Things that you need to know before entering into a real property sale contract

Sale and purchase of real property is defined as a high-value transaction that poses a number of potential risks, especially to the buyer. This, however, does not mean that the seller is free from risks. Let’s remember the previous case in which a house was sold at the price of VND 58 billion to the seller who then resold it at the price of VND 28 billion and earned the profit of more than VND 10 billion.   

Since the buyer is usually exposed to a lot of risks, this article will focus on provide necessary things of a real property sale contract that the buyer needs to know:

The real property sale contract is a written document on transaction that is of legal importance to establish the buyer's right of ownership of residential real property, and may vary in terms of its representation of contractual terms and conditions, depending on the type of residential real property.

With respect to existing townhouses

- The right of ownership has been recognized on the Certificate of Ownership.

- The real property sale contract must be made at the Notary Office and us usually prepared by using a general sample.

Depending on the characteristics of a real estate transaction, the following information should be added:
+ Property conditions.
+ Buyer.
+ Payment, etc.
+ And other terms and conditions regarding particular features of this transaction.
Signing a contract in front of the Notary Office will make that contract more legally binding, minimize risks and any dispute that may arise during the contract term.

Note: 

A real property sale contract should exactly specify the amount that may be paid through bank money transfer services or paid in cash. (In this point, there are a number of cases in which the seller and the buyer agree on the contract value which is less than the actual payment amount in order to limit the tax. However, this turns out to be a risk to the buyer in case of dispute when the court will rely on the contract to resolve such dispute. 

+ Right of contract termination in case of failure to obtain registration of change of the owner's name. 

With respect to dwellings as part of a housing development project

- If a house is bought from an investor, is available and legalized by a Certificate, transaction of it shall be performed like transaction of townhouses mentioned above.

- With respect to houses to be formed in the future that belong to a housing development project:

+ Transactional requirements must be fully satisfied.

+ Bank guarantee must be obtained.

+ Real property sale contract must be registered with the Department of Industry and Trade or the Vietnam Competition Authority.

+ Deadline for transfer of purchased property must be specified

+ Payment schedule must be identified

+ Violation of parties and the investor’s termination of the contract in case of the buyer’s late payment must be clarified.  

- With respect to houses to be formed in the future that belong to a transferred housing development project:

+ Sale contract and written document evidencing transfer must be made at the Notary Office.  

+ The buyer will continue to implement rights and obligations of the former buyer which have been recorded in the real property sale contract.

Note: As a transferee of the contract from the former buyer, he cannot revise or supplement this contract, but may read its contents and consider whether or not contractual terms and conditions are relevant before deciding to agree on such transfer.  

Reference source: Attorney Tran Duc Phuong.

Reading in Vietnamese: Những điều cần lưu ý trong hợp đồng mua bán nhà