But the legal documents of the Ministry of Construction (MOC) and Ministry of Natural Resources and the Environment (MONRE) are unclear about condotels.

MPS against, MOC ‘doesn’t prohibit’

Deputy Minister of Construction on July 16 said MOC doesn’t prohibit conversion of condotels into houses, but the current laws on housing lack regulations on the conversion of the functions of commercial works in general, and condotels to houses.

Therefore, project developers who want to convert condotels into houses have to consider their ideas carefully and strictly comply with current regulations on investment, urban planning and construction; and ensure conformity with approved construction planning, land use planning, and local housing development planning, as well as the local technical and social infrastructure conditions.

The Ministry of Public Security (MPS) does not want condotels converted into houses and does not want to grant ‘red books’ (land-use right certificates) to all apartments.

Meanwhile, MPS strongly protests against the conversion of condotels into houses.

The ministry has named a series of real estate firms which have announced they have temporarily stopped paying profit to condotel buyers as committed.

Thanh Do Investment Development and Construction JSC, for example, has failed to pay profits as committed, citing financial difficulties.

MPS has recently sent a report to the Prime Minister about the legal problems related to condotels and officetels.

It cited a report of the Vietnam Real Estate Association (VNREA) as showing that there are 83,000 condotels, 28,000 tourism villas, more than 12,600 hotel rooms and 15,600 shophouses, mostly located in Hanoi, HCM City, Quy Nhon, Binh Thuan, Khanh Hoa, Da Nang, Kien Giang and Quang Ninh. There are 16,523 offictels.

It pointed out that the investment, trade and transfer of these types of properties have been carried out under many complicated forms.

Meanwhile, the current legal framework is not good enough, with many loopholes existing, thus causing difficulties for state management, risks for buyers and affecting economic security and social order.

According to MPS, the current regulations don’t clearly stipulate the subjects to be granted the certificates on property (condotel and tourism villa) ownership.

The Ministry of Natural Resources and the Environment (MONRE), in a legal document, only says the land to build condotel, officetel and sea villas is commercial land and the products meet the requirements to be transferred under the Real Estate Business Law.

However, MONRE doesn’t say clearly to whom the property (condotel, offictel and tourism villa) ownership certificates should be granted – the investors of the projects or to each apartment.

If certificates are granted to each buyer of projects, security problems will arise.

The unclear regulation on granting red books may pose threats to credit institutions’ safety, because most condotel projects are used as mortgage by investors at banks for loans.

Kim Chi

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