Vietnam Considers Time Limits on Apartment Ownership as Buildings Age

The Ministry of Construction has proposed a draft amendment to the Housing Law (Luật Nhà ở sửa đổi) that would terminate ownership rights for apartments and other areas within apartment buildings once their operational lifespan expires or if the building is demolished. This marks a significant shift from current regulations. Under the draft, the ownership period for an apartment will be determined by the building's lifespan. Provincial People's Committees will be responsible for inspecting and assessing the quality of apartment buildings when they reach their expiry date or, even before expiry, if they are damaged, pose a risk of collapse, or are unsafe for occupants. If an extension of use is not granted, the apartment building will be subject to demolition. Following this demolition process, ownership rights to apartments and associated land areas will cease. However, in such cases, apartment owners will have the right to continue using the land area by contributing funds for the reconstruction of a new apartment building. The contribution amount will be calculated based on the ratio of the apartment's usable area to the construction investment cost per square meter of floor space at the time of demolition. If owners do not wish to contribute funds for reconstruction, they will hand over the land to the State, which will then assign it to a developer for the reconstruction project. They will receive compensation equivalent to the value of their land use rights, proportionate to their apartment's usable area. Currently, the 2023 Housing Law does not stipulate a specific ownership term for apartments, only defining the building's usage period based on design documents and actual quality inspections. However, property certificates often list two types of apartment usage terms: perpetual and limited. Perpetual ownership is typically associated with apartments built on residential land, granting stable, long-term land use rights. Limited-term apartments (50-70 years) are often built on land designated for commercial services, and buyers are entitled to use them for the remaining duration of the project from the date the State allocated the land to the developer. The drafting agency explained that apartment buildings are a type of construction with a limited lifespan, as they deteriorate over time. Introducing regulations on apartment ownership aims to gradually change public perception that apartments are 'permanent' or 'eternal' assets. For renovation or reconstruction, the Ministry of Construction proposes that the apartment building's usage period be determined by the approved design documents, calculated from the date of the building's completion and acceptance for use. The competent authorities must clearly state the building's usage period during the design document review. The draft also adds provisions for mandatory demolition of apartment buildings. Beyond the expiry of their usage period, this includes buildings suffering severe damage from fires, natural disasters, significant deterioration, or posing a risk of collapse, rendering them unsafe. To ensure residents' rights, the Ministry of Construction proposes a mechanism for on-site resettlement in areas approved for continued apartment building reconstruction. If reconstruction plans are not approved, apartment owners will be compensated financially or arranged for resettlement in the same commune, ward, or a neighboring area. According to National Technical Regulation on Classification and Grading of Construction Works (Circular 05/2022), the lifespan of a construction is determined by four levels. After the expiry of this period, relevant authorities will re-inspect the quality and extend it if safety is assured.