharing with the national database on land and other relevant databases, creating a foundation for the development of e-Government.
The National Assembly voted to pass the Law on Real Estate Business 2023 at the 6th Session.
4. Amending and supplementing regulations on principles, conditions, and implementation of housing business, construction works, and construction floor area in existing and future construction works.
The 2023 Law on Real Estate Business has supplemented and perfected the regulations on principles, conditions, and implementation of housing business, construction works, and construction floor area in existing and future construction works in a more stringent manner, contributing to the development of a sustainable real estate market. Supplementing regulations on deposits in the purchase and hire-purchase of housing, construction works, and construction floor area in future construction works to prevent illegal capital mobilization, minimize the risk of fraud, property appropriation, and capital appropriation of customers, and screen real estate businesses in the market. Supplementing regulations on guarantees in the sale and hire-purchase of future housing, allowing customers to choose to guarantee the financial obligations of the investor to them in case of failure to hand over the house as committed.
5. Regulations on investors trading land use rights with technical infrastructure in real estate projects
The 2023 Law has completed the regulations on conditions and requirements for trading in land use rights with technical infrastructure in real estate projects in a stricter direction. It is not allowed to transfer land use rights with technical infrastructure in real estate projects to individuals who build houses by dividing and selling plots in wards, districts, and cities of special-class, class I, class II, and class III urban areas.
6. Supplement and complete regulations on real estate project transfer
Accordingly, the Law allows investors to transfer real estate projects if there is a decision on land allocation, land lease, permission to change land use purpose and has fulfilled financial obligations on land, then it is not required to have a certificate of land use rights. Supplementing regulations on cases where the Prime Minister authorizes the People's Committee of the province to decide to allow the transfer of part of a real estate project for which the Prime Minister decides on the investment policy, approves the investment policy, and approves the investment.
7. Perfecting regulations on real estate service business
The 2023 Law on Real Estate Business encourages organizations and individuals to conduct transactions of buying, selling, transferring, leasing, leasing-purchasing, subleasing houses, construction works and land use rights through real estate trading floors. It is mandatory for individuals practicing real estate brokerage to practice in a real estate trading floor service business or a real estate brokerage service business.
8. Clearly define types of contracts in real estate business
Specifically, the Law has assigned the Government to prescribe model contracts for real estate business contracts to control the main and necessary contents, ensuring the rights of the parties involved in real estate transactions. It requires project investors, real estate businesses, and real estate service businesses to receive payments under real estate business contracts and real estate service business contracts from customers through accounts opened at domestic credit institutions or foreign bank branches legally operating in Vietnam to control cash flow in real estate transactions, and prevent illegal acts such as tax evasion and money laundering.
9. Supplementing regulations on real estate market regulation
According to regulations, real estate market regulation is carried out through planning, land use plans, construction plans, urban and housing development programs and plans, real estate project adjustments, tax and credit policies and other policies; ensuring supply and demand and appropriate real estate product structure for each stage of the market, ensuring the real estate market develops healthily, safely and sustainably. The Ministry of Construction is assigned to preside over and coordinate with ministries, ministerial-level agencies, and provincial People's Committees to study and propose measures to regulate the real estate market.
Along with the provisions of the Land Law and Housing Law passed by the National Assembly, the 2023 Law on Real Estate Business will contribute to creating a legal corridor to clear bottlenecks, promoting the healthy and sustainable development of the real estate market in the coming time.
In addition to the new points mentioned above, the 2023 Law on Real Estate Business stipulates 13 cases that will be transferred after the law comes into effect, specifically:
(1) Real estate business enterprises and real estate service business enterprises operating before the effective date of this Law that do not yet satisfy the conditions prescribed by this Law must supplement all conditions within 06 months from the effective date of this Law.
(2) A real estate project that has met the requirements for a real estate investment project for business purposes as prescribed in Law No. 66/2014/QH13 before the effective date of this Law shall not have to meet the requirements for a real estate project as prescribed in Article 11 of this Law; in case a real estate project carries out adjustment procedures after the effective date of this Law, it must meet the requirements for a real estate project as prescribed in this Law.
(3) The dossier for transferring the entire or part of a valid real estate project has been received in accordance with the provisions of Law No. 66/2014/QH13 but the results have not been returned by the effective date of this Law, shall continue to be implemented in accordance with the provisions of Law No. 66/2014/QH13; in case the procedure for transferring the entire or part of a real estate project is re-implemented after the effective date of this Law, the transfer shall be implemented in accordance with the provisions of this Law.
(4) Foreign-invested enterprises under the provisions of Law No. 66/2014/QH13 are carrying out procedures to receive the transfer of all or part of a real estate project, but by the effective date of this Law have not completed the land procedures for the project or the part of the project to be transferred, the implementation of land procedures shall be carried out in accordance with the provisions of Clause 3, Article 42 of this Law.
(5) Housing and construction works formed in the future that are eligible to be put into business according to the provisions of Law No. 66/2014/QH13 but have not yet signed a sale or hire-purchase contract by the time this Law comes into effect shall continue to carry out the sale or hire-purchase procedures according to the provisions of Law No. 66/2014/QH13 but must publicly disclose information about the real estate and real estate projects put into business according to the provisions of Article 6 of this Law before signing the sale or hire-purchase contract.
(6) The real estate project investor that has been approved by the guarantee bank to issue a guarantee for the investor's financial obligations to the buyer or hire-purchaser of future housing does not have to re-do the guarantee issuance procedures according to the provisions of this Law.
(7) Contracts for sale and purchase or hire-purchase of future housing that have been guaranteed by a bank issuing a certificate guaranteeing the investor's financial obligations to customers before the effective date of this Law are not required to carry out the guarantee according to the provisions of this Law.
(8) Contracts for sale and purchase or hire-purchase of future housing established under Law No. 66/2014/QH13 and detailed regulations and implementation guidelines before the effective date of this Law but the housing has not been handed over shall not be subject to the provisions of Clause 3, Article 26 of this Law.
(9) Real estate business contracts established under Law No. 66/2014/QH13 before the effective date of this Law shall continue to be implemented in accordance with Law No. 66/2014/QH13 and detailed regulations and guidelines for implementation; in case of contract amendments or supplements after the effective date of this Law, the parties must adjust or supplement relevant contents of the contract in accordance with the provisions of this Law.
(10) Real estate trading floors operating before the effective date of this Law that do not yet satisfy the conditions prescribed in this Law must supplement the conditions prescribed in Article 55 of this Law within 06 months from the effective date of this Law.
(11) Training and fostering facilities for real estate brokerage practice and real estate trading floor operations that were operating before the effective date of this Law but did not meet the conditions prescribed by this Law must supplement all conditions within 06 months from the effective date of this Law.
(12) Real estate brokerage practice certificates issued before the effective date of this Law shall continue to be valid for the term stated on the Certificate.
(13) Credit institutions, foreign bank branches, asset management companies of credit institutions, asset management companies of Vietnamese credit institutions established and operating under the provisions of the law on credit institutions that have submitted dossiers to transfer all or part of real estate projects as collateral and received by competent authorities before the effective date of this Law shall continue to comply with the provisions of Law No. 66/2014/QH13 and detailed regulations and implementation instructions.
Hopefully, the new points mentioned above, together with the provisions of the Land Law and the Housing Law passed by the National Assembly, which will take effect from January 1, 2025, and the 2023 Law on Real Estate Business will contribute to creating a legal corridor to clear bottlenecks, promoting the healthy and sustainable development of the country's real estate market in the coming time./.
Kien Quoc
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