"Living miserably, dying miserably" because of buying a project that does not meet the conditions for sale

The real estate market in the South is recovering, with new projects launching one after another. However, this is also a time when many developers are circumventing the law to sell projects that lack the necessary legal procedures, leaving customers in a difficult situation.

The real estate market in the South is recovering, with new projects launching one after another. However, this is also a time when many developers are circumventing the law to sell projects that lack the necessary legal procedures, leaving customers in a difficult situation.

The Charm Diamond project has been on sale since 2019, but construction has yet to begin.

Identifying projects that are being sold illegally.

According to the 2023 Real Estate Business Law, a real estate project eligible for sale must have all the necessary legal procedures completed, such as investment policy approval, 1/500 scale planning, land use tax obligations fulfilled, construction permit obtained, foundation completed, and then be authorized by the competent authority to sell future real estate products.

However, it is currently common for projects to be offered for sale even though they do not meet all the necessary legal requirements. In particular, most projects that only have a 1/500 scale plan are inviting customers to place deposits to reserve units without using the term "open for sale."

For example, in early September 2024, in Di An City ( Binh Duong province), the Binh Thang Apartment Project (commercial name Avenue Binh Thang) was introduced to the market by the investor, who also collected "reservation" fees from customers. According to advertisements, the project is built on an area of 3,351 m2, with 2 basement floors, 35 above-ground floors, comprising 536 apartments, priced at 33-40 million VND/m2. Upon investigation, we learned that the project has received investment approval, Decision 1/500, and a construction permit from the Binh Duong Department of Construction, but has not yet fulfilled its financial obligations and has not commenced construction.

The Binh Duong Department of Construction requires investors to commit to not selling properties or accepting payments from customers until the project meets all legal requirements. In addition, the Department has issued numerous documents advising and instructing local authorities to strictly manage projects in their areas, and to post notices in advance of real estate projects that do not yet meet the conditions for capital mobilization.

In Binh Duong New City, a project called KH is also being offered for sale by the developer. Posing as a potential home buyer, I was introduced by an employee named Chau to this project, which includes both commercial and social housing. The developer is currently accepting deposits for reservations, with official deposit contracts to be signed on October 15th and official sales to begin on November 15th. However, when I inquired about the legal aspects, Chau stated that the project is currently applying for a construction permit.

Similarly, the project named The Felix (Thuan An City), invested by C-Holding Joint Stock Company, was launched for sale in July 2024. The project is built on an area of over 9,000 m2, with 2 apartment blocks of 40 floors each, comprising 1,206 apartments, with the lowest price at 1.5 billion VND per unit. However, the Binh Duong Department of Construction stated that this project does not yet meet the conditions for raising capital in the form of future housing due to insufficient legal documentation.

Also in Thuan An City, The Emerald Golf View project is being introduced to the market by Le Phong Group. The project comprises 770 apartment units, with selling prices ranging from 45 to over 50 million VND/m2. This project is also on the list of projects that have not yet met the conditions for sale.

This situation exists not only in suburban provinces but also in Ho Chi Minh City. The Fitato project in Thu Duc City, developed by Hung Phu Invest, has 383 apartments priced at 46-60 million VND/m2. The Ho Chi Minh City Department of Construction announced that this project does not yet meet the conditions for sale and capital mobilization.

I bought the house five years ago and still haven't seen any construction.

The consequences of buying homes in projects that do not meet the conditions for sale and fundraising have caused many customers to suffer and file complaints everywhere.

Ms. Thuy Anh, a customer who purchased an apartment in the Charm Diamond subdivision of the Charm City project (Di An City, Binh Duong Province), said that in 2019, Charm Group launched the sale of apartments in the Charm Diamond subdivision, and she bought an apartment there for nearly 2 billion VND. However, as of the end of 2024, the project has still not started construction, despite her having paid a considerable amount of money.

“There are hundreds of customers like me who bought houses in this project. In 2021 and 2022, we repeatedly worked with the developer, even filed complaints and demanded our money back, but the developer dragged their feet and refused to pay,” Ms. Thuy Anh said angrily.

Also launched in 2019, the LDG Sky project (Di An City), developed by LDG Investment Joint Stock Company, has 1,670 apartment units with a selling price of 30 million VND/m2 at the time. However, after 5 years, the project has still not been built due to a lack of necessary legal permits.

According to Mr. Huynh Pham Tuan Anh, Deputy Director of the Binh Duong Department of Construction, it is common for investors, project developers, and brokerage companies to "circumvent the law" by raising capital through forms such as priority request forms, deposit forms, and registration forms.

Some projects with only rudimentary legal documentation have been raising capital before meeting the necessary conditions and obtaining approval from the authorities. These transactions carry significant risks.

According to lawyer Tran Duc Phuong (Ho Chi Minh City Bar Association), many developers lack financial capacity, so they deliberately circumvent the law to raise capital regardless of legal regulations. This is the reason why a series of projects in recent times, despite collecting up to 95% of the apartment value, have failed to deliver the houses to customers. Furthermore, many developers have even mortgaged projects already sold to customers to banks, leaving homebuyers in a situation akin to being held hostage.

"From 2020 to the present, I have received quite a few lawsuits from customers against developers because they mistakenly bought projects that lacked the necessary legal documents, but the developers sold the properties, collected money from customers, and then failed to build," Mr. Phuong said.

According to lawyer Phuong, the fact that many developers "accidentally or intentionally" violate legal regulations regarding the buying and selling of real estate without obtaining permits from the authorities is negatively impacting the market and shifting the risks to customers.

Developers often justify their actions by saying that early buyers get better prices and a better product, while the company also has the funds to develop the project. However, that's only when things are going smoothly for the company. If they encounter procedural, legal, or financial obstacles, the project will be stalled year after year. Ultimately, the buyers are the ones who suffer.

"Homebuyers should carefully consider their options and absolutely avoid purchasing projects or houses under construction when the developer lacks the necessary legal permits. They should inquire with local authorities before signing any documents or transferring money to a real estate agency or project developer to avoid risks," lawyer Phuong advised.

Source: https://baodautu.vn/batdongsan/song-do-chet-do-vi-mua-du-an-chua-du-dieu-kien-mo-ban-d228630.html