The Pain of Permit Cancellation: A Universal Woe!

MUTUAL BENEFITS

Following the Prime Minister’s directive to focus on reducing and simplifying administrative procedures in the construction sector, various ministries and sectors have taken steps regarding construction permits. Ho Chi Minh City’s People’s Committee is considering allowing citizens to register their construction plans with local authorities instead of applying for a permit. Dong Nai Province is also experimenting with eliminating construction permits in Bien Hoa and Long Khanh cities.

According to the Law on Construction, the process of obtaining a construction permit applies to construction works and housing in urban areas, real estate business investment projects, and large-scale housing projects. In rural areas, construction permits are not yet required. In urban areas, construction permits are mandatory for two groups of construction projects: real estate projects, commercial housing, skyscrapers, apartment buildings, and factories in industrial parks; and individual housing projects for urban residents.

Recently, many people have suggested that eliminating construction permits would benefit both citizens, businesses, and management agencies, reducing costs and accelerating project progress.

Mr. Vo Hong Thang, Deputy Director of DKRA Group, shared his thoughts on this matter, stating that eliminating construction permits is a necessary step in administrative reform. It aims to cut costs, save time, and reduce administrative burdens for citizens and businesses. The current reality shows that the process of obtaining a construction permit takes a long time and incurs significant expenses, directly affecting the progress and investment costs of enterprises and citizens.

“The Ministry of Construction’s recent proposal to eliminate construction permits is a suitable approach, reflecting innovative thinking in state management. If the elimination of this procedure is implemented in tandem with a transparent post-inspection mechanism and the application of digital technology, it will significantly shorten the time for project implementation and reduce administrative burdens,” emphasized Mr. Thang.

For citizens, eliminating construction permits can significantly save time and costs during the process of constructing their homes. Instead of spending 15-30 days or even months as is currently the case to complete the permit application process, citizens can proactively implement their construction projects quickly, flexibly, and in line with their personal needs.

For businesses, reducing administrative procedures will save time and costs in preparing permit applications, thereby promoting urban development and contributing to the acceleration of urbanization and providing impetus to the real estate market.

For management agencies, when construction permits are eliminated, local authorities only need to conduct post-inspections at the completion stage as an effective “checkpoint” to ensure compliance with construction regulations. This approach saves time and manpower for the apparatus.

Sharing a similar view, Ms. Giang Huynh, Director of Research & Consultancy, Savills Ho Chi Minh City, opined that the proposal to waive construction permits for projects with detailed planning of 1/500 or in areas with approved urban designs is a reasonable step. For these projects, technical indicators such as construction density, height, setbacks, and infrastructure have been specifically defined, so it is possible to apply a registration mechanism instead of the traditional permit application process while still ensuring compliance and supervision.

“Streamlining the procedures will enable enterprises to optimize their operations, bring products to market on time, and utilize resources more efficiently. Overall, this reform can contribute to improving the investment environment and boosting legal supply to the market,” said the representative from Savills.

WHO GETS EXEMPTED, AND WHO HAS TO WAIT?

According to the proposal, the elimination of construction permits will apply to areas with detailed planning at a scale of 1:500 or areas with approved urban designs. This means that not all construction works or houses will be exempt from permits.

Areas with detailed planning at a scale of 1:500: Cases eligible for exemption from construction permits include projects within the 1:500 planning area. These are typically newly developed areas with well-defined and comprehensive planning, often laid out in a grid pattern with internal roads. Construction indicators are very clear from the outset when the investor establishes the project.

For example, existing roads are level and have complete road boundaries of 8m, 10m, 12m, or 20m, with sidewalks on both sides; land lots have already accounted for road boundaries and do not need to reserve road boundaries when constructing. The land lots also have clear boundaries, without shared or private walls, or overlapping boundaries as in long-standing residential areas.

The land plots in each row or cluster have a similar size, for instance, 4×13, 4×20, 5×18, 5×20, or 8×20. Building height, front and rear setbacks, and construction density are predetermined from the beginning when the project is approved.

In some cases, the investor has handed over the project to the state for management, and for land lots that have not been built on before, there is no need to reapply for a construction permit. Instead, they only need to send a notification to the state management agency along with the pre-defined construction indicators.

Areas with approved urban designs: The second case is areas with approved urban designs, which means they have the same detailed construction indicators as in the 1:500 project area but are located in long-standing residential areas. In Ho Chi Minh City, there are still not many such cases, only a few on major road fronts.

A CHALLENGING UNDERTAKING

According to industry experts, eliminating construction permits is necessary but requires careful preparation in terms of institutions, human resources, and technology. Without a strong, coherent, and transparent management system, this policy may lead to negative consequences.

Moreover, eliminating permits without strict post-inspection control could lead to increased violations such as construction that deviates from the plan, exceeds height limits, or encroaches on boundaries…Particularly, citizens may face legal risks if they undertake construction without sufficient knowledge of the law or the necessary conditions to hire consulting units with expertise.

Previously, when citizens built houses, there was supervision from the inspection agency, and each construction stage was monitored and subject to timely reminders and disciplinary action if necessary. Now, with the elimination of permits and a focus on post-inspections, cases of self-construction that violate technical regulations, boundaries, height limits, or land use planning may face administrative fines, forced construction adjustments, or even complete demolition at the post-inspection and completion stage. These consequences not only cause significant financial losses but also affect the long-term psychology and lives of citizens.

At a recent press conference, Deputy Minister of Construction Nguyen Danh Huy stated that eliminating construction permits is the right thing to do, but the process of reviewing and implementing it should be meticulous.

Specifically, regarding legal documents related to the construction sector and permit regulations, the Ministry of Construction will review and evaluate them, including decrees and circulars issued by the Ministry of Construction.

Along with this, the Ministry of Construction will conduct an assessment and summary, as the entire permit issuance process for citizens is delegated to all localities. While creating favorable conditions for citizens and businesses, it is also necessary to assess the impact of eliminating permits on the legitimate rights and interests of citizens and businesses.

“The challenge is how to facilitate citizens while maintaining our role and ensuring the legitimate rights and interests of citizens and neighboring households. In crowded urban areas, when plots are combined and consolidated, how do we manage them? That is a challenge,” admitted Deputy Minister of Construction Nguyen Danh Huy.

Moreover, reviewing and eliminating permits for houses in deep alleys and lanes is also a significant challenge. Implementing this policy in the deep alleys and lanes of long-standing urban areas will likely lead to many inconsistencies, variables, and negative consequences that will need to be addressed later…

According to industry experts, the elimination of construction permits should be implemented gradually and controllably, avoiding a hasty approach. Initially, it should be applied experimentally to projects with detailed planning of 1:500, construction designs approved by competent authorities, or in industrial parks and new urban areas with a complete legal infrastructure system.

At the same time, it is necessary to invest in enhancing the post-inspection capabilities of local authorities, digitizing all planning and construction data, establishing strict and transparent inspection and supervision procedures, and imposing severe penalties. Only then will the elimination of construction permits truly be effective, contributing to the creation of a favorable and transparent investment environment.