Vietnam Significantly Increases Fines for Misusing Apartments

The Vietnamese government has issued Decree 339, which amends regulations on administrative sanctions in the construction, housing development, and real estate business sectors, effective from August 26. A significant change introduced by the new decree is the substantial increase in fines for using apartments for purposes other than residential use. The penalty for such violations now ranges from VND100 million to VND130 million (approximately $5,100 USD), a more than threefold increase from the previous range of VND20 million to VND40 million (approximately $800 to $1,600 USD), with exceptions for rentals intended for residential purposes. This higher penalty bracket of VND100-130 million also applies to actions such as intentionally causing water leakage or dampness in apartments, and unauthorized conversion of the function or purpose of shared ownership areas. The fine is also imposed on individuals who fail to manage or operate multi-story, multi-unit residential buildings (mini-apartments) or use individual houses for businesses involving flammable materials. Furthermore, the decree introduces a new fine of VND20-30 million (approximately $800 to $1,200 USD) for individuals who fail to contribute to the maintenance fund for the common areas of apartment buildings. Violations involving encroachment on common spaces or areas belonging to other owners can result in fines of VND60-80 million (approximately $2,400 to $3,200 USD). This penalty also covers the misuse of common areas or service areas within mixed-use apartment buildings. For apartment building management boards, new regulations require members to possess certificates of completion for specialized training courses in management. Failure to comply will lead to fines of VND5-10 million (approximately $200 to $400 USD). Mismanagement or misuse of maintenance funds, unauthorized conversion of common areas, or failure to disclose the use of maintenance funds will incur fines of VND50-60 million (approximately $2,000 to $2,400 USD). This applies also to actions that deviate from the financial collection and expenditure regulations approved by the apartment building's residents' conference. These increased penalties are seen as a measure to address the growing issue of illegal commercial conversions of apartments, particularly in major cities like Ho Chi Minh City and Hanoi, where housing shortages and market speculation are prevalent. The government aims to ensure the proper utilization of housing resources and maintain residential living standards.