Amendments to three real estate-related laws as bottlenecks are about to be removed.

However, thanks to the strong involvement of the Government and relevant ministries and agencies, these obstacles are being addressed at an accelerated pace to find solutions.

Currently, three laws directly impact the operation of the real estate market: the 2013 Land Law, the 2014 Housing Law, and the 2014 Real Estate Business Law. However, these three laws are in conflict and overlap with each other.

Speaking with reporters, Associate Professor Dr. Nguyen Quang Tuyen - Vice Chairman of the University Council of Hanoi Law University - said that all three laws are currently under research and amendment to create a legal breakthrough that will boost the real estate market.

According to Mr. Tuyen, the latest announcements have shown that all three laws are undergoing significant changes.

Highlights of the amendments to the 2013 Land Law

Of these three laws, the 2013 Land Law is the "centerpiece" of the issue. It is the fundamental law, serving as the foundation for other laws related to the real estate market. Therefore, amending the 2013 Land Law would unlock a long-standing bottleneck in the market.

According to the analysis of Associate Professor Dr. Nguyen Quang Tuyen, the draft amended Land Law has made many important additions, for example, it has added provisions on land use planning and plans.

The draft amendment to the Land Law provides more specific regulations on the authority, purpose, and scope of land acquisition, as well as the specific conditions and criteria for land acquisition for socio-economic development in the national and public interest.

In addition, the draft regulations specify the effective exploitation of adjacent land to maximize land resources for socio-economic development, as well as mechanisms for contributing land use rights, readjusting land use, and urban and rural residential area renovation.

“The draft removes the regulation on land price frameworks; it stipulates a mechanism for determining land prices based on market principles, and mechanisms for inspection and supervision by the Central Government and provincial People's Councils in the construction of land price tables… We are proposing that land price tables must harmonize interests,” Mr. Tuyen said.

The draft continues to refine legal regulations related to the real estate market, including the land use rights market. It promotes the commercialization of land use rights; establishes requirements for building a real estate market information system linked to land information; and improves state regulatory mechanisms to ensure the healthy, safe, and sustainable development of the real estate market…

Amendments to 3 laws related to real estate as the final button is about to be broken (Figure 1)

In particular, regarding financial management of land and land prices, in line with the spirit of Resolution No. 18, the Draft Law on Land (amended) has removed the government's land price framework. Furthermore, Article 153 specifically stipulates the principles for land valuation: Valuation based on land use purpose; valuation based on land use duration and other factors affecting land prices…

The draft adds regulations on regulating revenue from land of provinces and centrally-administered cities to the central budget to support development; it stipulates that provincial People's Committees, based on the actual situation of the locality, shall determine the level of regulation to support the community where land is expropriated and to the people whose land is expropriated (Article 148)...

In addition, the draft adds a provision allowing users of agricultural land to change the structure of crops and livestock (Article 172). It also includes regulations on land consolidation and accumulation for agricultural production, specifying the principles, conditions, and forms of land consolidation and accumulation for agricultural production…

How has the 2014 Housing Law been amended?

Meanwhile, Associate Professor Dr. Nguyen Quang Tuyen also believes that the amendments and additions made by the Ministry of Construction in the Draft Law on Housing 2014 (amended) also have many positive aspects.

For example, the 2014 Draft Law on Housing (amended) added regulations on the conditions for recognizing ownership rights to housing; recognition of housing ownership rights; rights and obligations of housing owners and users; types of housing owned by the state; agencies representing state-owned housing owners; and rights and obligations of housing owners who are foreign organizations or individuals.

The Ministry of Construction has also added regulations on apartment ownership, including the basis for establishing and terminating ownership rights when the apartment building is subject to demolition due to not meeting safety standards; and the rights and responsibilities of owners after the termination of ownership rights.

The regulations in a chapter on the renovation and reconstruction of apartment buildings have also been outlined very specifically, for example, the principles for implementing and renovating apartment buildings; inspection and evaluation of apartment building quality; forms of renovation and reconstruction of apartment buildings; selection of investors for apartment building renovation and reconstruction projects; arrangement of resettlement housing and temporary housing…

Regarding social housing policy, the Ministry of Construction has added regulations on the forms of social housing development; requirements for social housing construction projects; determining the selling price of social housing invested by the State; and the timing of price appraisal for selling, renting, and lease-to-own social housing.

Regarding financing for housing development, the Ministry of Construction has added regulations on sources of capital for housing development; principles for mobilizing and using capital for housing development; preferential loans through the Social Policy Bank for social housing development; state capital sources for housing development; and forms of capital mobilization for housing development…

Amend the Law on Real Estate Business to prevent land speculation.

Finally, Associate Professor Dr. Nguyen Quang Tuyen also gave positive assessments of the amendments and additions to the Draft Law on Real Estate Business of 2014.

First, clarify which resort real estate products are being offered for sale.

Firstly, regarding the scope and types of real estate included in business activities, the Draft Law on Real Estate Business (amended) has been supplemented and clarified in Article 5.

"Thus, the types of real estate included in the business have been clearly specified, avoiding the previous situation where only general statements were made, leading to many 'loopholes' that real estate brokers could exploit to commit illegal acts," Mr. Tuyen said.

Specifically, the plan includes adding resort real estate products such as tourist apartments, tourist villas, and office buildings combined with accommodation.

Secondly, Article 13 concerning housing and existing construction works put into business also adds: Existing construction works put into business are civil works in accordance with the law on construction, tourist apartments, tourist villas, and offices combined with accommodation.

Secondly, strict management of real estate brokerage activities is necessary: Firstly, addressing the shortcomings of the real estate market in recent times, such as the "fever" of inflated prices that negatively impact social life, with the "culprit" being the current brokerage force, which has an excess of manpower but lacks quality.

Secondly, regarding the types of real estate that must be traded through the exchange as stipulated in Article 60 of the Draft.

Thirdly, specifically for real estate brokers, the draft amendment to the Law also introduces another condition: "Individuals have the right to conduct independent real estate brokerage services but must have a real estate brokerage license and register for tax payment in accordance with the provisions of tax law."

"With this adjustment, real estate brokerage businesses are no longer required to establish a company, and therefore are not subject to the pressure of 'having at least two people with real estate brokerage licenses' ," Mr. Tuyen explained.

Thirdly, regarding the construction and management of real estate information: The draft Law on Real Estate Business (amended) also clearly states that real estate businesses are responsible for publicly disclosing information about real estate on their websites;…

"It will take about 3-5 years for a clean real estate information system to be in place before real estate prices can be accurately determined according to market value," Mr. Tuyen emphasized.

Dinh Tran

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