Summary of regulations on final acceptance of residential buildings that you should know

At present, it is a reality that there are quite a few people who pay attention to successfully applying for construction permits without caring about procedures for final acceptance of their residential buildings. This is the final stage of fulfillment of legal requirements for lawful existence of these buildings.

Below are some brief information that give you an overview of procedures for final acceptance in the construction sector that readers should learn:

* Understanding of final acceptance

Final acceptance means an administrative procedure in construction of a building which is designed to confirm that the owner and contractor have completed construction of the building after receipt of the construction permit and finish all construction activities by carrying out final inspection of completion of construction of the building. Final acceptance is also deemed as a condition for eligibility for replacement of the pink book which describes changes in the post-construction status of real property.

* Purposes of final acceptance procedures

+ Certify legitimacy of the property built on a land plot.

+ Ensure trustworthiness for the process of transaction with other partners.

* PROCESS:

>>> Firstly, defining conditions for final acceptance of your residential building.

Final acceptance of a residential building is a compulsory procedure required for residential buildings of which submission of the application for the permit for construction is legally binding.    This means that final acceptance procedures are not required for those of which submission of the application for the permit for construction is not legally binding.

* Cases in which final acceptance procedures are not legally binding

Article 89 of the 2014 Law on Construction prescribes:

Works exempted from construction permit include: a) Works involving state secrets, works constructed under emergency orders and works located in the territories of two or more provincial-level administrative units; b) Works of construction investment projects in which investment is decided by the Prime Minister, ministers, heads of ministerial-level agencies or chairpersons of People’s Committees at different levels; c) Makeshift construction works to serve the construction of main works; d) Works constructed in lines outside urban areas which conform to construction master plans approved by competent state agencies or in lines of which the direction has been approved by competent state agencies; dd) Construction works of projects on industrial parks, export processing zones or hi- tech parks with detailed 1:500-scale plans already approved by competent state agencies and construction designs already appraised in accordance with this Law; e) Houses of urban development projects or housing development projects with under 7 stories and a total floor area of under 500 m2 and detailed 1:500-scale plans already approved by competent state agencies; g) Works undergoing repair, renovation or installation of interior equipment which does not alter their force-bearing structure and utilities and affect the environment and safety of these works; h) Works undergoing repair and renovation to alter their external architecture not facing roads in urban centers subject to architecture management requirements; i) Technical infrastructure works in rural areas for which only construction investment economic-technical reports are required and in areas without approved detailed construction plans on rural residential points; k) Construction works in rural areas without approved urban development plans and detailed construction plans; separate houses in rural areas, except separate houses built in conservation zones or historical and cultural relic zones; l) Project owners of works exempted from construction permit prescribed at Points b, d, dd and i of this Clause shall send written notices of the time of construction commencement enclosed with construction design dossiers to local construction management agencies for monitoring and filing.

>>> Defining the building status

A residential building is eligible for final acceptance procedures as referred to in the 2014 Law on Housing if its construction has already been completed. Completion of construction means completion of all construction works and completion of final inspection of that residential building, not just raw construction.

Must-do tasks: cleaning up the construction site, preparing an as-built drawing and making necessary documents available for final inspection.

>>> Preparing as-built documentation: (as stated in the Circular No. 05/2015/TT-BXD)

1) Construction permit. 2) Construction contract between the owner and surveying, design, construction and construction supervisory contractors (if any). 3) Construction surveying report. 4) Shop drawing documents.  5) Assessment report on inspection and document on results of assessment of shop drawing. 6) As-built drawing (needed if there is any variation arising during construction with the shop drawing). 7) Report on test and inspection results (if any). 8) Written agreement, arrangement or endorsement issued by regulatory bodies (if any) on fire safety; elevator safety.

* Submission venue:

- People’s Committee of a rural/urban district: Single-family detached home and other construction works within the territory of the rural/urban district;  

- People’s Committee of a commune: Single-family detached home built at a rural residential area which is described in a construction planning within the territory of a commune.

Upon receipt of application documents, a competent authority sends these documents to a tax authority in order for the owner to fulfill his/her financial obligations. The owner is obliged to complete taxation procedures for civil construction of single-family detached home (unless otherwise excepted), and pay all fees related to final acceptance procedures. The owner then proceeds to turn the receipt of tax and fee payment in the competent authority receiving final acceptance documents and waits until these final acceptance documents are already assessed to complete the final acceptance process. 

* TAXES PAYABLE:

If the owner signs a turnkey contract with a turnkey constructor,

Family and individual-occupied houses erected in the form of detached housing development as prescribed in the Law on housing will be exempt from the registration fee under the provisions of the Decree No. 140/2016/ND-CP. Other taxes that must be paid include:

+ Value-added tax (levied on purchase of building materials): Subject to applicable regulations, with respect to private buildings with building materials purchased at the owner’s expense, tax authorities are not entitled to levy any tax on these raw materials.

+ Income tax (levied on construction remuneration).

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