Fines of up to 20 million VND will be imposed if construction causes cracks in neighboring houses.

This rate applies to construction projects that require the preparation of an economic-technical report or an investment project plan.

The Ministry of Construction has just issued Circular 02/2014, which provides detailed regulations and guidance on the implementation of several articles of Government Decree No. 121/2013/ND-CP dated October 10, 2013, stipulating administrative penalties for violations in construction activities; real estate business; exploitation, production, and trading of construction materials; management of technical infrastructure works; and management of housing and office development.

Accordingly, penalties for organizing construction work that violates construction regulations and causes subsidence, cracking, or damage to neighboring structures or technical infrastructure will be fined from 15 to 20 million VND if the construction project requires the preparation of an economic-technical report or an investment project plan.

The same violation will result in a fine of 3 to 5 million VND when constructing individual houses in urban areas; or a warning or a fine of 500,000 to 1 million VND when constructing individual houses in rural areas.

In addition to the above fines, a construction work suspension penalty will be applied to compensate for damages. Regarding the procedure for compensation, after the administrative violation report is drawn up, if the violator and the injured party cannot reach an agreement on their own and one party submits a request, the Chairman of the People's Committee of the commune will preside over the negotiation of the compensation amount between the violator and the injured party.

In the event that the two parties fail to reach an agreement, they shall agree to invite an independent organization with legal personality to determine the extent of the damage as a basis for compensation. If, within 7 days, the two parties cannot agree on an organization to conduct the assessment, the Chairman of the People's Committee of the commune shall decide to invite an organization to conduct the assessment, with the costs borne by the infringing party;

Within 7 days, if one party disagrees with the results provided by the appraisal organization, that party has the right to invite another organization and bear the costs themselves. This appraisal result will be the basis for determining the compensation amount. If the other party disagrees with the second result, the Chairman of the People's Committee of the commune will decide the compensation amount based on the average of the first and second appraisal results.

If the appraisal organization fails to provide the appraisal results within 30 days, the Chairman of the People's Committee of the commune shall decide to use the initial appraisal results as the basis for determining compensation for damages. The party causing the damage is responsible for opening a bank account and transferring the full amount of compensation as determined by the appraisal results into that account. After the party causing the damage has transferred the full amount to the bank account, the Chairman of the People's Committee of the commune shall decide to allow the construction of the project to continue.

If the aggrieved party disagrees with the compensation amount, they have the right to file a lawsuit in court.

According to the regulations in Circular 02, in cases where a construction project is at risk of collapse or causing the collapse of neighboring structures, the investor is responsible for providing financial assistance for relocation and temporary accommodation to the affected party during the resolution period.

According to Vov