Numerous commercial real estate projects are stalled due to obstacles in regulations regarding project transfers. The Ho Chi Minh City Real Estate Association (HoREA) has proposed amendments to Clause 3, Article 40 of the 2023 Law on Real Estate Trading to facilitate M&A activities in this field.
According to current regulations, investors are only allowed to transfer projects after fulfilling all financial obligations related to land use. HoREA argues that this doesn’t align with reality, as investors who have completed their financial duties only need to wait for about 21 days to obtain the Land Use Right Certificate, which is no different from the previous regulations under the 2014 Law on Real Estate Trading.
Therefore, HoREA suggests permitting project transfers even if the investor hasn’t fulfilled their financial obligations, on the condition that the transferee assumes the responsibility of fulfilling these obligations. This approach will help resolve the situation of hundreds of stalled projects while ensuring that the state budget still collects all taxes and fees.
HoREA proposes allowing project transfers even if the investor hasn’t fulfilled their financial obligations, provided that the buyer assumes these obligations. Illustrative image: QH
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HoREA cites Resolution 42/2017/QH14 on bad debt handling, which permits the transfer of real estate projects with secured assets without mandating the completion of financial obligations beforehand. Thanks to this resolution, during the 2017-2023 period, many projects were swiftly handled, leading to a more fluid market.
Additionally, the 2020 Investment Law (Clause 1, Article 46) stipulates that the transfer of projects outside the real estate sector only requires the projects to not be terminated and to meet the conditions in the investment approval document. HoREA believes that applying this principle to real estate projects would ensure fairness across different types of projects.
“Hence, if the proposal for cases where investors transfer real estate projects without completing financial obligations related to land use is accepted, and the transferee assumes these obligations, it will help invigorate the market, providing an opportunity to restart stalled projects. It will also ensure revenue for the state budget as the transferee enterprises will continue to fulfill financial obligations,” HoREA emphasized.
Creating favorable conditions for the development of a transparent and healthy real estate project transfer (M&A) market will help restart “stalled” real estate projects. Image: QH |
At the same time, HoREA believes that applying reasonable regulations across different types of investment projects will enhance transparency and equality in the real estate market. If approved, this proposal will motivate healthy and transparent market development and contribute to economic growth.
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143 Real Estate Projects in Ho Chi Minh City Awaiting Resolution During the 2015-2023 period, the Ho Chi Minh City Department of Construction recorded 86 commercial real estate projects that were halted or not implemented, accounting for 62.3% of the total 138 housing projects, with a land use scale of up to 964 hectares (resulting in a massive waste of land resources and enterprise investment capital). The total number of projects facing legal obstacles reached 220, including 72 projects transferred by the Prime Minister’s Working Group and 148 projects compiled by the Ho Chi Minh City Real Estate Association, of which 77 have been handled, achieving a 35% resolution rate, while 143 projects are still being processed. |
QUANG HUY
– 15:27 11/02/2025
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