LEGAL GUIDE TO BUYING OFF-PLAN PROPERTY, LESSON FROM THE ALIBABA REAL ESTATE CASE!
In the past few months, public opinion has emerged about some cases involving “Fake” projects of real estate companies such as Alibaba and Angel Lina, causing huge damage to investors. From legal perspective, DTD wants to offer legal views for you to make the right decisions in buying off-plan property.
Preliminary summary of the case :
Recently , many press and media agencies have constantly reported on the fact that Alibaba is not licensed to any projects in Dong Nai but this company still holds big events on forestry land and takes people to visit.
Dong Nai Department of Natural Resources and Environment said that 29 "Fake" projects that Alibaba Real Estate Joint Stock Company (Ho Chi Minh City) created itself to cheat customers, the objects of these projects mostly are agricultural and forestry land. The company's operation actually bases on illegal "land plot division, sale of land plots", on agricultural land, without planning and approved projects.
This makes Alibaba be able to trick over 6,700 customers in many provinces and cities (Dong Nai has more than 600 customers) with a total amount of up to 2,500 billion Dong.
Through the above information, we can realize that these companies do business with customers in the following forms: “Contribution agreement”, “Contract of agreement on real estate transfer conditions”, “Principle agreement on real estate transfer", “Contract on promise of assignment”, “Deposit agreement”, “Reservation agreement”. Many projects with legality are unclear and not qualified for real estate business but owner of the project still offer transactions and purchases with the aforementioned forms leading to many cases after receiving the capital contribution from customers, owner of the project could not be implemented, customers disputes and complaints.
To ensure the method of "selling houses on paper" is less risky, DTD recommends that buyers should consult legal regulations about real estate business in Vietnam. As follows:
Law on real estate trading
Article 55. Requirements in terms of off-the-plan real estate to be put on the market
1. There are documents on land, project documents or construction drawing approved by competent agencies, License for construction if it is required, documents on certification of completion of technical infrastructure in equivalent to project progress; or it is required to gain the certification of completion of the foundation of the building regarding off-the-plan apartment buildings or mix-used buildings.
2. Before entering an agreement on sale or lease purchase of an off-the-plan building
Within 15 days from the day on which the notification is received, the agency in charge of housing of province shall respond in writing to the investor with the building permitted to be sold or leased purchase; if the building do not meet the requirements, they must provide explanation.
Article 56. Guarantee on off-the-plan building sale or lease purchase
1. The investor’s financial obligations must be guaranteed by a competent commercial bank in case the investor fails to transfer the building on schedule as commitment to clients before the investor sell or lease purchase off-the-plan buildings.
The State bank of Vietnam shall issue the list of competent commercial banks which may give guarantee in the off-the-plan real estate trading.
2. The scope, requirements, content and guarantee fee shall be agreed by contracting parties and concluded in an agreement provided that responsibility of the guarantor must be ensured as prescribed in Clause 3 of this Article. The investor shall send the copy of guarantee agreement to the buyer or lessee when the agreement on sale or lease purchase is signed.
The guarantee agreement will stay unexpired until the building is transferred to the buyer or lessee
Therefore, in order to ensure the safety when signing the off-plan property agreement, real estate buyers need to consider the completeness as well as the legality of following documents:
Nowadays, "Fake" real estate in the form of houses formed in the future is quite popular in the market. Therefore, investors need to be alert and aware of the provisions of law that DTD has stated in the content of this article to avoid unnecessary disputes and legal losses.
