An upcoming auction features a resettlement project in Thu Thiem Urban Area.
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The Ho Chi Minh City Real Estate Association (HoREA) has submitted feedback on the draft Government Resolution addressing land use rights auction issues. They propose stricter regulations on deposit requirements and penalties for bidders who default after winning auctions.
HoREA suggests raising the minimum deposit from 20% to 50% of the starting bid, up from the current 10%-20%. This increase aims to filter out speculative bidders, reducing instances of auction cancellations or market distortions. “The current low deposit rates have created loopholes, leading to numerous auction disruptions,” HoREA explains.
Higher deposits ensure only financially capable investors participate. Winning bidders can convert their deposit into a down payment, while unsuccessful bidders receive refunds within three days post-auction.
HoREA also advocates for severe penalties against defaulting winners. Le Hoang Chau, HoREA Chairman, recommends forfeiting the entire deposit or down payment, plus compensation for auction costs and related expenses. Administrative penalties under judicial support regulations would also apply.
“The current draft lacks comprehensive penalties, especially for defaults leading to result cancellations. Insufficient compensation fails to deter violations. Only by forfeiting deposits and imposing additional penalties can we curb speculative bidding,” Chau emphasizes.
Additionally, HoREA urges extending bidding bans to businesses with payment defaults or forfeitures, not just individuals. This expansion is crucial, as larger companies would avoid bans, while smaller entities could evade restrictions by creating new legal entities.
Report and photo: Son Nhung
– 14:05 03/11/2025
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