I. Contents of the Draft Amendment to the Law on Real Estate Business
According to the Ministry of Construction – the agency in charge of drafting the Real Estate Business Law Project, the Draft Law will focus on addressing 4 policies:
– Policies on real estate business;
– About real estate service business;
– Regarding regulation for the stable and healthy development of the real estate market;
– Policy on state management in the field of real estate business.
Notably, the Draft will have new content in Chapter IX with 4 Articles on:
– Principles of regulating the real estate market;
– Cases where it is necessary to regulate the real estate market;
– Assess the situation of the real estate market;
– Measures to regulate the real estate market.
In recent years, the policy to regulate the real estate market has not been legislated and is only regulated in segments. Now, the Draft Law has mentioned and listed urgent cases that propose regulating the real estate market. Article 84 of the Draft Law provides for the following cases:
1. When the real estate market is out of balance between supply and demand for real estate products.
2. The real estate market fluctuates abnormally, affecting socio-economic stability.
a) Abnormal increase in transaction volume and transaction price of all types of real estate;
b) Abnormal decrease in transaction volume and transaction price of all types of real estate.
3. When unusual factors appear such as natural disasters, epidemics, war, economic crisis… And other unusual factors can greatly impact the real estate market.
Accordingly, this content aims to regulate and stabilize the real estate market in cases where the market grows hot and projects freeze.
II. Experts make recommendations on the Project to amend the Law on Real Estate Business
On the morning of April 12, a verification session took place on the draft amendment to the Law on Real Estate Business. At this hearing, the former director of CIEM suggested that it be necessary to restructure and narrow the scope of regulation of the Law on Real Estate Business. Accordingly, the concept of “Real estate business” is redefined. And the scope of this Law is only:
– Buying, selling, accepting transfers, transferring;
– Lease, sublease, and provide real estate brokerage services.
In addition, there are suggestions to remove the regulation “Guarantee in the sale, lease, purchase of houses formed in the future”. Because this regulation increases the price, increases the selling price of the house, the buyer has to bear the bank guarantee fee… And the investor also has to pay a bank guarantee fee, which is usually about 2% of the total property value. This fee is usually very high. Therefore, deregulation is necessary for the method of reducing housing prices.
This suggestion was satisfactorily responded to at the appraisal session. The draft stipulates:
Before selling, leasing and buying houses to be formed in the future, investors of real estate projects must be granted a guarantee for the investor’s financial obligations… “. The goal of this regulation is to monitor the use of home buyers’ capital for the right purpose.
The draft Law on Real Estate Business is still in the stage of collecting comments and finalizing the drafting. Once the quality is ensured, the Draft is expected to be submitted to the National Assembly at its fifth session (expected May 22, 2023).
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