VCN- Booming in the past period, but so far condotel has not been recorded in the legal documents related to housing and real estate.
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Besides owners, the property rights of investors have not been officially confirmed by the authorities, so the liquidity of condotel will also be affected. The introduction of this type of real estate into law management should be paid close attention, after nearly 5 years of "outlaw".
The Law has not "covered"
Born in 2014, condotel is currently witnessing a boom in the number of products entering the market. According to data of the Vietnam Real Estate Association, in 2017, in some key markets such as Da Nang, Khanh Hoa, Phu Quoc, Binh Thuan, Quang Ninh, there were more than 22,800 tourism apartments offered for sale, with the number of successful transactions being more than 12,500 units.
However, unlike the traditional hotel rental business, many developers of condotel projects sell these apartments to raise funds for projects with a commitment to provide apartments and ownership certification with high profitability. And the story of this type of real estate has become "hot" so far, because no condotel apartment has been issued "red book", which may pose risks to customers. In fact, the condotel is not legally defined in Vietnam, except for the concept of"Tourist Apartments" in Article 48 of the Tourism Law, but unfortunately, this is not a law relating to housing and land. Mr. Nguyen Tran Nam, Chairman of the Vietnam Real Estate Association said that because this was a new type of real estate, it had not been regulated in the relevant laws, thus causing difficulties in the management of the agency, affecting the legal and legitimate interests of people as well as businesses.
Prof. Dr. Dang Hung Vo said that according to the Land Law 2013, land for development of condotel is land for non-agricultural business services with a normal life of 50 years, in some cases 70 years. However, some localities have assigned this land according to the regime of long-term use. Besides, some localities still allocate land for service business.This fact has also been acknowledged by enterprises. The representatives of FLC Group said that Binh Dinh province has granted long-term land for enterprises, including condotel. However, because the land allocation is attached with electricity, roads, schools, stations, so the company has advised the province not to form housing units. Currently, more than 10 provinces such as Khanh Hoa, Da Nang, Quang Ninh, etc., have not formed housing units in some projects.
"According to the current law, condotel land use rights in resort projects are limited based on term of the project, and may be renewed", Mr. Le Hoang Chau said.
Condotel needs to be legislated
Regarding this issue, the representative of the Ministry of Finance have also warned.
Accordingly, Dr. La Van Thinh, Deputy Head of the Public Property Administration under the Ministry of Finance, emphasized that the current Law only permitted organizations and individuals to use land for a long term with respect to residential land after fulfilling their obligations. The remaining land types (other than residential land) shall only be used in the form of lease and use for a definite term. Buyers and sellers assume that the right to use land with condotel apartment is the same as the right to use residential land. However, in the long term, Dr. La Van Thinh said that it was necessary to study legal documents carefully. Thus, we must amend and supplement the provisions of the Law to ensure the property rights of the investors (secondary) as buyers of condotel apartments.
The issue of ownership of condotel is difficult due to the lack of a clear mechanism and this also reduces the liquidity of the product. According to the report of the Vietnam Real Estate Brokerage Association in the first quarter of 2018 in Nha Trang, the top resort and luxury condotels accounted for 35% of total transactions apartments in Nha Trang, Khanh Hoa, but in the fourth quarter of 2018, F1 investors will find it difficult to transfer because of poor liquidity.
To complete the legal status of the condotel, the Ministry of Construction recently said that the Ministry of Construction and other ministries will put content provisions on condotel type into the Law amending and supplementing the Housing Law, Law on Real Estate Business, Law on Construction and Law on Urban Planning.
On this issue, Prof. Dr. Dang Hung Vo said that the relevant ministries should propose legal solutions to the Government for early decision to solve this legal bottleneck. In fact, when land for development of tourism and condominiums is used as residential land, it is very effective in attracting large capital investment from secondary investors because they want to have permanent property ownership. This means that the adjustment of the Law has a great impact on the development of tourism and resort.
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VCN – Presenting from 2014-2015, the condotel segment (hotel apartment projects, villas, townhouses in the resorts) has ...
"In my opinion, the current Land Law needs to be amended in the direction that real estate investors are allowed to choose the form of residential land allocation or lease or for services in order to implement real estate development projects of tourist resorts. When selecting land, the person who is assigned land must fulfill the financial obligations. This will give investors more options for their investment. All information on land allocation and lease must be publicized so that secondary investors can decide on investment participation", Mr. Dang Hung Vo suggested.
By Hoai Anh/ Hoang Anh