Real estate experts call for amendments to property law

Real estate experts have asked the State to consider a new legal documentation system for the real estate market and regulations on charter capital, commissions and capital mobilisation in order to respond to current needs.

During a recent seminar reviewing the laws on land and real estate businesses, Nguyen Van Minh, deputy chairman of the Viet Nam Real Estate Association, said that according to current regulations, real estate businesses must have VND6 billion (US$288,000) in charter capital and at least 20 per cent of the total project investment or 15 per cent of a housing project in equity.

The rate was not meaningful so the State should remove the charter capital licence requirement for property projects to reduce administrative procedures, he said.

Nguyen Thi Nga, a law expert from the Ha Noi Law University, said the charter capital requirement of VND6 billion was insignificant when compared with business demand, which made the requirement unnecessary.

She recommended the State to abolish the low charter capital regulation which would encourage fair competition for property projects. The companies with solid financial capacity would thrive while those without sufficient funds would be forced to abandon property investment activities which required significant long-term capital.

With regard to regulations, there were many contradictions in terms of timing and the rate of mobilisation capital required for property construction projects among official letters and decrees. An amendment was needed to avoid duplication, conflict and difficulties in the application of the law, Minh said.

Additionally, a floor rate or ceiling rate should be set for remuneration and commissions for real estate brokers to create transparency in the market, he said.

Pham Sy Liem, deputy chairman of the Viet Nam Federation of Civil Engineering Associations, said the amended law on real estate business should consider the interests of property buyers because the current law was primarily focused on sellers and investors.

Source VNS

Tags: Vietnam Property market, Vietnam property sector, vietnam real estate market