Home-buyers’ spat with TSQ underlines a growing trend

Vu Thanh Cong, an owner of an apartment in TSQ’s Euroland apartment building belonging to the European-Vietnamese Overseas Village in Hanoi’s Ha Dong district, said: “In the recent document TSQ  just sent us to respond to our claims, it did not admit any mistake and said that if we did not accept the explanations, it will be willing to go to court.”

The story started last month when nearly 100 home-buyers sent a document to local authorities and media, accusing the developers of delaying the project, committing legal violations regarding quoting apartment prices in US dollars and forcing them to pay a deposit of 90 per cent of the apartment’s total value when the apartments were not finished.

To Thanh Hoa, a home buyer said that under the Housing Law developers could only collect 70 per cent of an apartment’s value before if the apartment was not finished. The remainder must be collected when the apartment is finished and transferred to the customers.

Current foreign exchange management regulation stated that business conducted in Vietnam must be quoted in Vietnamese dong. If the price was quoted in US dollars the contracts would be  invalid, said Hoa.

In fact, customers have to pay an additional sum of VND 80 million-100 million ($3,865-$4,830) per unit due to exchange rate changes in recent times.

Customers are also angry the developer applied a 24 per cent of annual interest rate for customers who deferred payments.

However, TSQ is standing firm.

“Apartment prices were calculated in dong and we use the VND/USD exchange rate as a reference for each payment. In contracts signed with us, customers also know it does not violate the current laws,” a representative from TSQ said.

TSQ said even it had collected 90 per cent of a Euroland apartment’s total value, the move was still in line with current laws because the apartment had not been decorated and furnished and therefore the money customers paid was just equal to nearly 70 per cent of a completed apartment’s total value.

TSQ also confirmed that the company had to borrow money from banks with annual interest rates of 22-24 per cent, so the interest rates it applied to customer who deferred payment were reasonable.

However, home-buyer Nguyen Thi Nhung said: “We are imposed a high fine if we defers payments. Meanwhile, TSQ will hand over the apartments to the customers behind the deadline set up in the apartment purchasing contracts and they are not fined. At least TSQ has to admit that they delayed the project and repay us the fine.”

However, TSQ said it would still deliver the apartments to customers in line with the deadline. Although the apartment purchasing contract states that the company would hand over the apartments before June 30, 2011, a clause in the contract provides that the handover could be six months earlier or later than the deadline.