On July 24, 2024, the Government issued Decree No. 95/2024/ND-CP detailing the 2023 Housing Law ("Decree 95") to replace Decree No. 99/2015/ND-CP ("Decree 99"). In general, compared to Decree 99, Decree 95 adds more mechanisms to create more homeownership opportunities for citizens and better ensure the rights of residents living in "housing" when the State recovers or implements socio-economic development policies and projects. The main contents of Decree 95 are as follows:
1. Identifying and clarifying issues regarding the ownership of housing by foreigners and foreign organizations in Vietnam.
1.1. Clarifying areas to ensure national defense and security where foreigners and foreign organizations are not allowed to own housing in Vietnam.
Decree 95 clearly stipulates the areas requiring national defense and security assurance, including:
- Areas adjacent to key areas needing national defense and security assurance;
- Areas adjacent to barracks, headquarters of armed forces, and areas within national defense and security land planning;
- Areas adjacent to headquarters and offices of state administrative agencies and Party agencies from provincial level and above;
- Areas in communes, wards, and towns along land, sea, and island borders;
- Areas of protective corridors for critical infrastructure related to national security;
- Areas where foreigners are not allowed to temporarily reside according to relevant laws.
Accordingly, within a maximum of 06 months from August 1, 2024, the Ministry of National Defense and the Ministry of Public Security will specifically identify areas requiring national defense and security assurance in the provinces and centrally-run cities.
1.2. Clarifying the number of houses that foreign organizations and individuals can own.
Decree 95 regulates similarly to Decree 99 that foreign organizations and individuals can own no more than 30% of the total apartments in a condominium; however, as the 2023 Housing Law allows mixed-use condominiums, Decree 95 clarifies and details some issues as follows:
- For condominiums: Foreign organizations and individuals can own up to 30% of the total apartments for residential purposes in the building; if the condominium has multiple sections or blocks sharing a common podium, foreign organizations and individuals can own up to 30% of the total apartments for residential purposes in each section or block.
- For individual houses: In an area with a population of 10,000 people, foreign organizations and individuals can own up to 250 houses, regardless of the number of projects in that area.
Accordingly, information on housing ownership by foreign organizations and individuals, including the number of houses in each housing construction project, the number of houses that foreign organizations and individuals have purchased, leased-purchased, and have been issued certificates for in each project, must be posted on the electronic information portal of the provincial housing management agency. Additionally, before issuing certificates to foreign organizations and individuals, the competent certification agency must check the information posted by the provincial housing management agency.
Decree 97 emphasizes that all transactions of buying, lease-purchasing, or gifting houses by foreign organizations and individuals exceeding the allowed number or in projects where they are not allowed to own houses are legally invalid and will not be certified by the competent authorities; the seller or lessor must compensate the buyer or lessee. This is considered a case of automatically invalid contracts, with the responsibility for compensation due to the contract's invalidity falling on the seller/lessor without needing a court decision. Therefore, to avoid risks, investors and house owners in Vietnam need to check information on the Department of Construction's website before conducting transactions related to foreign organizations and individuals.
2. Clarifying the estimated time for approving investment policies for housing projects in the housing development plan.
Decree 95 still stipulates that housing investment projects must comply with the housing development program and plan but adds clear regulations that the housing development plan must show the estimated time for approving investment policies for projects, project implementation progress based on assessing the current housing situation, the ability to balance supply and demand for housing, the urbanization rate, and the ability to meet traffic and social infrastructure requirements in the area where the project is planned, at the time of developing the plan.
3. Expanding the supply of housing for resettlement purposes.
The allocation of resettlement housing for people with legally owned houses subject to clearance when the State recovers land for defense, security, or socio-economic development projects has been a longstanding issue. Decree 95 regulates the expansion and diversification of housing supply for resettlement purposes to ensure the best support for people with recovered houses. Accordingly, resettlement housing can be formed from the following sources:
- Ordering the purchase of commercial housing for resettlement purposes;
- Purchasing commercial housing for resettlement purposes;
- Leasing, lease-purchasing, and purchasing housing in investment projects for resettlement purposes;
- Allocating social housing for resettlement purposes.
4. Detailing procedures for enforcing the transfer of maintenance funds for condominiums.
The management and use of maintenance funds ("KPBT") for condominiums have been a "hot" issue for many years; the ineffective management of these funds has resulted in many condominium infrastructures being unable to repair or replace, negatively impacting residents' lives. To address this, Decree 95 stipulates more stringent and forceful enforcement procedures compared to Decree 99 as follows:
- Changing the state management agency with the authority to decide and enforce measures from the provincial People's Committee to the district People's Committee where the condominium is located. This creates more convenience, reduces administrative procedures, and accelerates the resolution process for problematic condominiums.
- Detailing the enforcement procedures, including:
(i) Within 15 days from receiving the request, the district People's Committee inspects and sends a written request to the investor to transfer the MF;
(ii) If the investor does not transfer the MF within 15 days, the district People's Committee issues an enforcement decision and sends it to the investor and the credit institution managing the investor's MF account;
(iii) Within a maximum of 15 days from receiving the enforcement decision, the credit institution must transfer the amount in the investor's MF management account to the account established by the condominium management board;
(iv) If the investor's joint account does not have money or has insufficient funds to transfer, the condominium management board requests administrative violation handling against the investor.
(v) Within a maximum of 10 days, after the decision, if the investor still does not transfer the MF, the condominium management board requests the district People's Committee to ask the credit institution for information on the investor's business operation account. Within a maximum of 15 days, the credit institution must provide the information.
(vi) The district People's Committee requests the credit institution to transfer the MF from the investor's business operation account to the condominium management board's account.
(vii) If the above measures do not recover or fully recover the MF, the district People's Committee enforces the auction of the investor's assets to recover the MF.
Decree 95 takes effect from August 1, 2024.
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