SỰ CỐ CẠNH CAPITAL SQUARE 3: TRÁCH NHIỆM PHÁP LÝ NÀO CHO CHỦ ĐẦU TƯ? / INCIDENT NEAR CAPITAL SQUARE

The severe subsidence along Nguyen Cong Tru street, together with numerous cracks appearing in residential properties adjacent to Capital Square 3 project (An Hai ward, Da Nang city), has raised a series of legal questions concerning the liability of the project investor, SIH Real Estate Co., Ltd.

While the authorities have ordered the suspension of construction activities at the subsidence site, citizens continue to report property damage, loss of infrastructure safety, determining the investor’s civil, administrative and criminal liability has become essential to ensure fairness, transparency and legal order in construction activities.

To clarify these legal issues, a reporter from Cong ly has recorded the analysis provided by Lawyer Phan Duc Huynh (FDVN Partnership Law Firm).

The matter not only be seen as a technical incident, but also raises a legal issue for the investor.

Commenting on the legal liability for the Investor of Capital Square 3 project for the damage caused to nearby residential properties and urban infrastructure, Lawyer Phan Duc Huynh stated: If it is determined that the “sinkhole” on Nguyen Cong Tru street and the series of cracks appearing in the residential properties adjacent to Capital Square 3 project are arose from this project’s construction activities, the investor as well as the construction unit shall bear legal liability including compensation for damage, remedial obligations, and other measures prescribed by law, encompassing civil, administrative, and even criminal liability where serious consequences arise.

According to the provisions of the Civil Code 2015, any organizations or individuals cause damage to another shall be responsible for providing full and prompt compensation, including property damage, remedial cost, and other consequential losses. In addition, the investor must be responsible for remedying subsidence incident and infrastructure damage as its own expense, and must comply with the requirements of competent authorities regarding reporting, cause assessment, remedial plans, prevention of recurrence and ensuring safety for affected residential areas.

Beyond civil liability, the investor may also be subject to administrative penalty and remedial measures pursuant to Article 17 of Decree No. 16/2022/ND-CP on administrative penalties in the construction sector.

If the incident cause serious damages in construction safety, involved individuals shall be considered criminal liability for Violations of construction regulations causing serious consequences according to the Article 298 of the Criminal Code 2015 amended and supplemented in 2017 (for example: causing property damage of 100 million dong or more, causing death, etc.)

Non-waivable legal obligations of rhe investor

Regarding the applicable laws on extra-contractual liability and responsibilities in constructions activitieas for this case, Lawyer Phan Duc Huynh explained: If the incident is determined to have arisen from faults in construction activities that damage residential properties or urban infrastructure, the liability of the investor and the contractor is governed by the Civil Code and construction law.

According to construction principle, Article 174 of the Civil Code 2015 stipulating that: “When constructing a project, the owners and holders of other property-related rights must comply with the law on construction, ensure safety. It may not build beyond the height and distance specified by the law on construction and infringes the legitimate rights and interests of owners of adjoining and surrounding immovable properties”.

Article 605 of the Civil Code 2015 regulates on compensation for damages caused by houses and other construction works or buildings: “An owner or a possessor of a house or another construction work, or a person to which the owner has assigned the management or use thereof, must compensate for damage if such house or construction causes damage to another person.

If the executor of the house or construction work is partly fault that such house or construction work causes damage, he/she must jointly compensate for such damage”.

The entity with compensation for damage responsibilities shall be the owner/possessor/person assigned the management of construction work. If the damage arises during the construction, the construction worker who is at fault shall bear joint liability for compensation.

Article 584 of the Civil Code 2015 regulates that organizations/individuals causing damage arising from their own activities must compensate. The compensation shall be carried out based on the principles of full and prompt compensation for actual damage and parties may agree on the amount of compensation, on the form of compensation. 

For construction activities, Aritcle 111 of the Construction Law 2014 states clearly that the investor and the contractor must ensure safety for underground facilities and adjacent works; if the incident arises, they must promptly take measure and compensate.

Simultaneously, Decree No. 06/2021/ND-CP, Article provides provision on parties’ liability when the construction incident causes damage to the surrounding areas. If there is any violation of safety regulations, relevant entities shall be subject to penalties according to Decree No. 16/2022/ND-CP.

Therefore, current law imposes a direct obligation on the investor and the contractor to prevent risk and to provide full compensative when damage arises.

What should citizen do to protect their rights and interests when the cause remains undetermined?

In many other projects, delays in determining the cause place citizens at a disadvantage: damage continues to worsen while they have no basis for claims, and the investor often avoid responsibility until an official assessment is issued.

In recent, Da Nang Department of Construction has only released a conclusion regarding the cause of subsidence incident on Nguyen Cong Tru street. The cause of cracks appearing in residential houses near the Project has not yet been determined by the competent authorities.

In this situation, according to Lawyer Phan Duc Huynh, citizens need to proactively and promptly document the current condition by taking photos and videos, and request that the People’s Committee of An Hai ward, and the local police record the damage in an official report or, prepare a notarized record to serve as evidence.

At the same time, citizens should send a written request to the investor, asking them to inspect, take temporary safety measures and commit to compensation once a technical conclusion is issued.

In parallel, citizens should also request the City People’s Committee and the Department of Construction to conduct inspections, monitoring and technical assessment to determine the cause of incident.

On the basis of the damage dossier and the expert assessment, if the cause of the cracks is from construction activities’s fault of the Project, affected citizens may submit a compensation request to the investor in accordance with the law.

If the investor refuses to cooperate or if construction activities continue to create unsafe conditions, citizens may report construction violation to the competent authorities or file a lawsuit in court to request compensation for damages.