Property investors will face heavy fine for illegal mobilization
According to the Government’s Decree 16/2022/ND-CP stipulating penalties for administrative violations in construction including the level of fines for violations of regulations on real estate business.
The Decree stipulates that investors of real estate projects who raise capital in contravention of regulations will be fined up to VND1 billion.
Specifically, a fine of between VND 800 million and VND1 billion shall be imposed on an investor of a real estate project that commits one of the following acts such as transferring the whole or part of the project against the prescribed procedure or transfer the whole or part of the project without fully ensuring the requirements or conditions as prescribed.
If investors of real estate projects transfer the whole of the project or a part of the project without a certificate of land use right, when there is a dispute over the land use right or it is being distrained to ensure judgment enforcement; plus, the transferee is not a real estate enterprises or not having sufficient financial capacity as prescribed shall be sanctioned according to the provisions of the Government's Decree on sanctioning of administrative violations in the field of land.
In addition, if investors hand over houses and construction works to customers before completing the investment in housing construction, construction works and technical and social infrastructure works according to the schedule stated in the approved project, they will receive administrative penalties also.
Moreover, if investors have not yet ensured connection with the general infrastructure system of the area, has not completed the entire exterior (in the case of handover of houses or rough construction) or has not yet completed the acceptance test or has not yet had documents approve the acceptance test results of competent agencies to put housing works, social infrastructure works into use according to regulations, they will be fined also.
Furthermore, investors use the payments from the purchaser, lessee who purchase real estate in the middle of construction for improper purposes, they will be punished.
The Decree also stipulates a fine of between VND100 million-VND120 million (US$4,424 - US$5,309) for one of the following acts real estate business without establishing enterprises or cooperatives according to regulations, failing to disclose or incompletely or improperly disclose the contents of real estate projects or housing construction investment projects according to regulations, the real estate business contract is not made in writing or the real estate business contract is not complete with the main contents as prescribed or in contravention of the law, failing to provide information on construction investment progress or the use of advance payments upon request.
Investors will face a financial penalty ranging from VND100 to VND120 million not allowing the purchaser, the lessee to inspect the actual construction progress and quality of the work as prescribed or collect fees related to real estate transfer in contravention of regulations.
A fine of between VND 120-160 million shall be imposed on an investor or owner of a house or an apartment building who fails to comply with the regulation. They sign a contract for sale and purchase or lease-purchase of a house or construction work without attaching the right to use the land with such houses or constructions or intentionally notifying the buyer of restrictions on ownership of houses and constructions.
Last but not least, a fine ranging from VND 400 million to VND600 million shall be imposed on those who commits one of the following acts such as trading in real estate that does not fully satisfy the prescribed conditions or is not allowed to be put into business as prescribed, trading real estate not within the scope of business as prescribed, building real estate business projects, housing construction investment projects behind schedule approved by competent authorities, selling or lease-purchase of future housing without a contract with a commercial bank capable of guaranteeing the financial obligations of the investor when the investor fails to hand over the house on schedule made commitments with customers or the contents of the guarantee contract are incorrect or incomplete as prescribed by law, collecting money from buyers, lessees to buy the real estate formed in the future not according to the project implementation schedule as agreed by the parties or collect in excess of a percentage of the contract value as prescribed.
