Available constructions leading to false assumptions
Hundreds of people who have bought land within Tan Nhut commune Residential area and Mall (Binh Chanh) are crying for help as they are not allowed to build houses there.
When reports came in, it turns out the owner of this project, Huynh Thong Company, was found to have neglected their duty towards the land. Despite not having land use rights, they still managed to erect some hundred buildings within the complex, luring people into a false sense of credibility. As a result, new houses are not authorized to be constructed.
Upon filing complaints, people were dismayed to find that Huynh Thong Company also mortgaged the project and sell one single plot to many people.
In Long Thanh district in the neighboring province of Dong Nai, there were also petitions from people who have not been handed over the lands they bought from Van An Phat Real Estate JSC, while those who have are not able to start housing construction.
Regarding this project, the “purpose for using land” has not been altered to fit residential usage, although the physical pieces of land were evident with marking posts.
The owner of this project successfully exploited legal loopholes by establishing subcontracts that require buyers to pay up to 95% of contract value, which is utterly wrong by legal standards but still earn them payments from oblivious buyers.
Legal enforcement were called, but they deemed this type of contract a civil one and would not intervene, despite it being clear deception.
Some tips when investing in real estate
In most cases, people who get scammed are those with little legal knowledge and would not double check their contracts. Some even get tricked by “trend purchasing”, where they would buy projects that seemingly get lots of buyers, only to find out those buyers are planted by the real estate companies.
Pham Hoan Phuc, a member of Ho Chi Minh City Bar Association, gave suggestions for people looking to invest in real estate. To consider apartments under construction “safe to buy”, the foundation must be completed, and there must be a certificate of eligibility for capital mobilization and a bank guarantee.
For urban project lands, buyers should check for a state agency’s approval, a 1/500 zoning, completed financial obligations and also check if the project has been mortgaged.
When signing a contract, buyers need to request compensation liability, refund, and time of handover to be stated clearly.