PAYMENT FOR PURCHASE, LEASE-PURCHASE OF FUTURE HOUSING AND CONSTRUCTION PROJECTS

Legal situation:

I am considering investing in a real estate project and I need to understand the relevant legal regulations. According to the Real Estate Trading Law 2023, how is payment for the purchase or lease-purchase of future housing and construction projects  regulated?

FDVN’s opinion:

As stipulated in Article 25 of the Real Estate Business Law 2023, effective from August 1, 2024, payment for the purchase and lease-purchase of future housing and construction projects is regulated as follows:

- For purchases of housing, construction projects, and construction floor areas in future buildings, payments are made in multiple installments as follows: 

• The first installment shall not exceed 30% of the contract value, including any deposit.
• Subsequent payments must align with the construction progress, with a cumulative payment cap of 70% of the contract value before the handover of the property or construction area. For foreign-invested economic organizations as stipulated in Clause 4, Article 10 of the 2023 Real Estate Business Law, the total payment shall not exceed 50% of the contract value.

- For lease-purchase of future housing, construction projects, and construction floor areas, payments are also made in multiple installments as follows: 

• The first installment shall not exceed 30% of the contract value, including any deposit;
• Subsequent payments must align with the construction progress until the handover of the house, construction work, or floor area in the construction work to the lease-purchaser. However, the total amount of advance payments to the lessor must not exceed 50% of the contract value for the lease-purchase of the house, construction work, or floor area in the construction work.
• The remaining amount shall be calculated as rent to be paid to the lessor over a specific term, as agreed upon in the contract.

Note: If the buyer or lease-purchaser has not yet obtained a certificate of land use rights and ownership of assets attached to the land, in accordance with land law regulations, the seller or lessor is not permitted to collect more than 95% of the contract value. The remaining contract value shall be paid once the competent state authority issues the land use rights and ownership certificate for the buyer or lease-purchaser.

According to Lawyer Pham Thao - FDVN Law Firm - Danang Bar Association

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