Although a draft revised Law on Land proposed by the Ministry of Natural Resources and Environment will not include condotels in its remit, experts still suggest the issue needs to be addressed to ensure clarity on differences in terms of business and regular accommodation.
The draft amended land law will be released for public feedback in January 2023 after being submitted to the National Assembly for consultation. The second submission will be at the fifth meeting in May next year, and it will be finally considered and approved at the sixth meeting in October 2023 if there are no further issues.
|According to the Ministry of Construction, Vietnam currently has about 83,000 condotel units nationwide |
According to Le Hoang Chau, chairman of Ho Chi Minh City Real Estate Association, legislation such as the Law on Land and Law on Real Estate Business do not have a provision for constructing residences that operate as businesses.
“Therefore, it is necessary to add regulations on the type of real estate that can be used as a business with the added function of being a residence in any draft revision,” Chau said. “This would ensure generality and coverage in law.”
For construction works with accommodation functions such as condotels, officetels, serviced apartments, and hotel apartments located in independent buildings, or independent houses built on commercial and service land, there is currently not enough legality to regulate properly.
Trinh Hoai Duc, director of Ho Chi Minh City realtor RealPlus added, “The quick completion of legal regulations related to these types of products will contribute to promoting more market demand from the perspective of investors, as well as customers buying condotels.”
As for changing the type of ownership, Duc said it would depend on the master plan of the tourism real estate industry, as well as the urban development planning of each locality in the long term.
Despite the pleas, at a consultation workshop on the draft Law on Land held in Hanoi in August, Minister of Natural Resources and Environment Tran Hong Ha said that condotels, officetels, and tourism property would not be included in an amendment to the law.
“The state has prescribed that commercial and service land have a lifespan of 50 years and is issued a pink book according to that time. Any locality that wants to transfer commercial and service land to residential land must be reconsidered. We should not implement the wrong things,” Ha said.
According to the Ministry of Construction, Vietnam currently has about 83,000 condotel units nationwide. The government has the policy to grant land use rights for this type of real estate, but there are very few condotel apartments that have a red book.
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The condotel market has faced a gloomy period due to low absorption rate while inventory has been on the rise, experts said.
| ||Hanoi tightens management over condotels, officetels, resort villas |
The Hanoi People's Committee recently issued a written request to tighten the management of the investment, construction and business of condotels, tourist villas and officetels.
| ||Condotel developing slows amid restrictions |
Recent decisions to impose stricter management on condotels and officetels are pushing developers and investors into a miserable situation, as the whole real estate market reels from the pandemic impacts.
| ||Taking the right approach to the condotel legislation conundrum |
The absence of legislation and clarity regarding condotel ownership has been a significant obstacle for property developers and the hospitality sector. In the last 7-10 years, there was a significant amount of investment in condotel products, mainly in resort areas alongside villas and hotels. These multi-segment developments have often been funded by the presale of villas and condotel units.
By Bich Ngoc