|Investors in commercial apartment projects may have to obtain written approval from property exchanges for every deal with a buyer under a proposal made by the cityâs Construction Department|
A proposed move to require property exchanges to give written approval for all deals between apartment investors and buyers has been criticized as a needless complication.
The proposal, contained in a draft document issued by the Ho Chi Minh City Department of Construction without a disclosed issuance date, seeks to clarify a circular from the Ministry of Construction on the Real Estate Trading Law.
The law stipulates that investors in apartments for commercial purposes have to sell them through the property exchange. It also sets out documentation required to acquire house ownership certificates for such apartments.
Both investors and property exchanges say the step is unnecessary and makes things more complicated.
According to the draft document, investors of apartment projects have to supply a document approved by the property exchange recognizing the deal, besides other documentation needed for buyers to apply for house ownership certificates.
Le Hoang Chau, chairman of the HCMC Real Estate Association, said the written approval by the property exchange was unnecessary, because the contract already mentions the location of the apartment.
âThe additional step will cause difficulties for buyers who may change their mind and sell the apartment to another before carrying out procedures to get the ownership certificate,â he said.
Bui Tien Thang, general director of Sai Gon Thuong Tin Real Estate Joint Stock Company (Sacomreal-S), added that the other buyer then would have to ask the property exchange to issue yet another written approval for the deal.
The director of a real estate enterprise in HCMC, who wished to remain anonymous, said the proposed requirement complies with the Real Estate Trading Law.
However, he added that it was also legal for an apartment to exchange hands many times even before its construction is completed, and the property exchange would have to update its approval for each transaction.
Instead, âconcerned authorities should require the property exchange to issue written approval only to the last buyer (the one that applies for the house ownership certificate),â he said.
Protection for buyers
The draft document also proposes that the investor has to apply for the house ownership certificate on behalf of the buyers, or supply sufficient documentation if the buyers want to apply for it themselves.
This must be done within a month after payment is made; and concerned authorities will issue the house ownership certificate within a month after all required documents are submitted, according to the proposal.
The director of a property exchange in HCMC said the document should also propose measures against violations by investors in order to enhance protection for buyers.
Le Cao Tuan, director of the Housing Administration’s Real Estate Department under the Ministry of Construction, confirmed that the property exchange will approve only the first deal on each apartment sold by the investor.
He added apartment buyers can sell apartments legally only after they get the house ownership certificate.
The first buyer, approved by the property exchange, may grant the power-of-attorney for the apartment to another buyer, but this will not be a sales contract.
No matter how many times the apartment changes hands under such authorization agreements, authorities will issue ownership certificates only to the first buyer who buys directly from the investor in the deal approved by the property exchange, he said.
Only after the first buyer acquires the house ownership certificate can she or he transfer it legally to another, he added.
Reported by Tran Thanh Binh