Controversy raised over legalization of condotels

By Thu Phuong - Jan 14, 2018 | 06:30 AM GMT+7

TheLEADERAbout the viewpoint of FLC Chairman Trinh Van Quyet on proposing to apply the civil code to settle legal issues for condotels, many lawyers disagreed because they said it was not suitable.

Controversy raised over legalization of condotels
Condotels are becoming a hot item in the real estate market. (Photo: Condotel Grand World Phu Quoc)

According to statistics from Vietnam Realtor Association, only in 2017, up to 23,000 condotels entered the market. As said in the articles recently published by TheLEADER, the issue of identifying condotels has ignited a growing debate in public.

Trinh Van Quyet, FLC Chairman

At the recent seminar "Investment and Business Opportunities 2018", Trinh Van Quyet, FLC Chairman, said that there was no need to amend the law; applying the civil code was enough to legalize condotels.

According to him, the civil code was enough as the condotel transaction was a civil contract between the capital-owner and the investors. The law is much larger than the Land Law and Housing Law, which are just specialized laws.

His view differs from the majority, which consent to the amendment of the Land Law and Housing Law to recognize the legal status of condotels.

Lawyer Nguyen Huynh Phuong Thao said that she had studied this issue very carefully and found that there was no mechanism eligible to legalize condotels other than the Land Law and the Housing Law.

The legal recognition of condotels by the Civil Code is not possible, as it is the fundamental law for all activities of the socio-economic life.

Meanwhile, when solving an issue of the specialized social relations such as land and real estate, the specialized law must be used, Thao emphasized.

Therefore, Thao said, the issue of condotels still need to be based on the Land Law and Housing Law first.

Agreeing with her, lawyer Le Net, a VIAC (Vietnam International Arbitration Centre) arbitrator, also said that Civil Law is a general law which handles everything, and it should be the last resort.

The Civil Code mentions the freedom to enter into contracts. However, this is only the relationship between the two parties, which embraces many risks. Meanwhile, for real estate, ownership is still the core of contractual relationships. If the ownership is not resolved, neither is the contractual relationship, lawyer Net emphasized.

Lawyer Truong Thanh Duc, Chairman of BASICO Law Firm’s Member Council

Lawyer Truong Thanh Duc, Chairman of BASICO Law Firm’s Member Council said that if the condotel is built on the residential land, the land use right certificate (LURC) issuance for the apartments is natural. On the other hand, if they are built on land leased or used for commercial services, then period-limited LURC should be granted for these projects, Duc said.

"In fact, Vietnam is doing things in a reverse order, which leads to the current situation. I think that condotels should be recognized to be more easily managed by the development of the market," said lawyer Duc.

The Ministry of Natural Resources and Environment has recently submitted a draft proposal to amend and supplement some articles of the Land Law 2013. The ministry has offered two options for determining the title of land for condotels.

The first option is to recognize it as residential land with the duration for the project owners of 50-70 years. After that period ends, the owner can transfer the land use right, and the recipient is granted a certificate of LUR, house ownership and other assets affixed to land.

The second option is to follow the current Land Law, which recognizes it as commercial land with the duration for the owners of 50-70 years. During that period, the owner can transfer land use rights, and the recipient is granted a certificate of LUR, house ownership and other assets affixed to land.

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