Solutions against common legal risks to real estate purchases (Part I)
Money
may not buy real estate. Legal risks to the purchase of real estate abound
despite the abundance of opportunities to buy houses in the currently
progressive market economy. Such risks not only hinder real estate purchases
but also exhaust buyers’ finances.
I,
therefore, post the “solutions against common legal risks to the purchase of
real estate” and expect experienced legal specialists to discuss and share
their experience in handling various circumstances for everyone to avoid such
risks.
1.
Seller of a property takes deposits from several buyers
At
this vital stage of a real estate purchase process, risks are inevitable. A
seller in dire need of money willfully puts his property for sale at a moderate
price and takes deposits from every prospective buyer.
Solution:
The sole measure in this
circumstance, for protecting a buyer’s rights, may be a deposit contract with
the seller, which is notarized to validate its legality.
For
reducing expenses and as being afraid of involving a notary office, seller and
buyer often acknowledge the deposit on a handwritten piece of paper, making it
difficult to petition a court for settling a dispute or fraud.
2.
Seller binds buyer to infeasible conditions after the deposit is made
For
example, the buyer is given zero cooperation in completing the formalities for
land use right certification or full payment is demanded or the process of
notarization for transfer of the certificate of land use right (and house
ownership) is on 1-day or 2-day delay.
Precaution: Buyer must be in senses when transacting a property
purchase. A deposit contract, as stated above, should come into existence upon
the making of the deposit. Moreover, the process of notarization and payments
should proceed in a bank to uphold safety.
Spend
a little more on the safety of transactions.
3.
Documents shown upon the sale of a property are false
It
is most common that a non-owning person abuses the property owner's confidence
or intimacy to borrow and forge real estate documents. Identity papers are then
fabricated to transact the sale of the property.
The
owner is usually not aware or may be conscious of such event but colludes with
the person transacting the sale to swindle a buyer out of money.
In
another situation, the owner transacts the sale with the unknowingly false
documents in his possession. The authentic documents are mortgaged in a bank.
Precaution: An
optimal solution against this circumstance, which is a nuisance to the notaries
certifying property sale contracts, is not yet available. Thus, I look forward
to the opinions of experienced participants in the forum of Dan Luat.
* Legal Documents:
- Circular No. 21/2016/TT-BXD guilding the implementation of a number of articles of the Government’s Decree No. 101/2015/ND-CP on renovation and re-construction of apartment buildings
- Decree of Government No. 99/2015/ND-CP on guidelines for The Law on Housing
- Circular No. 19/2016/TT-BXD guidelines for implementation of some content of the Law on housing and the Government's Decree No. 99/2015/ND-CP
- Joint Circular No. 09/2016/TTLT-BTP-BTNMT instructions on registration of mortgaging of land use rights, properties on land
- Circular No. 02/2016/TT-BXD regulation on management and use of apartment buildings
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