The HoREA stated that the current Draft Decree on renovation and reconstruction of apartment buildings has some shortcomings. Image: MarketTimes/Lê Sáng
According to the Ho Chi Minh City Real Estate Association (HoREA), the association has recently sent an “urgent” document to the Prime Minister and the Ministry of Construction, providing comments and requesting amendments to the Draft Decree on renovation and reconstruction of apartment buildings (Draft Decree).
Lack of regulations on additional financial obligations
Specifically, HoREA pointed out that Article 14 of the Draft Decree regulates the adjustment of approval for investment policies in apartment renovation and reconstruction projects not using public investment capital. This includes allowing adjustments to objectives, scale (number of apartments or commercial area), handover of technical and social infrastructure within the project’s scope, investment capital, and project duration, which may lead to additional financial obligations. However, the draft does not specify these potential additional financial obligations for project investors, and this needs to be addressed.
Additionally, HoREA noted that the draft only covers cases where the investor proposes to adjust the land use coefficient upwards but does not include cases where the investor proposes to adjust the approved investment policy as mentioned above. This may also result in additional financial obligations for the investor to the State due to changes in project objectives and scale (number of apartments or commercial area) or obligations to hand over technical and social infrastructure within the project’s scope.
Furthermore, the current regulations in the draft could also lead to changes in investment capital and project duration, impacting the project’s economic efficiency. Therefore, HoREA emphasized the necessity of adding this content to Clause 2, Article 40 of the Draft Decree to ensure consistency and uniformity in legal regulations.
Inconsistent regulations on the handling of public assets
Regarding the handling of public assets in the process of renovating and reconstructing apartment buildings, HoREA noted that Clause 1, Article 16 of the Draft Decree stipulates the selection of investors for apartment renovation and reconstruction projects through agreement on transfer of land use rights. This applies only to cases where the project meets the conditions specified in Clause 11, Article 60 of the Housing Law and there is no area of housing or land belonging to public assets. However, for apartment buildings, residential areas, and collective housing where the State has sold houses at market prices, there are still areas of housing or land belonging to public assets, such as corridors, staircases, building walls, and roof areas.
According to HoREA, this regulation is also inconsistent with other provisions. In cases where an apartment building, residential area, or collective housing has a portion of its area belonging to public assets, the representative of the owner of the housing belonging to public assets or the agency authorized by the owner of public assets shall participate in the meeting to select the project investor.
Moreover, HoREA stated that the Draft Decree does not clearly define the mechanism for compensating for other areas of housing or land belonging to public assets that are not apartments. Clause 1, Article 16 of the draft does not align with reality, as over the past few decades, the State has implemented the sale of houses at market prices and, to reduce the selling price, has not included the value of the area of construction belonging to the common use of the apartment building (such as corridors, staircases, building walls, and roof areas) in the selling price. Therefore, in principle, these construction areas still belong to public assets, and in reality, there are still some mixed apartment buildings that include apartments sold at market prices, with a number of apartments or other areas such as office space still belonging to public assets,” said Le Hoang Chau, Chairman of HoREA.
Given the above issues, HoREA has proposed amendments to the title and Clauses 1 and 2 of Article 16 of the Draft Decree. These amendments are considered necessary to ensure consistency and uniformity in legal regulations and align with practical realities.
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