Vietnam Considers Stricter Regulations on Unplanned Land Subdivision and Sales

The Ho Chi Minh City Real Estate Association (HoREA) has proposed integrating the subdivision and sale of land outside official real estate development projects into the Law on Real Estate Business (amended). This move aims to close legal loopholes and curb illicit profiteering that has led to disputes and fraud. According to HoREA, current regulations primarily govern real estate transactions through investment projects. However, the practice of individuals or organizations subdividing and selling land outside these projects is widespread but inadequately regulated, creating a legal vacuum. The association argues that this has been a significant factor contributing to numerous fraudulent activities and illegal capital mobilization in the market. HoREA believes that expanding the law's scope to cover these off-project land transactions will enhance market transparency and protect buyers' rights. This would enable authorities to better control subdivision and sale transactions, limiting false advertising, the sale of land not meeting legal conditions, or the establishment of "ghost projects" for capital raising. While some real estate experts agree on the necessity of enhanced regulation, they caution against overly restricting individuals' legal rights to transfer their land. Vo Hong Thang, Deputy General Director of DKRA Group, suggested that the focus should be on commercial real estate activities rather than limiting legitimate land transfers by individuals. He noted that existing laws already have stringent requirements for land subdivision, including minimum areas, infrastructure, and planning, before transfer is permitted. Thang emphasized that stricter control over subdivision conditions, as they currently stand, is the key to preventing widespread, unmanaged land subdivision. If new regulations are introduced, they should prioritize legal information disclosure, control over capital mobilization, and clear seller responsibilities. Furthermore, a clear distinction must be drawn between ordinary civil transactions and professional real estate business activities. An overly broad or ambiguous regulatory scope could impose unnecessary administrative procedures and compliance costs on individuals' land transfers. Source: VnExpress