Ho Chi Minh City urges Prime Minister to address problems with realty mortgages

Ho Chi Minh City urges Prime Minister to address problems with realty mortgages

The current regulations on real estate trading, especially on mortgaging apartments that will be built in the future, have had certain adverse effects on the legitimate rights and interests of homebuyers and developers.
18:30, 23/09/2019
An aerial view of buildings in downtown HCMC. The HCMC government has called for the prime minister to resolve the problems affecting the mortgage of land-use rights certificates for apartment projects and their future apartment units. (Photo: Thanh Hoa)

In a September 13 report to Prime Minister Nguyen Xuan Phuc, the city government highlighted a major obstacle to property trading, which may also affect social order.

The city said the prevailing regulations allow investors of housing projects to use land-use rights certificates and to-be-built homes as collateral to take out bank loans.

It added that many developers have mortgaged both certificates of land-use rights for their apartment construction projects and the apartment units they would build in the future. This means they have twice used their land-use rights as security for loans.

Developers should be entitled to mortgage either their projects or housing units only when relevant requirements are met, according to the city.

If apartments in certain projects are being mortgaged and their investors are in need of capital or intend to put their housing units up for sale or lease, they must liquidate their mortgage contracts or reduce the number of units earlier used as collateral for loans.

Also, developers should be required to seek a written confirmation from the local construction authority over whether their apartments are eligible for sale.

If investors, according to the city government, fail to repay their loans, the rights and interests of homebuyers would be put at risk.

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