Nearly 3 years ago, District 8 Import-Export Trading JSC. (sited in Ho Chi Minh City) was the investor of the construction project ‘Commercial – Residential Complex’ at the address of 175 Pham Hung Street in District 8. Despite being approved by the HCMC Construction Department, the project could not be launched as the investor had no legal land use right. It is now a temporary car parking.
Another investor for a residential building project in the south of HCMC shared that it has nearly finished the land compensation task, but still cannot starts the project since all of the construction land is of agricultural or other purposes, and thus unable to satisfy the requirement of having at least a lot with residential purpose.
“We have spent over VND1,500 billion (US$65.6 million) for land compensation and other works. Owning financial, marketing, implementation capacities, we are now still on the verge of bankruptcy because of those complicated legal procedures”, the investor complained in vain.
Statistics from the HCMC Construction Department reveal that since the Housing Law came into effect on July 1, 2015, about recorded 126 projects shared the same fate above just because they own no land lot of legal residential purpose in accordance with Section 1 of Article 23 in the Housing Law. This is rather harmful to the development of new residential areas since most real estate projects use the land of agricultural, non-agricultural, or specialized purposes.
Therefore, Law No.3/2022/QH 15 about amendments, supplements for nine laws changes the content of Section 1 of Article 23 in the Housing Law to ‘Having the right to use land lots of residential purpose or non-residential purpose but can satisfy conditions to change the land use purpose in order to implement an investment project’.
It is expected that the application document for amendments to the Housing Law will be presented to the National Assembly, and the Resolution to let this Law into consideration in the law and ordinance development program in 2023 will be approved at the third session in May 2022. They will be presented to the National Assembly for the first time in the fourth session in October 2022, and passed in the fifth one in May 2023.
HCMC Real Estates Association commented that this new regulation will help many accommodation projects having land lots of different purposes along with the residential purpose in the city to restart. However, it seems projects having land lots of non-residential purposes only, which account for most of the cases, might still get stuck.
Deputy Director of the HCMC Construction Department Huynh Thanh Khiet shared that there are now concerns over the use of terminologies in the newly amended Section 1 of Article 23 in the Housing Law. It is necessary to have clear formal instructions for these matters for related agencies and department to work smoothly.
The Construction Ministry promised to continue consider other issues during the time to modify the 2014 Housing Law to give more room for commercial housing development. These amendments will ensure synchronization with the (amended) Investment Law, the Land Law, the (amended) Construction Law regarding investors, main investors, land use forms to carry out commercial housing development projects.
In particular, the Construction Ministry will add cases of being allowed to use land lots of other purposes leased or allocated by the State via land use right auction, won from project bidding, or compensated by the State after land retrieval. The Ministry will also check and clarify the process of investor selection under the three forms of auction by seller, auction by buyer, and appointment, especially the last one in the cases of commercial housing projects to ensure law observation.
Deputy Minister of Construction Le Quang Hung said that the law modification process must be done with care to prevent any potential policy profiteering.
