Allegations of “Under-the-Table” Dealings with Investors
The Department of Natural Resources and Environment has recently submitted to the People’s Committee of Ho Chi Minh City for approval a proposal aimed at resolving difficulties and bottlenecks in specific land price determination in the city.
This proposal will focus on systematizing stalled real estate projects facing challenges in determining specific land prices and suggesting solutions accordingly. It will not, however, propose processing dossiers for determining specific land prices under the 2024 Land Law.
Currently, Ho Chi Minh City has hundreds of real estate projects that are either “frozen” or have temporarily halted legal procedures due to delays in land valuation. As a consequence, real estate developers are unable to supply housing products to the market to recoup their investments, leading to financial imbalances.
Meanwhile, homebuyers in these unfinished projects are frustrated as they have not received land-use certificates despite fulfilling their financial obligations.
 Despite 18 attempts to invite bids, no consulting firm has come forward to determine the land price for Lavita Charm apartment building in Thu Duc City. Photo: S.T |
According to the Department of Natural Resources and Environment of Ho Chi Minh City, the process of determining the land price for a project begins with selecting a consulting firm. While there are nearly 100 registered enterprises in the city with land valuation functions, in reality, fewer than 10 enterprises undertake this work. Many project dossiers have been put up for bidding, but no firm has participated.
The stringent regulations of the Bidding Law also contribute to the lengthy process of selecting a land valuation firm. Moreover, the lack of penalties for enterprises with valuation functions that refuse to participate in land price determination has resulted in a significant number of dossiers going through the bidding process more than ten times without finding a valuer.
The Department suggests that some consulting firms exhibit a “quick to take on, reluctant to let go” attitude and engage in “under-the-table” dealings with investors to receive additional valuation fees beyond the contract’s scope.
Basis for Granting Land-Use Certificates to Over 80,000 Homes
Over the past eight years, the Department of Natural Resources and Environment has advised and submitted to the People’s Committee of Ho Chi Minh City for approval, land price determinations for over 500 projects related to compensation, support, and resettlement. For real estate projects, the city has approved land prices for more than 350 developments.
The revenue from land use fees through land valuation for these projects is estimated at VND 86,700 billion, with an average collection of over VND 10,000 billion per year.
The determination of specific land prices is the basis for real estate project owners to fulfill their financial obligations regarding land use. Consequently, the authorities will consider granting land-use certificates to the developers and, eventually, to the homebuyers.
In the past, through land valuation, the Department of Natural Resources and Environment of Ho Chi Minh City has issued 109,826 land-use certificates, averaging 13,000 certificates per year.
However, a large number of project dossiers awaiting land price determination in Ho Chi Minh City remain unresolved, estimated at 200 projects with nearly 80,000 homes. Additionally, many housing projects have not been implemented or completed due to pending land valuation.
The prolonged process of determining land prices has increased investment costs, leading to rising real estate prices that exceed the affordability of prospective homebuyers.
Subjective reasons for the stagnation in land valuation include the reluctance of officials and civil servants involved in land price determination to provide advice and suggestions.
According to the Department, land valuation advisory work is quite complex and sensitive. In the past, inspections and investigations into matters related to land price determination have made a significant number of officials and civil servants anxious and hesitant to perform their duties confidently.
If approved by the People’s Committee of Ho Chi Minh City, the implementation of this proposal is expected to commence immediately and continue until the end of 2027.
Anh Phuong – Ho Van
