The Manor apartment complex in Hanoi (Photo: VNA)

Hanoi (VNA) – The legal status and progress of properties will be made available to the public in order to reduce the risks for home buyers, according to an HCM City official.

Nguyen Toan Thang, Director of the HCM City Department of Natural Resources and Environment, said this will be part of efforts to promote transparency in the property market, which turned critical amid a recent spate in conflicts between developers and buyers.

Reasons for the conflicts and risks for buyers were varied such as the unclear legal status of projects, stagnant progress in construction, slow granting of house ownership certificates and violations by developers such as the ones happening in apartment projects Harmona, Bay Hien Tower and RubyLand in HCM City recently.

In such cases, it was the buyers who suffered, experts said at a recent conference.

“Especially, projects which were already used as mortgages for bank loans would also be publicly named,” Thang said. Violations by developers in using their projects as mortgages have becoming a cause for serious concern in recent times, he said.

Le Hoang Chau, President of the HCM City Real Estate Association, proposed making the publicising of information about property projects mandatory.

“Buyers really need transparent and accurate information about property projects and developers before a purchase to protect their rights,” economic expert Dinh The Hien said, and added that risks for buyers were growing as a large number of transactions were being conducted on unfinished projects.

Lawyer Tran Duc Phuong from the HCM City Bar Association said that the root of conflict between property developers and home buyers was weak management which made it easy for property developers to engage in violations and home buyers to be faced with a dilemma.

Experts said that under established regulations, property developers must have land use certificates before mortgaging their projects. In fact, many did not possess adequate documents but still managed to acquire loans by mortgaging their projects. Some apartments were even mortgaged for loans by both developers and buyers at the same time and the dilemma would grow worse in case developers did not have adequate financial capacity to repay debts.

Bui Quang Tin from the Banking University of HCM City said that banks should be blamed for weak management towards mortgaged assets as well as neglect in after-lending supervision.

Tin said that the management of mortgaged assets must be tightened to prevent violations and protect the rights of home buyers.

In addition, home buyers must study the capacity of property developers, the legal status of projects and the bank guarantees carefully, as well as ensure they have the contracts for their purchases, Tin said.

However, buyers said at the conference that there was too little information about projects from the management agencies while the information by developers was vague with regard to the legal status of the projects, construction progress and granting of house ownership certificates.

“There are loopholes in the legal framework while inspections and punishments are not strict enough,” Tran Trong Tuan, Director of the HCM City Department of Construction, said.

Tuan said the State management must be improved, estimating that some 20 percent of developers did not have the financial capacity and were only interested in making much money as fast as possible.

“The most important thing now is to improve the transparency of the property market to enable buyers to access accurate information,” said Nguyen Manh Khoi, Deputy Director of the Department of Housing and Real Estate Management Department under the Ministry of Construction.

Information about projects, especially those which are mortgaged, will be made public in the future, Khoi said, adding that a software is being developed for this purpose.

In addition, the responsibilities of property developers, banks and management agencies must be clarified while supervision must be tightened, Khoi said.

Vietnam makes bank guarantees compulsory for transactions on unfinished projects, with an aim to protect buyers.-VNA