When is the land plot on the ground project sold?

I intend to buy a land plot on the real estate ground project for leasing. However, this Project has not had acess road and power. The investor is dividing the ground for selling the land plots on it. I would like to know if it is lawful for the investor to divide and sell land plots on the ground project and the conditions to sell the land plots on the ground project.

Thank you for your advice.

FDVN’s Opinions:

A real estate put into business must meet the general conditions specified in Article 188 of Law on Land 2013, Article 9 of Law on Real estate trading 2014: There is a certificate of land use right and have no dispute over land use rights; The land use right is not distrained to secure judgment enforcement; The land use period has not been expired.

Apart from the aforementioned conditions, Investors in investment projects on construction and business of houses for sale or sale in combination with lease may transfer land use rights in the form of subdivision or ground sale when meeting the following conditions:

* Article 194 Law on land 2013 stipulates the conditions for transferring land use rights in implementation of investment projects on construction of and trading in houses; investment projects on construction of infrastructure for transfer of lease:

“1. The transfer of land use rights in investment projects on construction of and trading in houses must be conducted in accordance with the following provisions:

a/ The provincial-level People’s Committee may, based on the Government’s regulations on conditions and types of urban centers, permit investors of projects on construction of and trading in houses to transfer land use rights in the form of dividing land parcels upon completion of the infrastructure construction and fulfillment of financial obligations related to land;”

* Article 41 Decree No. 43/2014/NĐ-CP, amended and supplemented by Clause 17, Article 1 of Decree No. 148/2020/NĐ-CP stipulates the conditions for transfer of land use rights under investment projects on construction of houses for sale or for combined sale and lease:

“1. In order to obtain permission for transfer or disposition of land use rights in the form of division of land into lots, sale of these divided lots, investment projects on construction of residential houses for sale or for combined sale and lease must satisfy the following conditions:

a) Project investors must complete the construction of infrastructure facilities, including service, technical and social infrastructure facilities under the approved 1:500-ratio detailed master plans, ensuring the interconnection to the common infrastructure systems of the areas before transferring land use rights to people to build residential houses at their discretion; and ensuring essential utilities and amenities, such as electricity, water supply, water drainage and waste collection, must be provided;

b) Project investors shall fulfill all of their financial obligations related to the projects’ land, such as land use levies, fees or land rents; land-related taxes, charges and fees (if any);

c) The projects completed for such transactions must be located in areas or cities where land use rights may be transferred or disposed of in the form of division of land into lots and sale of these divided lots as provided in clause 2 of this Article;

d) They must meet other conditions prescribed in laws on urban zoning, construction and development, real estate and residential house business activities.

2. Investors of projects on construction of residential houses for sale or for combined sale and lease may transfer land use rights in the form of division of land into lots and sale of these divided lots in the areas outside the special or grade-I centrally-affiliated cities; areas with strict requirements concerning landscape architecture, downtown areas, and proximities of facilities that serve as prominent architectural points of cities; frontages of regional- or higher-level roads and main landscape roads in cities.

3. Provincial People's Committees shall be responsible for publicly announcing the areas where the housing construction and trading projects implemented for sale or for combined sale and lease are permitted for transfer in the form of division of land into lots and sale of these divided lots before allowing investment projects to be executed.

4. Family households and individuals that receive transferred land use rights to build residential houses of their own accord must build residential houses in accordance with the construction permits, and comply with the approved detailed master plans and urban designs.”

Therefore, a residential real estate project for living or selling which is combined with lease may transfer land use rights in the form of subdivision or ground sale when the investment in infrastructure construction including service works, technical and social infrastructure works under the approved 1/500 detailed construction planning has been completed; the interconnection to the common infrastructure systems of the areas before transferring land use rights to people to build residential houses at their discretion and essential utilities and amenities, such as electricity, water supply, water drainage and waste collection, must be ensured and provided; Project investors shall fulfill all of their financial obligations related to the projects’ land, such as land use levies, fees or land rents; land-related taxes, charges and fees (if any); Investors of projects on construction of residential houses for sale or for combined sale and lease may transfer land use rights in the form of division of land into lots and sale of these divided lots in the areas outside the special or grade-I centrally-affiliated cities; areas with strict requirements concerning landscape architecture, downtown areas, and proximities of facilities that serve as prominent architectural points of cities; frontages of regional- or higher-level roads and main landscape roads in cities. In particular, the Investor is only allowed to transfer the land use right in the form of subdivision and sale of the plot after obtaining the approval of the Provincial People's Committee, allowing the subdivision and sale of the plot.

Note for recipients of land transfer: Households and individuals that receive land use rights transfer to build houses by themselves must build houses per construction permits and comply with the cost planning. approved urban design and details.

According to the information you provided, the Investor has divided plots and sold when the Project has not completed the investment in infrastructure construction, has not yet ensured the provision of essential services including electricity supply, water supply, drainage, waste collection, and especially have not been allowed by the Provincial People's Committee. Based on the above regulations, the Investor has not met the conditions to sell the land plot project.

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