The condotel market still needs detailed regulations to ensure its development is on the right track. -(Photo thuongtruong.com.vn) Hanoi (VNS/VNA) – Detailed regulations are needed to promote a healthycondotel market, which has been going off-track for years due to an unclearlegal framework, experts have said.
The Ministry of Natural Resources and Environment’s recent issuance of newguidelines about land use and the certification of non-residential constructionworks was a critical step for the development of condotels, property expert DangHung Vo said.
However, this would only solve half of the problem in the condotel market, hesaid.
“We need a legal framework developed by thinking about a sharing economy topromote the development of the condotel market and make tourism a spearheadindustry,” Vo said.
It was not necessary to specify whether a condotel is a hotel or an apartment,he said, adding that this kind of management thinking was outdated.
The lack of flexibility in management would cause difficulties forming astandard legal framework for these products and cause risks of a market crashin the future, he said.
Condotels should be treated as multi-purpose real estate, he stressed, addingthis did not conflict established laws.
Vo said that detailed instructions were needed to clarify ownership of land andnon-residential construction works to prevent disputes between condoteldevelopers and buyers.
In addition, different ways to operate multi-purpose real estate should bedeveloped, he said, adding that it was not necessary for buyers to offercondotels to the developers to manage, nor for developers to guarantee ratesfor profit in return.
The key to the development of the condotel market was a legal framework whichmade buyers feel safe and protected, he stressed.
According to Nguyen Chi Thanh, Vice President of the Vietnam Association ofRealtors, the condotel market in the country has large potential in the nexttwo decades.
Two important things for the success of condotels were the developedinfrastructure and efficient management, Thanh said.
Chairman of Hung Dong Law Firm Nguyen Danh Hue said that the certification ofcondotel ownership must be transparent. It must clarify when after landownership expires after 50-70 years, what would happen to the ownership ofnon-residential construction work built on that land.
Problems could also arise from a condotel which is used as a mortgage by bothdevelopers and buyers to borrow money from banks.
Experts said it would be necessary to have regulations about raising capitalfrom real estate which is unfinished or has not been built.
Procedures for transferring ownership of unfinished condotels must also beclarified together with regulations about resolving disputes.
Condotels, a combination of a condominium and hotel, appeared in Vietnam aroundfive years ago and saw rapid development in 2017-18, mainly in coastalprovinces and cities like Quang Ninh, Da Nang, Nha Trang and Phu Quoc Island.
However, the market stalled for two years due to the lack of detailedregulations, especially about ownership certification, which deterred buyers.
The Ministry of Natural Resources and Environment’s new guidelines about landuse and the certification of non-residential construction works came after CocobayDa Nang was not able to pay guaranteed interest to buyers, which hit thecondotel market hard.
The Ministry of Construction’s statistics showed that the resort propertymarket saw 6,697 transactions in 2019, accounting for 36.3 percent of the totalproperties put on sale – the lowest sale result in the past five years./.
VNA
