Sunshine City Sai Gon project locates close to Phu My Hung new urban area, advertised with “Smartest parking lot in Vietnam” and “Smart city technology 4.0” but few people know that the project has neither completed foundation nor got permission by the city Department of Construction. That means the project’s opening for sale is illegal according to the Housing Law.
Similarly Gem Riverside city in District 2 invested by Dat Xanh Group has drawn media attention. Firstly, the project is ineligible for being put into business without built foundation, infrastructure acceptance and notification of business eligibility. The website of the HCMC Department of Construction does not have information saying that the project is eligible for sale.
Secondly the project locates in the 160 hectares resettlement area of Thu Thiem new urban area whose overall inspection result is about to be announced by the Prime Minister. Many wondered if the project area will be reclaimed or not. Thirdly Dat Xanh Company has dodged the law by authorizing Khang Hung brokerage firm to sign sale contracts and collect VND250 million an apartment from customers.
Brokers of a project advertised as a mega urban area covering nearly 400 hectares in District 9 have received “goodwill deposits” from customers, VND30-50 million (US$1,292-2,150) a square meter. According to Sai Gon Giai Phong reporter’s inquiry, up to 41 brokerage companies have participated in advertising the project. Still the site of the project is found an empty land with lot of cranes inside. Authorized agencies said that the project’s legal procedures have not been approved while compensation has been left half done. Meantime an investor representative said that the project has not been open for sale.
In fact, there is no statistics on how many projects that have been open for sale illegally. Recently HCMC Real Estate Association has made a recommendation to businesses with the content “Legal safety with the spirit of law-abiding.”
Talking to Sai Gon Giai Phong Newspaper’s reporter about illegal sale, director of the Department of Construction Tran Trong Tuan said that customers have rights and responsibilities to learn about the eligibility of property projects. In case they know that projects are ineligible but still buy, that means they accept risks from the illegal civil transactions and bear consequences themselves.
Referring to state management responsibilities, Mr. Tuan said that the Construction Department is responsible for publicly announcing project information and penalizing illegal ones. The penalty will be conducted after inspectors find evidences of illicit capital mobilization by investors. Forms of dodging the law by receiving deposits are wrong. Real estate business must apply the Real Estate Law instead of Civil Law.
The Construction Department has publicized all projects eligible for sale on the website of the agency. Those not listed in the website are not eligible.
Recently at a meeting with real estate businesses in the city, deputy chairman of HCMC People’s Committee Tran Vinh Tuyen said that there are many projects not meeting regulations for sale but investors have signed sale contracts with residents to mobilize funds.
Mr. Tuyen proposed businesses to grasp and abide by the law when implementing projects to prevent future nuts. For instance, some enterprises have signed contracts to sell their products to residents while the project is still mortgaged in banks leaving big consequences which have not been solved so far.
The city will publicly announce the list of businesses who do not operate well. It has assigned Departments of Natural Resources and Environment, Planning and Investment and Construction 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 this year.
According to a real estate enterprise, some businesses have illegally opened their projects for sale because of capital shortage. Specifically, they have spent much when implementing projects and faced pressure of debt payment so it is difficult for them to wait until the foundation of projects and relevant procedures are done.
The illegal capital mobilization will be advantageous when the market is good, vice versa, their projects will easily fall in stagnancy and bankruptcy because of investors’ weak financial potential.