3 Ministries speak out to find a way to solve the condotel 'problem'

Regarding the condotel in the past days about the collapse of the project in Da Nang because of the commitment to profit up to 12%, Mr. Ha Quang Hung, Deputy Director of the Department of Housing and Real Estate Market said, the Ministry of Construction will sit with the Ministry of Natural Resources and Environment and the Ministry of Culture, Sports and Tourism to find solutions for condotels.

Mr. Hung said that previously, according to Directive No. 11 of the Government, specific tasks were assigned to ministries. The Ministry of Construction studies, promulgates, amends and supplements regulations and standards for condotels. The Ministry of Culture, Sports and Tourism issues regulations on management and business, and the Ministry of Natural Resources and Environment issues specific guidance documents on land use regimes for this type of apartment.

According to Mr. Hung, there are 4 biggest problems of condotel. Firstly, the law does not have specific regulations on the Vietnamese name of condotels in the legal system (only the Law on Tourism has regulations on tourist apartments), other laws do not have regulations on types of condotels. For this project, there are no standards and standards for apartments.

Secondly, the issuance of certificates of ownership and use rights of these works encountered difficulties in terms of ownership term and land use regime. Third, condotel apartments are sold to households and individuals according to the market mechanism, the State does not intervene. Profits of investors comply with the civil law and the purchase and sale contract between the investor and the buyer. Fourth, regulations on management and operation of condotels are still lacking. Currently, there are no specific regulations for independent buildings with only condotel apartments.

Before the collapse of a project in Da Nang, Mr. Hung said that projects that promise profits of 12%, 15% and more will also be likely to fail in the near future.

Before that, in 2017, the Ministry of Construction sent a document to localities about condotels. The ministry has warned localities to be more cautious in developing these types of products, to help reduce the number of approved projects.

According to Mr. Hung, condotel is a new type of real estate, which has been developing rapidly in Vietnam since 2015, peaked in 2016, 2017. However, from 2018, 2019 the resort real estate market tends to tend to slowdown. Notably, the number of newly appraised condotel projects is expected to decrease by 80% in 2019 compared to the peak. According to statistics of the Ministry of Construction, from 2015 to now, there are over 30,000 condotel units. In the third quarter of 2019, there were only 2,515 successful transactions, the number of condotels (appraised by the Ministry of Construction) in the third quarter of 2019 sharply decreased to only 198 apartments.

Mr. Hung said, the Ministry of Construction will require the locality to be transparent about information on condotel deployment and profit commitments. At the same time, it is recommended that banks strictly control credit investment sources for real estate projects, including condotels...

Mr. Mai Van Phan, Deputy General Director of the General Department of Land Management (Ministry of Natural Resources and Environment) affirmed that the land use regime assigned to the condotel project is what land is allocated according to that land. Specifically, land allocation for production and business will be based on production, business and services. Currently, no locality has asked about the difficulty of granting "red book" to condotels. Previously, a business and Khanh Hoa province asked, and the General Department sent a very clear reply.

According to Mr. Phan, the land use regime has long been clearly defined in decrees and circulars. Currently, the "entangled" condotel is when the investor advertises the sale as a permanent red book. However, these projects are allocated land by the state for production and business, approved projects are also business projects, and so are construction permits. Issuing permits will have to comply with the law, but cannot be granted to residential land.

Sharing about the fact that in the past, a locality issued the wrong condotel project to residential land, Mr. Phan said that Binh Dinh in 2017 granted land for a long term to the condotel which had been recovered and repaired. From 2018 up to now, the project when making the application is granted in the production and business section, the project is a hotel apartment, the term is 50 years very clearly.

“Investors when selling to buyers must be honest. What purpose do you assign? What is that property? Over here, you keep advertising as a permanent red book. When people buy it, it is not right to use public opinion of the people to force the government to correct it and legalize it," said Mr. Phan.

Mr. Phan also expressed concern when many condotel investors are now "multi-level", dishonest advertising. "This investor must review, the locality must monitor, not pressure the state," said Mr. Phan.

According to the Tien phong