The Law on Housing 2023 (Law No. 65/2023/QH15) of Vietnam, enacted by the National Assembly, introduces several key reforms and updates to the housing sector. The law aims to address current challenges, promote sustainable development, and enhance housing access and quality for all citizens. This article is an overview of the main provisions of the Law on Housing 2023.
Key Objectives
The Law on Housing 2023 focuses on improving housing quality, increasing transparency, and ensuring equitable access to housing. It aims to regulate housing development, protect the rights of homeowners and tenants, and promote efficient and sustainable housing practices.
Housing Development and Construction
Project Approval and Management
Article 6 outlines the requirements for housing project approvals, emphasising the need for comprehensive planning and adherence to urban development regulations. It introduces stricter criteria for project management to ensure that developments meet quality and environmental standards.
Box 1: The current state of Vietnam’s real estate market recovery
At the beginning of 2023, construction work on buildings in Vietnam was slowly winding down as the real estate industry ground to a halt. Hard hats were hung up and cranes ten stories high fell dormant leaving the cement shells of unfinished residential towers standing dark and empty–cold reminders that Vietnam’s real estate market was not in good shape.
This was due to a number of factors but in short, the Evergrande crisis in China in 2022, had led Vietnam to take a long hard look at its own real estate industry, and what it found was not good. The misuse of investor funds, particularly those acquired through the bond market, was rife, and a number of real estate firms were grossly over-leveraged. These revelations then went on to spook investors and consequently, the market took a sizable downturn…
Read more: Vietnam’s Real Estate Market Recovery 2024: Unpacked
Sustainable Development
Article 7 highlights the importance of sustainable development in housing projects. This includes requirements for energy efficiency, environmental impact assessments, and the integration of green technologies. The law aims to promote eco-friendly building practices and reduce the carbon footprint of new developments.
Housing Ownership and Rights
Ownership Regulations
Article 12 defines the regulations regarding housing ownership, including rules for domestic and foreign individuals and entities. It specifies the conditions under which foreigners can own property in Vietnam and outlines the rights and responsibilities of property owners.
Tenant Rights and Protections
Article 15 addresses tenant rights, including provisions for lease agreements, rent control, and eviction procedures. It aims to protect tenants from unfair practices and ensure that rental agreements are transparent and fair.
Real Estate Transactions
Transparency and Disclosure
Article 20 mandates comprehensive disclosure requirements for real estate transactions. This includes the need for clear and accurate information regarding property conditions, ownership, and legal status. The goal is to increase transparency and reduce the risk of fraud in property transactions.
Contractual Obligations
Article 22 provides guidelines for drafting and executing real estate contracts. It ensures that contracts are standardised and include all necessary terms to protect the interests of both buyers and sellers. This is intended to promote fairness and clarity in property transactions.
Box 2: Investing in real estate projects in Vietnam
Investing in real estate projects in Vietnam offers significant opportunities for foreign firms, driven by the country’s economic growth, urbanisation, and rising demand for residential, commercial, and industrial spaces. However, navigating the market requires a thorough understanding of local regulations, investment structures, and cultural nuances.
Read more: Investing in Real Estate Projects in Vietnam for Foreign Firms 2024
Housing Finance and Investment
Financial Regulations
Article 25 regulates housing finance, including mortgage loans and investment mechanisms. It introduces measures to enhance the accessibility and affordability of housing finance, supporting both individual buyers and real estate investors.
Investment in Housing
Article 28 outlines the rules for investment in housing projects, including criteria for foreign investment and public-private partnerships. It aims to attract investment while ensuring that projects adhere to regulatory standards and contribute to housing development goals.
Housing Management and Maintenance
Property Management
Article 30 addresses property management, specifying the roles and responsibilities of property managers and owners. It includes provisions for the maintenance and repair of residential buildings, ensuring that properties are kept in good condition and meet safety standards.
Maintenance Funds
Article 32 introduces requirements for maintenance funds, which must be established for the upkeep of communal areas in multi-unit residential buildings. This ensures that there are sufficient resources for ongoing maintenance and repairs.
Implementation and Enforcement
Regulatory Oversight
Article 35 establishes the framework for regulatory oversight, including the roles of government agencies in monitoring and enforcing housing regulations. It provides for inspections, audits, and penalties for non-compliance.
Dispute Resolution
Article 37 provides mechanisms for resolving disputes related to housing issues, including mediation and arbitration processes. It aims to offer fair and efficient solutions to conflicts between parties involved in housing transactions or management.
Box 3: Starting a real estate business in Vietnam
Starting a real estate business in Vietnam presents many opportunities, as the country’s economic growth and rising incomes are fueling demand for both commercial and residential properties. However, entering the Vietnamese real estate market requires a deep understanding of the country’s business environment, real estate culture, and the regulatory landscape.
Read more: How to Start a Real Estate Business in Vietnam: Ultimate Guide 2024
Impact and Implementation
The Law on Housing 2023 will significantly impact various stakeholders, including developers, property owners, tenants, and investors. Developers must adhere to new project approval and management requirements, while property owners and tenants benefit from enhanced protections and clearer rights.
For investors, the law offers a more transparent and regulated environment for housing finance and development. The focus on sustainable practices and quality standards ensures that new developments are both environmentally friendly and of high quality.
Regulatory bodies will be responsible for enforcing the new provisions and ensuring compliance with the law. This includes overseeing housing projects, managing disputes, and monitoring the implementation of regulations.
Conclusion
In summary, the Law on Housing 2023 represents a comprehensive update to Vietnam’s housing regulations. It aims to create a more transparent, equitable, and sustainable housing sector by introducing stringent standards for development, ownership, and management.
Of note, this law also often functions in concert with the Law on Real Estate Businesses and the Land Law.
Vietnam’s regulatory environment, however, is dynamic and can change quickly. With this in mind, to keep abreast of changes to said regulations, foreign firms operating in Vietnam should make sure to subscribe to the-shiv.