VCCI calls for land law draft revision

As the Ministry of Justice is gathering comments on a draft amending the Law on Land, the Vietnam Chamber of Commerce and Industry (VCCI) comments that the draft needs revisions to be legally consistent with the Law on Real Estate Business and Law on Housing.

Under the draft, land users do not comprise foreign individuals. That means the latter are not eligible for land allocation, land lease, land use rights and land use right transfers. Their eligibility for land sublease in industrial parks is also ruled out.

VCCI said such a regulation would be at odds with the Law on Real Estate Business because the law allows foreign individuals to purchase houses in Việt Nam and the sale of a house normally comes with a piece of land.

In the same way, the regulation is legally inconsistent with the Law on Housing since the law grants homeownership to foreign individuals who have received as a gift, purchased or inherited the commercial houses.

VCCI also said the regulation, if passed, would lead to an inconvenient situation in which Vietnamese homebuyers would not be able to receive land use right transfers associated with houses once they purchase the houses from foreign individuals.

Another inconsistency involves the draft regulation is that land users can transfer, lease out, offer as a gift, mortgage and contribute as capital their land use rights, provided they have the land use right certificates. Meanwhile, the requirement of certificates is confined to investors of realty projects who do existing building trading under the laws.

The next legal disparity is that the draft stipulates investors may only sell or lease properties associated with land on the condition that the properties have been legally formed. Meanwhile, the Law on Real Estate Business allows the sale of off-plan buildings, as long as the buildings have land use rights, authority-approved construction dossiers and certificates.

VCCI also said the conditions applicable to land use right transfers in residential and infrastructural construction projects would need revision.

The draft defines conditions on which the land use right transfers go with the transfer of whole infrastructural construction projects. Meanwhile, the Law on Real Estate Business does not regulate such transfers. It only covers conditions on which the transfer of realty projects are possible.

VCCI said the inconsistency would likely cause difficulties for firms to observe the legal documents concurrently. The chamber, thus, called for a draft revision to make the legal documents compatible.