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.
