Investors believe that the new laws have not yet given Condotels the recognition that the market desires. Illustration photo.
After the passage of the 2023 Real Estate Business Law and the 2024 Land Law, many market participants expected specific provisions to be clear and precise in order to accurately identify the segment of resort condominiums (Condotel).
However, the content of the two important laws that were passed shows that the definition of Condotels is still quite unclear.
In the 2023 Real Estate Business Law, the specifics regarding Condotels are unclear
In the 2023 Real Estate Business Law, the phrase “tourism” is mentioned 6 times, but the specific definition, function, ownership rights, etc. of resort condominiums (Condotel) seems to still not be clearly expressed.
Specifically, in section 3, article 3, explaining the term “Real estate project is an investment project to construct works for residential business, construction works, land use rights that have technical infrastructure and are approved by authorized state agencies in accordance with regulations of the law, including: investment projects in residential construction; investment projects in urban areas; investment projects in rural residential areas; investment projects in construction works serving educational, medical, sports, cultural, offices, commerce, services, tourism, accommodation, industry and mixed-use construction works; investment projects in technical infrastructure construction works; investment projects in industrial zone infrastructure, industrial clusters, high-tech zones.”
In section 2, article 5, it stipulates the types of real estate and real estate projects put into business regulations “Ready-built works, future-formed works, including works serving educational, medical, sports, cultural, offices, commerce, services, tourism, accommodation, industry and mixed-use construction works.”
In addition, the phrase “tourism” is mentioned in articles 19, 21, 44, however, these articles are considered vague and not specific.
Specifically, in article 19, it stipulates the obligations of the seller, lessor, rent-to-buy housing, ready-built works stating “The project investor when signing a contract to sell, lease, purchase condominiums, construction works or a part of the floor area in construction works serving offices, commerce, services, tourism, accommodation and mixed-use construction works in real estate projects for many customers must specify in the contract the contents…”
In article 21, it stipulates the obligations of the buyer, tenant, rent-to-buy housing, ready-built works stating “In addition to the obligations specified in Clause 1 of this Article, the buyer, rent-to-buy must fulfill the following obligations for the floor area in construction works serving commerce, services, tourism, accommodation in investment projects…”
In article 44, it stipulates Contracts in real estate business and the phrase “tourism” is mentioned twice in point 1 “c) Sale and purchase contracts, construction lease contracts, the floor area in works serving commerce, services, tourism, accommodation and d) Lease contracts for construction works, the floor area in works serving commerce, services, tourism, accommodation.”
Therefore, the 2023 Real Estate Business Law currently does not clearly express the concept of resort condominiums or vacation apartments (Condotel), which are commonly known for their multifunctional use, for both living and rental purposes.
Absence in the 2024 Land Law
In the draft Land Law submitted to the National Assembly and passed on January 18, 2024, the content related to land associated with resort condominiums and vacation apartments is not yet clearly and explicitly mentioned.
In Article 9, which stipulates the classification of land, there are no mentions of the phrases “tourism, vacation” and the Condotel type is considered to fall under the scope of regulation of item d, point 2 of Article 9 “Agricultural production, non-agricultural business land, including industrial land, industrial clusters; commercial and service land; non-agricultural production base land; land used for education, medical, sports, cultural, offices, commerce, services, tourism, industrial and mixed-use construction works.”
In Article 143, which stipulates the issuance of land use right certificates, property ownership rights associated with land for urban area construction, rural residential area construction, production and business projects with many different land use purposes, the Condotel type may fall within the scope of item C, point 1, specifically:
“1. Land assigned to investors to implement urban area construction projects, rural residential area construction projects that have multiple construction works or multiple floor areas with different land use purposes according to the provisions of this Law must clearly specify the position, area for each land use purpose and issue land use right certificates, property ownership rights associated with land according to the following regulations: c) In the case of apartment buildings combined with offices, service facilities, commerce, if the investor meets the requirements, they will be granted land use right certificates, property ownership rights associated with land for one or many apartments, offices, service facilities, commerce owned by the investor.”
Therefore, according to investors, in order for Condotels to truly have a “status”, they may have to continue to wait for regulations under the Law to be issued.
