New regulations on future housing guarantees

The maximum guarantee amount for a future housing project is equal to the total amount the investor is allowed to receive in advance from the buyer.

The State Bank has just issued Circular 13/2017 amending and supplementing a number of articles of Circular No. 07/2015 dated June 25, 2015 of the Governor of the State Bank of Vietnam regulating bank guarantees.

According to Circular 13/2017, from November 15, 2017, commercial banks must issue a guarantee commitment for future housing to each buyer within 10 working days from the date of signing the home purchase contract.

As stipulated in this Circular, the guarantee for the sale or lease-purchase of future housing (called housing guarantee) is a bank guarantee. Accordingly, the commercial bank commits to the buyer or lessee (collectively referred to as the buyer) to perform the financial obligations on behalf of the investor when the deadline for handing over and receiving the housing as committed comes but the investor fails to hand over the housing to the buyer without refunding or not fully refunding the advance payment and other amounts according to the signed housing purchase or lease-purchase contract to the buyer; the investor must acknowledge the debt and repay the commercial bank.

Commercial banks must issue guarantees for future housing to buyers.

A commercial bank with sufficient capacity to guarantee future housing is a commercial bank that meets two conditions: 1) The commercial bank's establishment and operation license or the document amending or supplementing the establishment and operation license stipulates the content of bank guarantee activities; 2) It is not prohibited from guaranteeing future housing during the period of special control.

Circular 13 also stipulates: The State Bank shall publicly announce the list of commercial banks with sufficient capacity to guarantee future housing in each period on the State Bank's electronic information page. Commercial banks that no longer meet the regulations on guaranteeing future housing and are removed from the list must continue to implement signed agreements and commitments on guaranteeing future housing until the guarantee obligation is terminated.

In particular, the guarantee amount for a future housing project is maximum equal to the total amount the investor is allowed to receive in advance from the buyer according to the provisions of the Law on Real Estate Business and other amounts that the investor is obliged to refund to the buyer according to the signed housing purchase or lease-purchase contract when the committed delivery and receipt of the house comes but the investor does not hand over the house to the buyer.

The guarantee agreement is effective from the date of signing until all guarantee commitments to the buyer expire.

Within 10 working days from the date of signing the contract for purchase or lease of a house, including provisionsThe investor's obligation to refund the advance payment and other amounts to the buyer when the committed delivery and receipt deadline comes but the investor fails to hand over the house to the buyer, the investor must send the commercial bank the house purchase or lease-purchase contract;

Within 5 working days from the date of receiving the house purchase or hire-purchase contract, the commercial bank shall, based on the house purchase or hire-purchase contract and the guarantee agreement, issue a guarantee commitment to the buyer and send it to the buyer's address;

The validity period of the guarantee commitment is determined from the date of issuance until at least 30 days after the deadline for handing over and receiving the house as committed in the house purchase or hire-purchase contract./.

According to VOV