Spending billions to buy a mini apartment that hasn't been 'born' yet is no different from long-term rental

Mr. Pham Duc Toan, General Director of EZ Real Estate Investment and Development Joint Stock Company (EZ Property) affirmed that currently, mini apartments are a concept swap of a type of housing that is not regulated by law. Therefore, the fact that many people spend billions to buy still has no meaning of ownership, they are still just like renting in their own apartment.

According to analysts, mini apartments have no legal basis to be recognized as a type of housing for sale. In reality, most of them are individuals who buy land, then apply for a permit to build individual houses, and then divide them into closed apartments for sale.

This is a civil agreement, not a sales contract because there is no provision for the sale of part of the property.

Mr. Toan cited an example: an individual has a piece of land about 200 - 300 square meters wide. When building high-rise buildings and selling apartments, the owners of these apartments are not granted separate red books, but their names are jointly listed in one red book, in the form of shared assets.

“ Therefore, even though mini apartment owners spend billions to buy a house, they are not actually given a separate certificate, they only hold a common photocopied red book, used for the whole building, no different from renting a house, ” said Mr. Toan.

Mini apartments without red books are very risky for buyers. (Illustration: Cong Hieu).

Sharing the same view, lawyer Nguyen Thi Minh Thu - Hop Nhat Law Company Limited, Hanoi Bar Association also said that the current law does not have the concept of mini apartments. Because there is no record of this form as a type of commercial housing project, mini apartments are still considered individual houses. Buyers are not granted a separate certificate but only a certificate for the entire building.

According to the provisions of Clause 2, Article 6 of Decree No. 99/2015/ND-CP of the Government guiding the detailed regulations and implementation of a number of articles of the 2014 Housing Law, organizations and individual households with legally established houses, including individual houses designed and built with many floors and many apartments, with a minimum area of 30 square meters or more, designed in a closed style, meeting the requirements of apartment buildings, shall be granted a Certificate of Ownership by a competent State agency to the owner of each apartment to ensure the legal rights and interests of the owners.

In case the owner sells, leases, donates, or inherits an apartment in this house to another organization, household, or individual eligible to own housing in Vietnam, the right to use the land attached to this house belongs to the common use of the subjects who have purchased, leased, received, or inherited the apartment.

" Thus, for the type of mini apartment - individual housing, if it meets the prescribed conditions, a certificate will be granted for each apartment. If the mini apartment does not satisfy the prescribed conditions, only one certificate will be granted for the entire building and may have the names of the co-owners," said Lawyer Thu.

According to Ms. Thu, currently most mini apartments in Hanoi do not meet the conditions to issue certificates for each apartment. Therefore, buyers of mini apartments are not granted red books, but only keep a photocopy of the red book, which cannot be used as collateral for bank loans for business purposes.

Many mini apartments are located deep in alleys and do not meet fire safety requirements. (Photo: Cong Hieu).

Regarding the legality of mini apartments, Mr. Le Hoang Chau - Chairman of the Ho Chi Minh City Real Estate Association (HoREA) said that currently, mini apartments are only mentioned in the law in the form of cheap private housing, but there is no concept of mini apartments.

According to Mr. Chau, the 2005 Housing Law and Decree 90/2006/ND-CP do not have any legal regulations that allow "the development of individual and family housing", designed in the style of mini apartments, with many floors and many apartments in urban areas. The development of individual and family housing must be in accordance with planning; have a construction permit; and must ensure the requirements for connection to the general technical infrastructure system of the urban area.

It was not until 2010, when Decree 71/2010/ND-CP replaced Decree 90/2006/ND-CP, that "the development of individual housing for households and individuals" was allowed, designed as mini-apartments, with many floors and many small apartments in urban areas.

“ This regulation is inappropriate and contrary to the 2005 Housing Law. When Decree 71/2010/ND-CP was still a draft, HoREA and the People's Committee of Ho Chi Minh City commented and proposed not to allow "the development of individual housing for households and individuals", designed as mini apartments, with many floors and many apartments in urban areas, with concerns that it would give rise to illegal, unlicensed, and unauthorized construction, disrupting planning and increasing pressure on the urban infrastructure system.

This is the legal basis for the development of mini apartment buildings in recent times and has been exploited to illegally build mini apartment buildings ," said Mr. Chau.

Because they have not been "born" yet and are "circumventing the law" by illegally building, in addition to breaking planning, mini apartments also increase pressure on the urban infrastructure system, do not ensure fire safety, and therefore do not meet the conditions to be granted red books to buyers.

According to Lawyer Nguyen Quang Ngoc, Director of Thien Viet International Law Firm (VIETSKY), the lack of a red book has made many people who buy mini apartments feel like they are renting in their own house. Because the apartment is not granted a red book, it also means that the buyer does not have legal ownership rights, cannot mortgage or use it as capital contribution when necessary during use.

In particular, in the event that the project's land is reclaimed for site clearance, the buyer's rights will be significantly affected and will depend heavily on the seller because they will participate as the person whose property is reclaimed.

So, it is clear that buyers spend billions of dong to buy an apartment, but in reality they can only live in it, and their rights to own and dispose of the property are very limited. Home buyers are no different from long-term renters, paying a large sum of money and staying for a long time.

Chau Anh

Source