Mini-apartment buyers face ownership concerns

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Nguyen Van Dung, an accountant for an IT company in Hanoi, said he decided to buy a 42-square- metre apartment located in a small-sized apartment building in Lang Street, Dong Da District, three months ago.

The building was constructed by a landlord who divided his land into two pieces; with one part devoted to the mini-apartment block and the other for his own home.

"I've chosen this apartment as it was a quite reasonable VND1 billion ($49,000), and it includes two bedrooms, one living room, a kitchen and a bathroom. For this amount of money, it'd be really hard to find a better one", he said.

Dung said he had been told that five months after moving in this August, he would be given a house ownership certificate.

"It's not vital to have the certificate, as I've got the house sale contract. But, the certificate will prove useful as it means I can offer the apartment as collateral if for example, I need a loan," he said.

Mini apartment block resident Huynh Ngoc Thu, in Cau Giay District, agreed, saying that her neighbour had just re-sold his apartment for more than VND1 billion, double the initial selling price.

"There's no need to have housing ownership certificate," she said.

Thu herself bought the apartment two years ago and had yet to receive the certificate.

Pham Ngoc Hien, official of Thanh Xuan District People's Committee's Urban Management Unit, said no request for permission for the construction of the mini apartment had been sent to the authority and the unit had yet to approve any housing ownership certificates for any mini apartment resident in the district.

Thanh Xuan District is home to a large number of private mini apartment blocks in the city.

According to Hien, investors needed to get permission from the planning and architecture departments before building mini apartments. The apartments must occupy at least two floors in the building, with two or more apartments measuring at least 30 square metres per floor. The blocks must be equipped with fire equipment, meet overall planning considerations and meet other safety criteria in order to obtain ownership certificates.

However, many investors, who were only licensed to build a residential house, had changed their architectural plans and built multi-apartments for sale. In this case, certificates would not be granted, Hien said.

Freelance lawyer Vu Phuong Ha in Hanoi said buyers must ensure that they have the required legal papers such as a sales contract and house use certificate.

"Handwritten contracts are very common in this business, but they have no legal validity. Therefore buyers could be forced to return the apartments to the owners if a conflict occurs," Ha said.

Deputy director of Hanoi's Department of Construction Nguyen Quoc Tuan said that the department had asked the city authority to strengthen controls over mini apartment blocks.

Those who violated the regulations on construction would be fined and more strict punishments needed to be added to give the regulations some teeth, he said.

He affirmed that the ban on this type of housing development was difficult due to increasing demand.

Tuan suggested that buyers must be cautious about the security and legitimacy of the housing purchase before deciding to buy such an apartment, in order to avoid any unpleasant legal complications.

A mini apartment building is defined as a private building with many flats of 30-40 metres. This type of accommodation has proved popular due to their reasonable prices. The apartments were legally recognised following a Government decision last August which stimulates that the owners of houses with at least 30 square metres per floor would be granted housing ownership certificates.