New Penalties Proposed for Real Estate Business Violations in Vietnam
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Stricter Regulations and Hefty Fines for Non-Compliance in Real Estate Operations
The Ministry of Construction has proposed a new draft regulation that imposes significant fines on real estate businesses failing to meet operational standards. Companies not adhering to the stipulated conditions may face penalties ranging from VND 160 million to VND 200 million, along with a 3 to 6-month suspension of operations from the effective date of the penalty.
Individuals or organizations engaged in real estate business without establishing a legal entity, such as a company, cooperative, or cooperative union, could be fined between VND 120 million and VND 160 million.
Additionally, the Ministry proposes a fine of VND 240 million to VND 300 million for developers or real estate service providers who accept payments from customers outside of designated bank accounts. Such transactions must be immediately transitioned to compliant banking channels.
Failure to disclose, incorrect disclosure, or failure to update project information may result in fines ranging from VND 300 million to VND 400 million. Trading in properties or land use rights outside permitted forms or scopes can attract penalties between VND 400 million and VND 500 million.
Notably, collecting unauthorized fees related to real estate operations may lead to fines of up to VND 500 million to VND 600 million.
Stringent Measures Against Developers and Contract Violations
The draft regulation also targets violations by real estate developers. Failure to disclose mortgage information on properties or land use rights can result in fines from VND 600 million to VND 800 million.
Marketing properties or construction areas before meeting legal requirements may incur a fine of up to VND 1 billion, along with a 3 to 6-month suspension and mandatory refund of improperly collected funds to customers.
For future properties, developers lacking bank guarantees for financial obligations or failing to provide guarantee letters to buyers may face fines between VND 260 million and VND 300 million.
Improper collection of deposits, unauthorized sales or rentals, or misuse of funds can lead to fines ranging from VND 600 million to VND 800 million. Offenders must also return 50% of unlawful profits and reimburse customers upon request.
Transferring land use rights in non-compliant projects or to ineligible parties may result in fines up to VND 1 billion, along with returning 50% of unlawful gains and contract amounts if requested by the transferee.
Severe Penalties for Contract and Land Title Delays
Developers or businesses failing to use standard contracts, omitting key details, or improperly collecting fees during transfer confirmations may be fined VND 180 million to VND 260 million.
Selling or leasing properties without associated land use rights can attract fines of VND 260 million to VND 300 million. Non-compliance with pricing regulations for sales, transfers, rentals, or lease-purchases may result in penalties from VND 300 million to VND 500 million.
Transferring sales or lease-purchase contracts prematurely is considered a severe violation, with potential fines ranging from VND 800 million to VND 1 billion.
The draft also tightens developer responsibilities for submitting land and property ownership certification applications. Delays of 50 days to 6 months incur fines of VND 30 million to VND 160 million, depending on the number of units. Delays of 6 to 12 months result in fines of VND 160 million to VND 500 million, and delays exceeding 12 months may lead to a VND 1 billion fine.
Violation periods are calculated from the property handover date or full payment by the buyer/lease-purchaser until the administrative violation report is filed. If developers rectify issues after the deadline, the violation period ends upon completion of the corrective action.
According to the Ministry of Construction, this draft decree aims to enhance violation handling mechanisms in the real estate sector, ensuring market transparency, discipline, and consumer protection. The substantial fines and corrective measures are expected to deter violations and encourage legal compliance among real estate businesses.
– 08:30 04/11/2025
