Clearly regulate deposits to protect people

NINCREASE DEPOSIT VALUE UP TO 20 – 30%

According to Article 23 of the draft Law on Real Estate Business (amended) being presented for comments at the National Assembly, the drafting agency proposes two options on the principles of housing business and construction works formed in future. Option 2, real estate project (real estate) investors are only allowed to collect deposits from customers when the housing or construction project has met all conditions for being put into business and has carried out transactions in accordance with the law. provisions of this law. Option 1, real estate project investors can only collect deposits as agreed with customers when the project has a basic design appraised by a state agency and the investor has one of the documents on use rights. land use. The maximum deposit amount does not exceed 2% of the selling or rental price.

Lawyer Nguyen Dang Tu, Trilaw Law Company Limited, analyzed for option 1, the nature of the deposit according to the Civil Code is to ensure the performance of civil obligations. Accordingly, one party (the depositing party) delivers to the other party (the deposit receiving party) a sum of money or property within a certain period of time to confirm the unanimity of will between the parties and to ensure the conclusion or performance of the contract. civil community. For real estate sales transactions, the deposit is to ensure the execution of the real estate purchase and sale contract. If the regulations are as in option 1 above, it is no longer necessary, because when the project is qualified to be put into business, the parties can immediately sign a real estate purchase and sale contract without having to deposit a deposit. Therefore, this option 1 aims to limit risks for customers, increase investor responsibility, and purify investors with insufficient financial capacity, but applying to deposits is not necessary. . The condition that the project is eligible to be put into business should only be applied to signing a sales contract.

Option 2 is more "open" for investors to make deposit transactions. However, to protect customer interests, the draft should add content limiting deposits to an appropriate level (about 20 - 30%). Because currently the Civil Code does not regulate the minimum or maximum deposit required for real estate purchases. This has led to the recent chaos in real estate purchases in the market. There are investors who through deposits require customers to deposit up to 95% of the real estate value to raise disguised capital. However, when a dispute occurs, the investor is unable to pay the deposit to the customer and is slow to refund the customer. Many customers are also having a hard time getting their principal back, let alone asking the investor to pay the deposit. Typically, there are many cases of mobilizing to buy and sell land projects, the legal documents have not been completed but they receive a deposit of up to 95% of the value, but do not sign the contract on time and are no longer able to repay, people denounce. The investor was prosecuted and the people lost money. There are also many cases where investors accept a 10% deposit, however when land and house prices increase, many investors are willing to pay the deposit without continuing to sign a sales contract. There are also cases of low deposits, when real estate freezes and prices decrease, customers are also willing to give up deposits. “The draft should further stipulate that in order to sign a deposit, the investor must provide a letter of guarantee from the bank committing to refund the deposit to the customer when the investor violates the agreement. This proposal will create more favorable conditions for investors to mobilize capital and also ensure customers' rights when investors violate their commitments," lawyer Tu proposed.

Deposits will only be accepted when the project meets business conditions

According to Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association, with option 1, the purpose of making a deposit is to ensure the performance of the contract, but in reality, after signing the contract, it rarely happens that the party The deposit was defrauded by the deposit recipient. The reason is that the conclusion of contracts is often closely inspected by the parties and implemented according to the provisions of law. When executing the contract, the deposit is often deducted from the first payment amount of the transaction. Option 2 is to deposit a deposit to ensure contract conclusion. In fact, before entering into a contract, it often happens that the depositor is deceived by the depositee and does not enter into the contract, causing damage to the depositor. Currently, both options 1 and 2 are correct, so it is necessary to integrate both options into a regulation on deposits to ensure contract conclusion or deposits to ensure contract performance, to protect rights and interests. Legitimate interests of customers buying, renting and purchasing existing or future real estate or housing.

Accordingly, Mr. Chau proposed to combine the two options into one in the direction: "The project investor is allowed to collect deposits from customers when the house or construction project is qualified for business and has delivered. translated in accordance with regulations for the purpose of ensuring contract performance, or real estate project investors are only allowed to collect deposits to ensure the conclusion of contracts as agreed with customers when the project has a basic design that is approved by the customer. State appraisal agency and investor have one of the documents on land use rights specified in Clause 2, Article 24 of this law. The deposit agreement must clearly state the selling price, lease-purchase price of the house or construction project. Maximum deposit amount according to Government regulations but not exceeding 10% of real estate value.

“The 2006 and 2014 Real Estate Business Laws do not regulate deposits that occur before the real estate project is eligible to enter into contracts and mobilize capital to sell houses to be formed in the future, especially land. Therefore, there has been a situation where dishonest brokers, land brokers, and businesses (DN) take advantage of Clause 1, Article 328 of the 2015 Civil Code, which does not stipulate the value and ratio of deposits, so they accept deposits. of customers with a large value, in some cases up to 90 - 95% of the value of the transaction assets. Even the middlemen, land brokers, and dishonest businesses also set up "ghost" projects with no legal basis for the purpose of defrauding, causing huge damage to customers, causing social disorder, typically like the fraud case that happened at Alibaba Company," Mr. Le Hoang Chau said.

Dr. Nguyen Van Dinh, Vice President of the Vietnam Real Estate Association, said that the draft revised Law on Real Estate Business needs to have clearer regulations on deposits, especially when to deposit, to avoid investors taking advantage of loopholes. This raises money illegally. “We have researched deposits on the real estate market in many countries around the world. All countries allow deposits. But the deposit is transferred to a joint account for a third party such as a management and supervision bank. If the investor does not comply with the commitment such as not building or not being able to sign a contract according to the law, then the customer can completely get their money back," Mr. Dinh said.