Ministry proposes tough penalties on violations of land auction

The Ministry of Construction has just proposed to the Prime Minister to have tough penalties on violations of the law on land auction comprising of profiteering in the auction of land use rights.
Ministry proposes tough penalties on violations of land auction ảnh 1 Land lots in Thu Thiem area 
According to the Ministry of Construction, the winners of the auction of the four Thu Thiem golden land lots had offered unusual high prices compared to the starting price leading to public concern.
Currently, two businesses Viet Star Real Estate Investment Company and Binh Minh Trading Development Investment Company which had won the auction of plots 3-12 at VND24,500 billion (US$1.08 billion) and the land lot 3-9 at VND5,026 billion accepted to lose the initial deposit to terminate the land purchase agreement. Meanwhile two businesses have not paid the money despite three days past the due date of the first payment, said the Tax Department of Ho Chi Minh City.
The Ministry of Construction said that overselling some land lots and then putting down stakes, creating a virtual price level to manipulate the market, buying and reselling many plots of land won at auctions, and making illegal profits are taking place commonly in many places and these cases have been organized by some individuals.
The price of the land auction was many times higher than the starting price, which had an impact on the regional real estate market. For instance, the Thu Thiem golden land auction has affected the land price, housing, and real estate market in Thu Thiem area.
After receiving information about winning the auction of four land lots, the selling price of land and houses in Thu Thiem area has simultaneously increased, but very few transactions have been recorded.
To rectify land auction activities in localities, the Ministry of Construction proposed the Prime Minister assign the Ministry of Natural Resources and Environment, the Ministry of Justice and the Ministry of Finance to strengthen inspection and examination of the implementation of regulations and strictly handle cases of violation of the law on auction for profiteering.
At the same time, the Ministry of Construction proposed the Prime Minister direct the State Bank to review credit institutions that lend money to investors for land auctions to ensure credit safety. In addition, relevant agencies should study and amend the provisions of the current law in the direction of unifying the form, order, and procedures in organizing the auction of land use rights for the determination of the starting price for auctioning land use rights.
For instance, they should add the requirement of the deposit amount before participating in the auction and the amount to guarantee the performance of the contract when winning the auction, and specify the time limit for the winning person or organization to pay the full amount of the auction winning amount to curb speculation of land prices.
Also related to this issue, the Ministry of Natural Resources and Environment has just issued its official letter No. 413 to people's committees in centrally-run cities and provinces on reviewing the auction of land use rights under the direction of the Prime Minister and the government.
People's committees in cities and provinces should focus on reviewing and inspecting the organization of the auction of land use rights in the area to ensure transparency as well as promptly detect and strictly handle cases of violations of legal regulations and prevent speculations to cause market disturbances and profiteering.
In addition, localities need to streamline auctioning of land use rights, focusing on strictly complying with regulations in cases where land-use rights must be auctioned, especially the following land areas in the city center.

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