HCMC to deal with illegal sale of residential developments

HCMC to deal with illegal sale of residential developments

Many housing projects have been offered for sale in Ho Chi Minh City without licenses by authorized agencies. The city government said that is an illegal way of capital mobilization and the violation will be penalized.

11:30, 27/02/2019

Located near Phu My Hung urban area, Sunshine City Sai Gon apartment project has been advertised many attractive fatures, but in fact, the project has neither completed foundation nor got permission by the HCMC’s Department of Construction.  It means that sale of apartments at the project is illegal under the Law on Housing.

Also, Gem Riverside project in District 2 has recently attracted media attention since it is ineligible for being put on market. Along with uncompleted foundation, the project has no infrastructure acceptance and notification of business eligibility.

Customers who want to buy homes at a project advertised as a mega urban area on nearly 400 hectares in District 9 have paid “goodwill deposits”, ranging from VND30 million to 50 million, to brokers. Up to 41 brokerage firms have participated in advertising this project, according to Sai Gon Giai Phong reporter’s inquiry. However, at the project’s site is an empty land lot with many cranes inside, while authorized agencies said the project’s legal procedures have not been approved. A representative of its developer also said the project has not been ready for sale.

In fact, there is no official statistics on how many projects in HCMC that have been put on market illegally. 

Talking to Sai Gon Giai Phong’s reporter, Tran Trong Tuan, Director of HCMC Department of Construction noted buyers have rights and responsibilities to learn about the eligibility of real estate projects. In case buyers know that projects are ineligible but still buy apartments there, it means they accept risks from the illegal civil transactions.

He said the Department of Construction is responsible for publicly announcing project information and penalizing illegal projects. The penalty will be conducted after inspectors find evidences of illicit capital mobilization by developers. Forms of dodging the law by receiving deposits are wrong. Real estate business must apply the Law on Real Estate.

Reportedly, the department has publicized all projects eligible for sale on its website. That means projects not listed in the website are ineligible.

At a recent meeting with local real estate firms, Tran Vinh Tuyen, Deputy Chairman of HCMC People’s Committee said there are lots of projects not meeting regulations for sale but developers have signed sale contracts with buyers to mobilize funds.

He proposed businesses to grasp and abide by the law when implementing projects to prevent future risks. For example, developers have signed contracts to sell their products while the projects are still mortgaged in banks leaving big consequences which have not been resolved.

HCMC authorities will publicly announce the list of businesses who do not operate well. Departments of Construction, Natural Resources and Environment, Planning and Investment have been asked to implement the publicity on mobile apps to each project to facilitate residents’ search for the legal status of projects. The program is expected to come into operation in 2019.

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