The Ministry of Construction is seeking opinions on the draft Decree stipulating administrative sanctions for construction violations, which includes a fine of up to 1 billion VND for four types of violations.
Specifically, the draft Decree proposes a fine of 800 million to 1 billion VND for the following four violations:
First, the investor fails to disclose information about mortgaging houses, construction works, floor area in the works, land use rights, or real estate projects for business purposes.
Second, engaging in real estate business without meeting the necessary conditions.
Third, transferring real estate business contracts belonging to a project that does not meet the required conditions.
Fourth, transferring the whole or a part of a project that does not meet the required conditions. For this violation, the investor will also face a business suspension of 3 to 6 months for the violating project.
In addition to the fine, investors will also face supplementary penalties, including a suspension of real estate business for 3 to 6 months for the violating project.
For signing capital mobilization documents and mobilizing capital for housing development without meeting the prescribed conditions, enterprises may be fined between 600 and 800 million VND. The current Decree No. 16 does not have a fine frame at this level.
In reality, there have been numerous real estate projects in which investors’ mortgages have affected the rights of home buyers, causing endless troubles as they are unable to obtain the certificate of land use rights, ownership of houses, and other assets attached to the land (pink book).
The Ministry of Construction proposes a fine of up to 1 billion VND for investors who fail to disclose project mortgage information. Photo: Hoang Ha |
In Ho Chi Minh City, according to statistics from the Department of Natural Resources and Environment in 2023, there were 60 housing projects mortgaged by investors to banks. Of these, 41 projects were mortgaged between 2016 and 2023, and many were mortgaged as far back as 2008-2011, resulting in home buyers not receiving their pink books.
There are three types of mortgages used by investors in these projects: mortgage of land use rights (land); mortgage of land use rights and future assets attached to the land (land and house); and mortgage of future assets attached to the land (house on land).
According to regulations, before applying for pink books for homebuyers, investors must remove the mortgage and submit the original certificate of land use rights to the Department of Natural Resources and Environment to adjust and change the land use to common use.
However, in reality, some investors fail to remove the mortgage, resulting in the project being “stuck” without pink books for an extended period. An example of this is the “D’.ElDorado 2” apartment project in Xuan La ward, Tay Ho district, Hanoi.
In a document responding to residents’ opinions in late 2023, the Hanoi People’s Committee stated that in December 2020, the investor submitted a dossier for legal appraisal of the issuance of certificates for homebuyers in the project. However, the project was found to be mortgaged at a bank.
Therefore, in June 2022, the Hanoi Land Registration Office issued a notice rejecting the dossier due to failing to meet the conditions as the project was not cleared from the mortgage as required.
In mid-2023, the Land Registration Office held a meeting with the Management Board of the building and the investor to discuss and agree on the above content.
Hong Khanh
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