Door locked to office rule solution

The implementation of a recently-issued rule forbidding the use of apartments as offices has revealed a shortage of guidelines. Document 2544/BXD-QLH, released two months ago by the Ministry of Construction (MoC), required Hanoi, Ho Chi Minh City, Haiphong, Danang, Nghe An and Thanh Hoa people’s committees to stop leasing apartments as offices.

However, the document has no guidelines on how the rule can be implemented. “The document has only some sentences on the necessity to re-control the use of apartments as offices, but nothing further for us to follow,” said a staff member at the management board of the N02 Trung Hoa – Nhan Chinh building in Hanoi.

Moreover, the document has not regulated fines if violations continue. The document said that all apartments which were leased as offices must be turned back into apartments. However, no deadlines have been set for the transitions back. “This situation has existed for a long time, and it is not easy to eliminate it in just a few days, especially when the fines are not clear,” the official said.

Nguyen Huy Hoang, director of a private company who has leased an apartment in the Trung Hoa-Nhan Chinh residential apartment building, said the rule was not reasonable, especially for his company, a small firm with only seven staff members. “My company is very small and we can only afford to lease in this apartment, not an office,” Hoang said.

He said many other companies which had leased the same apartments in the building and were using them as offices. “We cannot move to other buildings, which are charging much higher rents,” Hoang said.

According to Tran Nhu Trung, associate director and head of research at Savills Vietnam, the most vulnerable subjects were small- and medium-sized companies who were using apartments for offices.

This rule, Trung said, would not impact individual businessmen who use their apartments for offices themselves. However, Trung also confirmed that this rule was a good sign to warn tenants and owners on their responsibilities and rights.

For buildings designed as apartment and transferred to office spaces, there would be problems, Trung said. The function of the building also related to many different criteria, such as fire prevention, water and power supplies.

A single building, Trung said, was usually designed with different areas for living and office spaces, so that they would not affect each other. Vietnam now has more than 350,000 enterprises and 96 per cent of these are small- and medium-sized ones. Apartment rentals now range from $8 to $15 per month per square metre compared to $25 to $55 per square metre, per month for office leases.

VietNamNet/VIR

Tags: Vietnam real estate law, vietnam real estate market