Solutions against common legal risks to real estate purchases (Part II)

4. A house on sale is under mortgage at a bank

An owner’s sale of his property that is being mortgaged to a bank results in a variety of legal risks to the buyer.

Precaution: Solicit information from the banks and the Department of Construction that manages the location of the property on sale to verify its mortgage status.

For a real estate project or an apartment project, verify the banks' guarantee for such project.

5. Buyer fulfills the deposit and punctual payments for a project that is then suspended

Several projects, though suspended, linger on in years. The main investor of such a project has taken buyers' deposits and punctual payments but fails to continue the project because the finances sourced from buyers do not suffice or the main investor violates the law and faces criminal prosecution.

Precaution: Learn about the main investor of a real estate project before making a purchase, and choose those prestigious in the real estate market.

6. Papers are not issued in full despite the fulfillment of formalities and payments

It is most common that a buyer acquires his residential property from a real estate project and fulfills all payments but has not received all papers on such property. Such circumstance perturbs buyers, particularly those who desire to sell their properties due to financial hardship.

Solution:  The property purchase contract should include thoroughly binding terms regarding this situation.

7. Properties purchased and fully documented are not salable

Such situation is mentioned on the news 1 or 2 weeks ago. The said properties include social housing and the houses purchased with a loan from the 30,000-billion-dong subsidy program. Buyers desire to sell the properties for which stage-based payments have been made due to their financial incapacity (e.g. preferential loan interest rate has expired).

It is regulated that social housing is only salable after 05 years from the date that its purchase completes, which poses a dilemma for many people.

Precaution: Read the legislation on social house and houses purchased with a state-subsidized loan to learn about the conditions of subsidy, level of subsidy, interest rate, duration of resale blockade, dispute resolution methods, etc.

Those are the common circumstances and personal opinion. I therefore hope that you contribute opinions for people to buy properties safely.

* Legal Documents:

- Law No. 65/2014/QH13 dated November 25, 2014, on housing

- Decree of Government No. 101/2015/ND-CP on renovation and re-construction of apartment buildings

- 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

- Circular No. 26/2015/TT-NHNN guidelines for procedures and formalities for mortgaging and releasing mortgage of housing construction projects and off-the-plan residences

- 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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