Government issues new conditions on real estate business

This Decree details a number of articles and clauses of the Law on Real Estate Business, including the contents on conditions for organizations and individuals doing real estate business; on types of model contracts for real estate business; on the transfer of contracts for lease-purchase of existing houses and construction works; on the transfer of contracts for sale and lease-purchase of future housing; and procedures for transferring the entire or part of a real estate project.

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In which, organizations and individuals doing real estate business must meet the following conditions: Must establish an enterprise according to the provisions of the law on enterprises or a cooperative according to the provisions of the law on cooperatives, with real estate business line (enterprise).

Must publicly disclose on the enterprise's website, at the Project Management Board's headquarters (for real estate investment and business projects), at the real estate trading floor (for cases of business through real estate trading floors) information about the enterprise (including name, head office address, contact phone number, name of legal representative), information about real estate put into business according to the provisions of Clause 2, Article 6 of the Law on Real Estate Business, information about mortgages of houses, construction works, real estate projects put into business (if any), information about the quantity and type of real estate products being traded, the quantity and type of real estate products sold, transferred, leased and purchased, and the quantity and type of remaining products continuing to be traded.

For information that has been publicly disclosed as prescribed above and then changes, it must be updated promptly after the change. Only trade in real estate that meets the conditions prescribed in Article 9 and Article 55 of the Law on Real Estate Business.

In case an investor is selected as the investor of a real estate project according to the provisions of law, that investor must have equity capital of not less than 20% of the total investment capital for projects with a land use scale of less than 20 hectares, and not less than 15% of the total investment capital for projects with a land use scale of 20 hectares or more. When conducting real estate business, the project investor must satisfy the conditions specified in (*) above.

The determination of equity is based on the results of the most recent audited financial statements or the results of the independent audit report of the operating enterprise (conducted in the year or the previous year); in the case of a newly established enterprise, equity is determined based on the actual contributed charter capital according to the provisions of law.

Conditions for transferring contracts for sale and lease-purchase of future housing

The Decree also stipulates the conditions for transferring contracts for sale and purchase, hire-purchase of future housing and transferring contracts for hire-purchase of existing houses and construction works.

The transfer of contracts for sale and hire-purchase of future housing and the transfer of contracts for hire-purchase of existing houses and construction works do not apply to contracts for sale and hire-purchase of social housing.

The transfer of a contract for the sale, purchase or lease of a house or construction work must ensure the following conditions:

There must be a sales and hire-purchase contract drawn up in accordance with regulations; in case the parties have signed a contract before the effective date of this Decree, there must be a signed contract.

Belonging to the category of not yet submitting application to competent state agencies for issuance of Certificate of land use rights, house ownership rights and other assets attached to land (Certificate).

Contracts for sale, lease-purchase of houses and construction works must be free of disputes or lawsuits.

Houses and construction works under sales and hire-purchase contracts are not subject to seizure or mortgage to secure the performance of obligations as prescribed by law, except in cases where the mortgagee agrees./.