Condominiums built after 1994 must contribute funds for reconstruction
The Draft Decree on reconstruction and rebuilding of condominiums, which is currently being reviewed by the Ministry of Construction, includes a chapter on the contribution of funds for the reconstruction of condominiums.
According to the draft, it specifies the specific mechanism for contributing funds to rebuild condominiums for condominiums built after 1994.
According to the Draft Decree on renovation and reconstruction of condominiums, old condominiums built from 1994 to the present must contribute funds to build new condominiums.
Specifically, for newly built condominiums after 1994 that are still suitable with current planning, condominium owners are responsible for contributing funds for the reconstruction of condominiums. If they do not contribute funds, they will be compensated for the right to use land, the remaining value of the house (if any) according to the regulations of the Government.
According to the Ministry of Construction’s Draft, the contribution of funds shall be carried out according to the following principles: For the area within the condominium, condominium owners shall contribute funds according to the area of the new condominium or other area not for human condominiums (x) the standard price for the construction of new condominiums issued by the provincial People’s Committee at the time of compensation plan formulation.
The Housing Law No. 27/2023 / QH15 which becomes effective on January 1, 2025 will stipulate that for old condominiums, built before 1994, the current housing law provisions on applying the K coefficient for compensating apartments will continue to be inherited.
Condominium owners of other areas within the condominium shall only contribute funds according to the regulations at this point if they continue to request the State to lease the land. In case they do not request to continue leasing the land, the State will recover the land to lease to the project investor for reconstruction and reconstruction of the condominium for this area and compensate for the other area owners (if any).
For the commonly used area that is not the area of constructing condominium buildings, the State will recover the land, allocate land, lease the land to the project investor to implement the project according to the regulations of the land law.
The draft also stipulates that the contribution of funds by condominium owners with the project investor must be stated in the sales contract, lease of apartments according to the prescribed form.
Based on the contract templates stipulated in this Decree, the parties may agree to supplement additional content to suit each specific case but must not be contrary to the provisions, clauses, contents already mentioned in the contract, contrary to social ethics and legal regulations. The notarization, authentication of these contracts shall be carried out according to the provisions of the Housing Law.
Regarding the time for contributions and the form of contributions for the reconstruction of condominiums, the draft also provides for cases according to the project implementation schedule or a one-time payment after handover of the apartment.
In the case of contributions according to the project implementation schedule, the payment shall be made according to the payment regulations in sales, lease-purchase of houses, buildings formed in the future according to the Real Estate Business Law and must be specifically stated in the sales contract, lease-purchase contract of houses.
In the case of a one-time contribution after handover of the apartment, the owner is responsible for making the full payment as agreed upon in the sales contract, lease-purchase contract of houses signed with the project investor.
