Hanoi (VNA) - Continuing its first extraordinary session, the 16th National Assembly discussed policy orientations for amending the Law on Real Estate Business in Hanoi on August 22.
Protecting off-plan real estate buyers
Deputy Nguyen Thi Viet Nga from Hai Phong city called for a unified minimum standard to protect buyers of off-plan real estate under both the Law on Real Estate Business and the Law on Housing, while controlling cash flows even before properties become eligible for sale.
Under Article 20 of the draft, buyers may pay up to 70% of the contract value before receiving the property and up to 95% before obtaining an ownerhsip certificate, with the remaining 5% held in escrow or secured through another mechanism. The draft also features regulations on bank guarantees for off-plan housing.
But the draft housing law creates inconsistencies, she said. Social housing developers are not required to provide guarantees for off-plan sales or rent-to-own deals, and commercial housing sold within housing-for-rent projects is also exempt.
Nga proposed a unified principle under which any exemption from the guarantee requirement should be allowed only when an alternative protection mechanism of equivalent effectiveness is in place, such as a separate project account, controlling disbursements tied to construction progress, completion guarantees, or a mechanism to prioritise refunds to buyers.
She also urged closing a loophole involving the collection of customer cash before properties become eligible for sale. Clause 5, Article 18 allows developers to collect deposits of no more than 5% only after the property has met all conditions for being put into business.
The law should manage transactions by substance rather than contract name, she said. Before a property is eligible for sale, developers should be barred from receiving money, directly or through other parties, to reserve units, establish priority rights or secure a sale contract. Once legal conditions are met, any payment that is substantively a deposit must comply with statutory limits.
Curbing price manipulation
Deputy Nguyen Khanh Vu from Quang Tri province proposed adding several prohibited acts, including providing false information about projects, planning and prices, arranging or fabricating fictitious transactions to drive up prices or create artificial scarcity. Such additions would give authorities strong legal tools to thoroughly address real estate price manipulation, he said.
Dong Nai deputy Trinh Xuan An said real estate prices and speculative market manipulation are particular concerns, and the law must clearly distinguish between investment, speculation and manipulation. Investment should be encouraged, speculation limited, and market manipulation strictly dealt with.
He suggested adding prohibited acts into Article 6 of the draft law and tasking the Government with setting criteria to identify such conduct, including creating fictitious transactions, fabricating supply and demand, colluding to drive up prices, and providing or spreading false information./.
