REGARDING THE 3 NEW REAL ESTATE LAWS: WHAT SHOULD BUSINESSES AND INVESTORS PAY ATTENTION TO?

With the 3 new real estate laws coming into effect, businesses and investors need to pay attention to their business operations, capital mobilization, etc. to avoid violating regulations.

During the afternoon session of the National Real Estate Forum 2024, legal experts provided assessments, recommendations for businesses to apply in the future. 

Specifically, Land Law 2024, Housing Law 2023, and Real Estate Trading Law 2023 are gradually impacting the real estate market, in particular, businesses operating in real estate brokerage, consulting, management, and operation services are being affected.

Lawyer Lê Cao - Managing Partner at FDVN Law Firm, noted that Vietnamese laws typically undergo gradual changes after 10 years due to societal, institutional, and other transformations. Currently, the real estate brokerage industry is facing increasingly stringent regulations and demands for higher levels of professionalism, knowledge, and expertise. 

According to Lawyer Cao, Land Law 2024, Housing Law 2023, and Real Estate Trading Law 2023, which came into effect on August 1, 2024, are having a significant impact on real estate business activities, particularly in the areas of real estate brokerage, consulting, management, and operation in Viet Nam. As a result, the 3 new real estate laws offer significant benefits to businesses, but they also demand a higher level of professionalism.

“Firstly, the business conditions will be improved to contribute to the perfection of the organization and operation of Vietnam's real estate services towards professionalism. Secondly, the rights of certain entities using, owning real estate will be expanded to create a new class of potential customers. Finally, a new system of core real estate products will be established and will emerge in the market in the future," Lawyer Cao said. 

According to him, the new regulations on business conditions will elevate the professionalism of real estate services. These conditions will both enhance the position and role of real estate brokerage, consulting, management and operation services to a new height, but also serve as a basis to compel businesses to adapt, change and be ready to grow larger, become more professional, and contribute greater value to the real estate market's breakthrough.

Simultaneously, the rights of entities using, owning real estate serve as a foundation for creating market demand. How real estate service businesses explore, introduce this supply for them to participate in the market is something to look forward to.

Ultimately, the subdivision of land will be tightened, and instead, social housing, apartments, and even mini-apartments will enter the market as the main players. Grasping this new situation, real estate service businesses will have to envision what needs to be done to transform themselves, improve, and make a breakthrough with what the market has and society needs.

According to Dr. Nguyen Tan Phong - Deputy Director of the Institute of Legal Science and Arbitration, the new laws will also create a "new playground" for businesses and investors. Dr. Phong also mentioned that the Land Law had to be amended twice to keep pace with the real estate market and individual investors need to pay close attention.

He also pointed out the legal, market, financial risks, and the reputation of the investor related to individual investors. These include issues related to business conditions, price fluctuations, real estate bubbles, credit tightening, or illegal construction by investors, delayed handover, etc.

"The impact of real estate business law on addressing risks for individual investors has both positive and negative aspects. On the positive side, it creates a clear and stable legal framework, protects investor rights, and enhances transparency in transactions. On the negative side, it can create some overlapping regulations, complex administrative procedures, and uneven development of real estate projects in some localities," said Dr. Phong.

To address the negative issues, Dr. Phong suggested that parties should honestly declare prices in contracts during transactions, and localities should make the market transparent before transactions. Additionally, businesses and investors must proactively comply with tax obligations, assess the supply and demand situation, and choose appropriate dispute resolution methods.

Similarly, Mr. Tran Dai Nghia, Director of FII Vietnam Consulting and Investment Company, noted that the new policies will remove long-standing obstacles and regulate the real estate market through planning and decentralizing management to localities. In which, the auction method is still the main form of land distribution. In addition, the new laws will tighten the supply of subdivided land and the methods of subdividing land for projects, and strictly manage the real estate market, especially issues related to real estate transactions.

However, Mr. Nghia also advised businesses and investors to pay attention to real estate property rights. Accordingly, property rights are specified and protected in the new law, transactions of real estate property rights are ensured, and real estate has more property rights.

"In particular, the supply of real estate in the next 2025 is very abundant. The reason is the increase in supply at projects that have been unblocked. Along with that, projects conducted under the new law will have stability, and the laws also limit the supply of individual subdivisions to a minimum, limiting the supply of land plots. At the same time, the supply will increase from the recovery of tourism and resort projects," Mr. Tran Dai Nghia forecasted.

----------------------------------------------------------------------------------------------------------------------