8 terms to note when signing an apartment purchase contract

Below are important items in the contract that you should not ignore to protect your rights.

1. House delivery time, investor's responsibility

This is one of the most important items in the apartment purchase contract that customers must pay attention to. This helps them control whether the investor delivers the house on time or not, thereby having a basis to assign responsibility to the investor if the handover progress is not carried out as stated in the contract.

Information about the investor's responsibility if the house is not delivered on time is also very important and needs to be transparent. Because in case you are not delivered the house, someone must take responsibility and compensate properly.

2. Terms of payment, penalties

In this clause, customers should pay attention to the payment time and payment method as well as the penalty fee if payment is late in the contract. Avoid late payment or incorrect payment method leading to unnecessary fees.

3. Contract value

You need to consider whether the contract value includes land use fees, taxes, and other fees. You need to be clear about the costs from the beginning to avoid future disputes.

There are cases where the buyer does not pay attention to this item from the time of signing the contract, so when receiving the handover, the investor requires the buyer to sign additional documents and pay other fees such as a deposit to complete the apartment, the fee for issuing the certificate, the pink book or the investor arbitrarily increases the service management price, arbitrarily adds other fees without agreement with the residents.

4. VAT

You need to check this item carefully to avoid the case of investors cheating on VAT. Many sales contracts in real estate projects calculate VAT at 10% on the contract value. But this calculation is not in accordance with regulations, cheating customers on VAT.

Circular No. 06/2012/TT-BTC clearly states: “For real estate business activities, the taxable price is the real estate transfer price minus (-) the land price deducted for calculating VAT”. This is a sophisticated money-appropriation trick of the investor that customers need to be careful of.

5. Area, common and private ownership

You must pay special attention to this item because this is one of the common risks when receiving the apartment handover. In many cases, the investor does not re-measure the area but uses another measurement from the hired people to give to the customer.

Regarding common and separate ownership, the apartment sale and purchase contract must specify the separate ownership of the buyer, the investor and the common ownership. In principle, areas that are not privately owned will be common ownership.

6. Apartment handover conditions

The investor is only allowed to hand over the house to the customer when the construction of the house and technical infrastructure and social infrastructure works have been completed according to the schedule stated in the approved project, ensuring connection with the common infrastructure system of the area; in case of handing over a raw house, the entire exterior of the house must be completed.

7. Investment period, land delivery and lease period for construction of commercial housing projects

Many investors often conceal information about: investment period, land allocation and lease period for construction of commercial housing projects (long-term, limited-term), other related legal regulations such as: approval by competent authorities on site, design, construction and supervision...

Homebuyers themselves often ignore these regulations when reviewing sales contracts. This leads to a situation where many commercial apartment projects have seemingly cheap selling prices, but in reality, they are not cheap at all because the investors rent land from the state to build commercial housing for a limited period (20, 30, 50 years). When the lease expires, the state has the right to reclaim the land, at which point the investors have fulfilled their obligations and responsibilities, leaving the homebuyers with the following legal issues.

To protect their rights, home buyers need to ask the investor to clearly provide this information before deciding to buy an apartment.

8. Force Majeure

It is important to note whether the force majeure clause in the contract is legal or not. Many investors take advantage of this clause to avoid responsibility when handing over the house late.

Their method is to include the situation where the investor fails to deliver the house on schedule and the house is repossessed by the government in this force majeure condition and push the home buyer into a legal vicious circle. Meanwhile, the one who has to take responsibility is the investor. To protect their rights, home buyers need to clearly understand the regulations and terms in the contract, not letting the investor "mislead and cheat".

In addition to the above terms in the contract, you also need to consider whether the party signing the contract is legal or not because if you are not careful, the contract will be invalid and affect your rights later, especially when a dispute occurs.