Tighten Up on Procrastinating Projects in Ho Chi Minh City as the Land Law Takes Effect

Delayed Projects: A Common Issue in Ho Chi Minh City

Ho Chi Minh City has witnessed a stagnant and dull real estate market before the enactment of the 2024 Land Law. Numerous projects have experienced delays for years, with no signs of resumption.

In District 4, the Lancaster Lincoln project by Trung Thuy JSC, which began construction in 2017, remains stagnant after completing the underground structure.

Similarly, the D-One Saigon project in Go Vap District, approved in 2016 and developed by DHA Corporation under TTC Land, is yet to commence, leaving an empty plot of land.

Mr. Nguyen Duy Thanh, CEO of Global House Management Company, highlights a positive aspect of the 2024 Land Law: the state’s power to reclaim land without compensation for delayed projects.

Mr. Thanh states, “This protects the interests of buyers who have made deposits and payments, but the projects have been delayed for 5-7 years or even a decade.”

According to the 2024 Land Law, if the land for investment projects remains unused for 12 consecutive months after handover or if there is a delay of 24 months compared to the schedule specified in the investment project, the investor may be granted an extension of up to 24 months.

If the investor fails to utilize the land after the extension period, the state will reclaim the land without compensating for the land, assets attached to the land, or remaining investment costs.

Emphasizing Integrity and Transparency in Business Operations

Mr. Su Ngoc Khuong, Senior Director of Savills Vietnam, comments that this regulation aims to prevent investors with insufficient capabilities from acquiring land, hindering urban development. However, he also emphasizes the importance of legal clarity from managing authorities.

“If legal obstacles in the real estate sector can be resolved within 12 months, it would be a positive step for the market. We must ensure a balance between the interests of enterprises and urban development,” says Mr. Khuong.

Ms. Duong Thuy Dung, Executive Director of CBRE Vietnam, adds that the 2024 Land Law necessitates enterprises to be well-prepared and agile in project development. Reputable and well-organized investors would not want their projects delayed due to mistakes.

Therefore, Ms. Dung believes that the law’s positive impact is to encourage enterprises to operate with enhanced transparency and integrity.

“Investors will proactively expedite project development to avoid increased costs. In the coming time, this is a positive signal for the market as a series of stalled projects will be addressed,” says Ms. Dung.

Additionally, he emphasizes the need to carefully consider cases where investors without financial capacity transfer projects, potentially affecting the rights of the receiving party due to the approaching deadline.