(KTSG) – Housing Law 2023 was passed by the National Assembly on November 27, 2023, effective from January 1, 2025, with contents that are strategic thinking and planning in state management. to have a real estate market that develops stably, transparently and harmonizes the interests of all parties.
Overall, the 2023 Housing Law inherits the 2014 Housing Law; legalize guiding documents under the law; There are amendments and supplements to ensure the role of state management in planning and land use plans compatible with other types of specialized planning; have clear policies to encourage different economic sectors to invest in social housing construction; Reduce overlap, contradictions, and confusion when applying – avoid the situation where the same issue is regulated in different laws; Strengthen requirements for transparency in investment and business of housing projects.
Within the scope of this article, the author only presents from a personal perspective and limits the content to issues related to investing and trading real estate products in commercial housing projects. that are influenced and impacted by the provisions of the Housing Law 2023, based on a comparison of notable new points of the Housing Law 2023 with legal regulations on investment and business of housing projects. previous trade and implementation practices.
Overcome overlap and fragmentation in regulations on procedures and conditions for investment policy approval and investor selection
The 2023 Housing Law does not have regulations on procedures for approving investment policies and selecting investors to implement commercial housing projects as in the 2014 housing law. Specifically, Article 36 of the 2023 Housing Law no longer stipulates the form of selecting investors for commercial housing projects like Article 22 of the 2014 Housing Law (amended and supplemented by point c, clause 1, article 75 Investment Law 2020 and Article 4 of Law No. 03/2022/QH15 amending and supplementing a number of articles of laws such as the Investment Law, Housing Law…) but only regulate the conditions to be an investor of a housing project in commerce.
In addition, the 2023 Housing Law no longer encroaches on land laws to regulate land use forms to implement commercial housing projects as in Article 23 of the 2014 Housing Law, but uses the method The legal reference to specialized law is the Land Law 2024 (Article 36 of the Housing Law 2023).
Such an approach and regulations of the Housing Law 2023 are sufficient, reasonable and compatible with current investment laws. Accordingly, the Investment Law 2020 serves as a collection of regulations on authority, order, and procedures for approving investment policies and selecting investors for housing projects (formal law), in which There are commercial housing projects; The Housing Law 2023 and Land Law 2024 act as specialized laws (content laws), regulating conditions and requirements for investors of commercial housing projects and requirements when implementing housing projects. in commerce; as well as specific forms of land use, conditions for land allocation, land lease, and receipt of land use rights to implement commercial housing projects.
Before the Investment Law 2020, the procedure for approving investment policies for housing projects was governed by two laws: the Housing Law 2014 (housing investment projects) and the Investment Law 2014 (investment projects with general land use). The consequence of this is that it leads to incorrect understanding and application of regulations in approving investment policies in some localities, when there is a phenomenon of approving investment policies for housing projects that investors do not have the right to use residential land. This phenomenon is due to the “local” application of one or a number of related laws without connection, or there is “confusion” between regulations on authority in approving investment policies of different projects. Use land or have a request to change the purpose of land use (Article 33 of the Investment Law 2014) as a condition for approval of the investment policy to implement a housing project, then carry out land recovery procedures. people to hand over to businesses to advance compensation and site clearance on the basis of Article 58 of the 2013 Land Law.
Another example that causes difficulties for both management agencies and businesses is the case where an investor has the right to use commercial and service land, but not residential land, then some localities apply the 2014 Investment Law. To approve the housing project investment policy, after being approved for the housing project investment policy, the investor will change the land use purpose to residential land to implement the project. The question is, in this case, do investors and competent authorities have to carry out investor selection procedures as prescribed in Article 19 of Decree 99/2015/ND-CP on investor selection? Invest in commercial housing projects or not, because in the decision on investment policy according to the provisions of the Investment Law 2014, investor approval is included. In other words, in this case, if implemented according to the provisions of the Housing Law 2014, investor selection procedures must be carried out; if carried out according to the provisions of the Investment Law 2014, there is no need.
In addition, there are inadequacies related to procedures for approving investment policies, sometimes applying the 2014 Housing Law (the advisory agency approving investment policies is the Department of Construction), sometimes applying the 2014 Investment Law ( The advisory agency that approves investment policies is the Department of Planning and Investment), causing confusion for management agencies in the process of implementing housing projects that need to transfer the project. At this time, the authority to review and collect opinions from relevant departments and advise the Provincial People’s Committee on approving project transfer is the Department of Construction, while initially advising and approving the investment policy is the Department of Planning and Investment. investment, leading to a situation of “questioning back and forth” and requiring the previous consulting party to confirm the accuracy and compliance with legal regulations of previous proposals and consultations.
Hopefully, the upcoming regulations guiding the Housing Law 2023 will not set regulations on procedures related to approval of investment policies for commercial housing projects and selection of housing project investors. In commerce, it refers to legal regulations on investment; Nor do they set out regulations on the form of land use to implement housing projects, but only refer to or leave the contents related to land allocation and permission to receive land use rights governed by legal regulations. land law. This will make it easier for management agencies and investors to understand and apply legal regulations, will limit the situation where there are many different ways of understanding and applying the same issue, as well as overcome the situation. When it is necessary to amend an inappropriate content, it is necessary to review and amend many different laws that regulate that content.
Release the mortgage before selling
Another notable amendment in the Housing Law 2023, which has a major impact on the cash flow balance of commercial housing project investors, is the regulation that the project investor must release part or all of the project’s mortgage. before signing a capital mobilization contract according to the law (Article 183 of the Housing Law 2023), different from the previous housing law, Decree 99/2015/ND-CP allowing the seller to , the buyer and the bank (the mortgagee) agree to sell the house to be formed in the future but do not need to release the mortgage.
The fact that the Housing Law 2023 eliminates the “free agreement element” between entities participating in transactions demonstrates the viewpoint of thoroughly protecting common interests for the real estate market to develop healthily. The will of the parties participating in the transaction is no longer as important as the goal of monitoring and preventing the situation where investors have uncertain financial capacity and rotate capital to implement many projects at the same time, leading to Home buyers will be affected and disadvantaged if at the stage of handing over the house and preparing for the process of carrying out procedures for issuing “certificates” to customers, the project investor has not yet made arrangements. source of money to release housing mortgages.
From the perspective of a project investor, this regulation also requires the investor to have truly “stable” financial capacity, which can be said to be a difficult financial problem because before being eligible to mobilize capital mobilization, project development costs have also been allocated “quite a bit” into the preparation phase such as land costs, outsourcing costs (design consulting, project management consulting, supervision), Foundation construction costs and additional funds must be prepared to mortgage the property. Meanwhile, according to the previous method, investors only need to launch sales programs with discounts for customers, to get approval to sign a sales contract while the assets are still mortgaged to the bank. , revenue then continues to be accumulated according to construction and sales progress to carry out mortgage release procedures at the time of implementing the “certificate” procedure. The use of this capital is of course also controlled and supervised by the mortgage bank.
Limit agreements on receiving land use rights to implement projects
One of the issues that investors are waiting for is the mechanism for agreeing to receive non-residential land use rights to implement commercial housing projects. In this regard, the Housing Law 2023 is very reasonable in only recognizing the principle that the recipient of land use rights, the type of land that is allowed to invest in commercial housing construction, is approved as an investor in a housing project. In commercial housing (Article 36 of the Housing Law 2023), which type of land is considered the type of land allowed to carry out commercial housing projects, the conditions for receiving land use rights are determined by the Land Law 2024.
Expanding the issue, refer to Clause 2, Article 127 of the Land Law 2024, with this regulation, it can be understood that investors can only agree to receive residential land use rights to implement commercial housing projects. This regulation makes many investors feel disappointed, because it limits the land transfer mechanism on the basis of “voluntary contracts” and limits many social resources in addition to the State collection mechanism. return land. It can be understood that the mechanism for the State to recover land to auction to implement projects or organize bidding to select investors to implement projects is to avoid loss of state assets, improve competitiveness and transparency. in land use, which affects the well-being of many households. However, it cannot be affirmed that allowing investors to have the capacity to implement the project, have financial capacity, and reach consensus with land owners to form a land fund to implement the project will result in problems. negative or loss.
The issue that needs strict management here is planning, land use plans and ensuring revenue from converting other land use purposes into residential land to implement investors’ projects, on a monetary basis. S
Land use is calculated according to an appropriate valuation method, close to market value. Thus, the investor has just received the consent of land owners in the area (through an agreement to receive land use rights, an agreement to receive back real estate in the project), the State still has revenue from land (when the investor changes the land use purpose) and still shortens the compensation and site clearance time, avoiding waste of land resources.