Vietnam Accelerates Real Estate Law Reform to Boost Stagnant Market

On July 31, the Ministry of Justice of Vietnam organized a conference in Ho Chi Minh City themed "Resolving Legal Bottlenecks for Businesses and Individual Business Households in Real Estate Business." This initiative is crucial for enhancing the transparency and efficiency of the country's real estate market and promoting economic growth. The conference facilitated discussions on the draft revised Real Estate Business Law, with participation from notaries, representatives of relevant industry associations, and experts. The objective is to establish a modern legal framework aligned with practical realities, remove legal barriers, and revitalize the real estate market through transparency and openness. It is expected to contribute to the government's target of achieving "double-digit" economic growth. Ms. Lê Thị Hoàng Thanh, Deputy Director of the Department of Civil and Economic Legislation, stated that while the 2023 Real Estate Business Law provided a significant legal framework, many provisions have revealed inadequacies in light of new development demands, particularly with the implementation of a two-tier local government model, increased decentralization of power, and digital transformation. Therefore, timely revisions are necessary to adapt to the new context. The primary goals of the revision are to build a transparent and stable investment and business environment, reduce compliance costs, and ensure consistency between the Real Estate Business Law and related laws such as the Land Law and Housing Law. The revised draft is expected to be more streamlined, focusing on resolving practical difficulties, reforming business conditions and administrative procedures, decentralizing power appropriately for the two-tier local government model, and introducing new mechanisms to enhance state management and market regulation. Real estate experts and lawyers have lauded the draft revision's direction, which inherits suitable provisions from the 2023 law while introducing new mechanisms to increase market transparency, accelerate administrative reforms, decentralize power, and promote digital transformation in the real estate sector. Mr. Lê Hoàng Châu, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), proposed expanding the scope of regulation for new real estate business models, perfecting electronic transaction regulations, adding management mechanisms for individual real estate businesses, and establishing a database and identification codes for brokers to enhance market transparency and professionalism. HoREA also suggested adjusting deposit regulations to harmonize interests among the state, businesses, and customers, and improving project transfer mechanisms to allow transferees to inherit the rights and obligations of the investor, including financial obligations, rather than treating it as an absolute barrier to transactions. Furthermore, HoREA proposed studying mechanisms to allow foreigners to purchase or rent-to-own apartments in resort tourism projects within appropriate limits, believing this solution would attract international investment, enhance Vietnam's real estate market competitiveness, and provide further impetus for economic growth. Lawyer Phạm Thị Thu Trang from the Ho Chi Minh City Bar Association pointed out that current difficulties stem not from a lack of legal provisions but primarily from overlaps between laws related to real estate business, such as the Land Law, Investment Law, Construction Law, and Housing Law. This overlap leads to prolonged project implementation times and increased investment costs. She called for focusing on resolving three major "bottlenecks" hindering real estate investment and business: project investment and implementation procedures; land access and use; and regulations related to project transfers. She recommended that draft laws be implemented in a synchronized manner across related legal acts and continue to cut administrative procedures, enhance market transparency, and reduce compliance costs for businesses. These contributions from experts, industry associations, and the business community will be compiled by the Department of Civil and Economic Legislation and further studied in coordination with the lead drafting agencies to finalize the draft revised Real Estate Business Law and related legal policies. Source: Nhan Dan