10 POINTS TO CONSIDER WHEN BUYING RAW LAND USED FOR INVESTMENT PROJECTS

High profit compared to the initial investment, preferential treatment and discounts such as "sweepstakes, getting gold for buying land, promises the rate of return..." from investors, brokerage companies are the reasons why many buyers are willing to accept risks when buying raw land used for investment projects. In addition, crowd psychology is also one of the reasons why investors rush to make purchase deposits without spending time to actually do research on their investment projects as well as the legal risks. Consequently, they easily get involved in "ghost projects", being ripped off all their assets by scammers.

To avoid those risks, investors should consider the following 10 points when buying raw land used for investment projects:

First, what is raw land used in investment projects?

“Raw land used for investment projects” is a common name used by people to distinguish it from ordinary land lots. This phrase refers to the land plots located within the areas for investment projects, which have the impact and infrastructure investment of the investors and are planned in a clear and transparent way. The investors are responsible for the compensation involved and licenses related to that land.

Although this is a commonly used phrase, there is currently no provision in Viet Nam law that defines land used for investment projects. However, based on other relevant provisions, it can be understood that “land used for investment projects” is the land fund that is allocated or leased by the Government to investors to carry out investment projects and build infrastructure. For projects on construction of houses for sale or a combination of sale and lease, the land use rights are transferred by dividing the land into plots selling them. This is a business form in which the investor of a house constructing project can transfer the land use rights to customers so that they can build their own houses. Households and individuals who receive the land use rights must build houses in compliance with the construction permits, the detailed planning and urban design approved.

Provincial-level People's Committees are responsible for public announcement of areas in projects on construction of houses for sale or a combination of sale and lease, where the land is divided and sold to transfer land use rights before organizing the implementation of investment projects.

Second, look for competent and reputable investors

The investor is one of the most important factors affecting the success of a real estate project. The investor is the person who implements the investment project, so researching and learning about the investors is an essential step before buying land used for investment projects.

Before making the decision to buy land used for investment projects, the buyer can ask the investor or the broker to provide the investor's business registration license to check and verify business information. The business license of the investor should pay attention to the business field that needs to have the function of building and investing in real estate projects to be legal.

In addition, it is possible to assess investors’ capability based on factors such as their previous successful projects, media reputation, financial competency through channels such as google, financial statements of enterprises. ... or the satisfaction level of people living in the projects of that investor.

By doing research on the investors, the buyer will be able to assess the reputation of the investor, the feasibility of the project as well as determine the party who is authorized to sell and sign contracts

Third, look for projects that meet the conditions to be divided into lots for sale, which has full legal documents required by the law and satisfies other factors (feng shui, environment, geology ...)

A real estate put into business must first meet the general conditions stated in Article 188 of the Land Law 2013, and Article 9 of the Law on Real Estate Trading 2014: Having a certificate of land use right; being dispute-free; the land use rights are not distrained to secure judgment enforcement; being within the land use term.

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 or lease are stated in Article 194 of the Land Law 2013 as follow:

“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;”

In addition to the conditions mentioned above, according to Clause 17, Article 1 of Decree No. 148/2020/ND-CP amending several Decrees providing guidance for the implementation of the Land Law, investors of investment projects on construction of and trading in houses for sale or for combined sale and lease are permitted to transfer the land use rights in the form of division of land into lots, sale of these divided lots if the following conditions are satisfied:

- 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;

- 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);

- Projects in urban areas or cities may have land use rights transferred in the form of division of land into lots and sale of these lots in accordance with the following regulations: 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.

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

- Obtain the permission from the Provincial-level People's Committees according to the Government's regulations on the conditions for the types of urban area, to transfer the land use rights in the form of division of land into lots and sale of these lots upon completing the infrastructure construction and financial obligations related to the land.

Therefore, to determine if a project is fully legal, investors need to actively ask the investor or the broker to provide the originals of the following documents and information:

(1) The basic legal documents about the project from the investor including: Investment certificate for the project of the investor; decision on land allocation; Written approval in principle; approved construction drawing designs,…;

Learning about this information helps the buyers evaluate and determine the actual investors of the projects and the parties who have the right to sell and sign land purchase contracts with the buyers. In many cases, even though not being investors, some brokerage companies still provide ambiguous information to buyers and sign deposit contracts with them, negotiate with buyers (with terms of deposit penalty, set traps, etc.) in order to illegally obtain property from them, despite the fact that these companies do not provide written authorization or agreement with the actual investors.

(2) Decision on approval of the 1:500-ratio detailed master plan maps by the competent authority for that project. This decision will specify the content of the general planning and zoning planning on the detailed arrangement of all facilities on the land, technical infrastructure, detailed planning on the boundary of each land lot. Accordingly, land buyers are able to know the location of each land lot in this project.

(3) The acceptance certificate on the completion of the infrastructure of the competent authority. The pre-acceptance test of infrastructure including quality, quantity and location is mandatory and must be in accordance with the approved 1/500 detailed master plan, and at the same time must measure, set up landmarks for the project. The pre-acceptance test must be carried out, certified and stamped by the competent authority of the locality where the project is implemented, rather than having private entities to carry out these procedures.

(4) The buyers should directly inspect the land to see the actual state of infrastructure including service facilities, technical infrastructure, social infrastructure according to the approved 1/500 detailed master plan mentioned above; these facilities and infrastructures must ensure the interconnection to the common infrastructure systems of the areas and ensure essential utilities and amenities, such as electricity, water supply, water drainage and waste collection, must be provided.

There are many cases where the project is at one place, but the broker leads the buyer to see the land in another project area in order to deceive the buyer. Therefore, to avoid this situation, buyers must first look at the legal documents and records to see if the conditions are met and then inspect the land directly. When viewing the land, it is necessary to know the address, the location of the land, the map sheet, plot number according to the viewed legal documents and ask the locals or the commune-level People’s Committee where the project land is located to make sure they are not being tricked into buying land in a ghost project.

In addition, directly inspecting the land helps buyers observe and evaluate other factors to choose an ideal plot of land, partly assess the potential and profitability of the land or to see if it satisfies other criteria, such as:

- Factors related to feng shui: Choose land plots located in a good, flat, clear area, without electric poles, trees blocking the front or a road heads directly toward the land... Do not choose a plot of land facing a three-way intersection or a plot of land located at a corner or a curve... Choose a plot of land with a direction suitable for the owner's age and avoid directions that cause negative impacts according to the laws of science and the environment.

- Environmental factors: Select plots of land that were not previously used for prisons, landfills or cemeteries and are currently not near landfills, graveyards, industrial parks... Newly reclaimed land, farmland or farmland is recommended. The land in an area where people have high sense of civic duty, with adequate electricity, water and wide roads for cars to enter, convenient traffic and the way to the land plot is in dispute...

- Geology: Avoid land located on filled ponds, lakes or soft ground, which leads to very expensive ground reinforcement costs.

(5) Receipts for collection of land use levy and land rent; taxes, fees and charges related to land (if any) to prove that the investor has fulfilled the financial obligations related to the land of this project. This is also very important, because this is a very large amount that is decisive for the project and if the financial obligation is not fulfilled to the state, the project is not eligible for transfer. On the other hand, this also helps buyers anticipate and see the risk that the investor is selling the land and can use the money from the sale of the land for other purposes, leading to the inability to pay land use levy to the state or being unable to pay land use fees. financial inability to implement the project. When the investor has completed the financial obligation to the state before the sale, it means that the investor has the financial capacity and reputation to carry out this project.

(5) Receipts for collection of land use levies, rents; taxes, fees and charges related to land (if any) to prove that the investors have fulfilled the financial obligations related to the land of those projects. This is also very important since it’s a large amount of money that is decisive for the project and if the financial obligation is not fulfilled, the project is not eligible for transfer. On the other hand, this also helps the buyer anticipate and foresee the risks that the investor is selling the land and using the money from the sale for other purposes, leading to the inability to pay land use levy to the government or the lack of financial inability to implement the project. The fact that the investor has completed the financial obligations to the government before the sale indicates that the investor has the financial ability and reputation to carry out this project.

(6) Permission in writing of the provincial-level People's Committee allowing the investors of projects on construction of and trading in houses to transfer land use rights in the form of dividing land into lots upon the completion of infrastructure construction and financial obligations related to the land.

(7) Check if the project or the land lots are mortgaged by the investor, being distrained or disputed. There are many cases where the investor is legally qualified to transfer the land use right, but a part of or the whole of the project is disputed, distrained or mortgaged to the bank. Therefore, having known the name of the project, you can first do a preliminary research on the internet, consult the land registration office to make sure that the land plot you buy is not mortgaged, distrained or in dispute (if any).

(8) Look for information about the project through the local land registration office to see if the project is involved in other construction plans. It is not recommended to invest in the land where there are plans for a landfill, industrial park or cemetery nearby.

(9) Ask local people as well as local People's Committee if this is in fact a “ghost project”.

In fact, many investors, although fully aware of these regulations, still establish and publicly make sale transactions even though the project has not yet met the above conditions. And when a dispute occurs, these transactions can be declared invalid due to illegality, the buyer can only receive the paid amount, proving the fault of the parties is often very difficult since most of these sale contract is prepared according to the investor's template, which always includes terms stating that the buyer knew about the project's legal status and voluntarily signed the contract. These terms will be used against the buyer, so that neither party has to compensate the other for damage when the sales contract is declared invalid.

These disputes are in fact, very common. According to the guiding resolutions of the judges' council of the supreme people's court such as Resolution No. 01/2003/NQ-HDTP dated April 16^th, 2003 or Resolution No. 02/2004/NQ-HDTP dated August 10^th, 2004: One of the damages that needs to be considered when declaring the sale and transfer contract of houses and land use rights invalid is the difference in the value of land use rights/houses agreed upon by the parties at the time contract is signed compared to the value at the time of the first instance trial. If the parties cannot agree on the value of the land use rights/houses and the amount of the damage, the Court may request a valuation according to the market price or based on the price list prescribed by a competent authority.

However, proving the actual damage is not an easy work. Because there are many cases where the projects do not meet the required conditions when the sale and transfer contracts are signed, the area is just a vacant lot, the location of real estate products is not fixed and has not been shaped. Consequently, many price appraisal companies would refuse to set the price because the project is not eligible for transfer. There are also many cases where the authorities have not yet made an official decision on land prices in those projects, so the Court has no basis to apply a specific price. These problems will cause a lot of difficulties for the buyers to protect their rights and possibly prolong the litigation proceedings.

Fourth, one of the parties to the land transaction contract must be the investor or a third party legally authorized by the investor.

Nowadays, investors do not directly look for buyers or carry out brokerage works, but often cooperate and sign brokerage contracts with brokerage companies, under which these companies would carry out the introduction, search for buyers, sign contracts for deposit and even land transfer contracts with buyers.

According to Clause 5, Article 13 of the Law on Real Estate Business 2014, an investor is not allowed to authorize any organization participating in investment cooperation, joint venture, association, business cooperation or capital contribution to sign the agreement on real estate sale, transfer or lease purchase. Therefore, for contracts such as Deposit and Reservation Contracts, if signed with another third party, the buyer needs to look for information or contact the investor to ask about the land lots and the authorization; carefully read the terms of the contract, the person signing the contract must be the legal representative or the person authorized by the legal representative of the investor or the legal owner (with a letter of authorization); request the third party to provide the letter of authorization before signing these contracts; carefully review the terms of authorization scope, authorization period to determine whether the authorization is valid.

The purchase and transfer contracts must be signed directly with the project investor.

There are many cases where the third parties illegally obtain the buyers’ money by signing the contracts without a valid letter of authorization.

An example for this is the case where Ms. Pham Thi Thu Trang was prosecuted by Quang Nam Provincial Police, for obtaining property by fraud related to the sale of land in Tam Quang Resettlement Area project (phase 4) in Nui Thanh Town. – Nui Thanh district, Quang Nam province, invested by Van Kim Real Estate Business Investment Co., Ltd. Accordingly, Ms. Trang is promised in writing by Van Kim Company to transfer 60 plots of land to Ms. Trang when Van Kim Company is approved as the project investor. Using this document, Ms. Trang was building trust to sign and receive money from many people through capital contribution contracts, deposit contracts for up to 105 lots. The case is being under investigation, it is not yet concluded who is in the right and who is in the wrong, but what’s clear is the loss of the buyers and the money, time and effort they spent to pursue the case.

Aside from those problems, disputes often arise between investors and brokers. They file cases against each other to Court, causing the projects to be delayed, heavily affecting the rights and interests of the buyers.

For example, the dispute over the deposit and brokerage contract between Bach Dat An Joint Stock Company and Hoang Nhat Nam Investment Joint Stock Company related to a series of projects in Quang Nam - Da Nang has made thousands of buyers investing in these projects "stuck" in the dispute even though they have paid a large amount of money for the real estate products.

Fifth, be careful when signing capital contribution contracts, deposit contracts, and reservation contracts for land purchase.

Although the law sets out such strict conditions, the investors, due to the need to mobilize capital to implement the project, often do not wait until they meet the conditions, but they make transactions immediately at time of the “approval for investment guidelines”. Consequently, they provide forms of contracts circumventing the law, such as reservation contracts, deposit contracts, cooperation contracts, which are essentially sales and purchase contracts. And the buyers, looking for high profitability when buying land at this stage, have agreed to sign the contracts and pay the investors.

The contract is basically an agreement between two parties, however, the investors often prepare contract templates for the transactions, and the buyers rarely have any chance to discuss the terms with the investors. The terms of these contracts are often ambiguous and in favor of real estate businesses. Therefore, it is easy for disputes to arise between the parties and the buyer would completely be at a disadvantage.

The capital contribution contract for sale of land is used when investors need to mobilize capital for project implementation. By signing a loan contract, investment cooperation contract, etc., the buyer gives the investor an amount of money in return of a provision stating that they will receive the land in the project with full legal documents when the project is completed.

According to the regulations on capital mobilization for commercial housing development in the Law on Housing 2014 and Article 19 of Decree No. 99/2015/ND-CP, the capital contributors, cooperators, partners mentioned in this Point shall receive distribution of profit (in money or shares) according to their contribution ratio in the contract. The investor must not apply the capital raising method in this Point or other capital raising methods to distribute housing products, give priority to buy houses, pay deposits, or obtain the right to buy houses, or distribute land use right of the project to the capital contributors, except for contribution of capital for establishment of a new legal entity to be appointed by the government as investor in the housing construction project.

Thus, when buying land in commercial housing projects, the contribution of capital to mobilize capital for later distribution of land use rights or for priority registration, deposit, and enjoyment of the right to buy houses is not permitted by law. Therefore, these transactions will not be protected by the law.

As for deposit contracts, the nature of the deposit is a security measure to conclude or perform the contract and the deposit penalty is specified in Article 328 of the 2015 Civil Code as follow:

“1. Deposit is an act whereby one party (hereinafter referred to as the depositor) transfers to another party (hereinafter referred to as the depositary) a sum of money or precious metals, gemstones or other valuable things (hereinafter referred to as the deposited property) for a period of time as security for the entering into or performance of a contract.

2. Upon a contract being entered into or performed, any deposited property shall be returned to the depositor, or deducted from the amount of an obligation to pay money. If the depositor refuses to enter into or perform the contract, the deposited property shall belong to the depositary. If the depositary refuses to enter into or perform the contract, it must return the deposited property and pay an amount equivalent to the value of the deposited property to the depositor, unless otherwise agreed.”

Therefore, before paying for land purchase, buyers need to carefully read and understand the terms in these contracts. In particular, it is necessary to clearly and fully write down important information such as prices, payment methods, payment terms, deadlines, and penalties for damage in case the buyer pays late or fails to pay… to avoid a deposit penalty when problems arise. As for the obligations of the seller, the buyer must ask for clarification of the responsibility to hand over the land on time; a penalty in case of delays (usually the seller will integrate a lot of liability exemptions such as the case of force majeure, policy changes, etc.), the buyer must negotiate to reduce these terms.

Sixth, the contract for transfering land use rights between individuals must be notarized

The transfer of land use rights is a type of transaction that only takes effect when the general conditions on formalities are satisfied. Point a, Clause 3, Article 167 of the 2013 Land Law stipulates that: “Contracts on transfer, donation, mortgage or contribution of land use rights as capital or the rights to use land and land-attached assets must be notarized or certified, except the case of real estate business prescribed at Point b of this Clause.” Article 503 of the 2015 Civil Code stipulates that: “The transfer of land use rights shall be effect from the date of registration under the provisions of the law on land”. Thus, the Law clearly stipulates that a contract for the transfer of land use rights between individuals, which is not a contract signed with a real estate business organization, must be made in writing, must be notarized, certified.  These contracts shall be effective from the date of registration.

In cases where the transfer contract is established with a real estate company, it is not required to notarize or certify the contract. However, at the request of the parties, it is still possible to have the contract notarized if it fully satisfies all conditions (in terms of formalities, legal personality of the parties; commitment or agreement that does not violate regulations of law and on the basis of freely and voluntarily entering into commitments).

Article 42 of the Law on Notary 2014 provides that:

“Notaries of a notarial practice organization may only notarize contracts and transactions related to real estate within the province or centrally run city where the organization is located, excluding testaments or written disclaimers of real estate and letters of authorization related to the exercise of real estate-related rights.”

According to the above provision, the notary office or notary office located in the province or centrally run city where the land is located has the authority to notarize this contract.

Nowadays, many people establish bailiffs instead of signing transfer contracts. This is illegal behavior and potentially risky for buyers.

Bailiff is a term that is well known to many people, especially because it is related to real estate. According to Clause 3, Article 2 of Decree No. 08/2020/ND-CP on organization and operation of bailiffs, clearly stipulates the following:

“A bailiff is a document recording real events or acts directly witnessed by the bailiff, and made at the request of individuals, agencies or organizations in accordance with this Decree.”.

According to Article 36 of Decree No. 08/2020/ND-CP, “Bailiff does not replace notarized documents, certified documents and other administrative documents”.

Clauses 4 and 5, Article 37 of Decree 08/2020/ND-CP provides cases where bailiffs cannot be established:

“4. To certify contents and signatures in contracts and transactions as prescribed by law within the scope of notarization and certification activities; certify the accuracy, lawfulness and not contrary to social ethics of the translation of papers and documents from Vietnamese into foreign languages or from foreign languages into Vietnamese; confirm the signature, the information in the copy compared to the original.

5. Recording events and acts to transfer the land use rights, and ownership of properties without papers proving the right to use or ownership as prescribed by law.

…”

Thus, notarized or certified land use right transfer contracts, house purchase and sale contracts cannot be replaced with bailiffs. The transfer of land use rights and house ownership between individuals through agreements, without performing notarization procedures in accordance with the law, will not be valid. This affects the interests of the buyer because the transfer contracts in the form of bailiff will not satisfy the conditions to carry out the procedures for registration of changes on the land use right certificate.

Seventh, there must be a separate certificate of land use right for the investment land plot Request the project investor to carry out the procedures for transferring the name right after signing the transfer contract.

According to Article 188 of the 2013 Land Law, the certificate of land use rights is considered a mandatory condition when exercising the rights of land users (land owners).

When buying and selling project land without a certificate of land use rights, this transaction has many potential risks as follows:

(1) The sale and purchase contract is not notarized:

Point d, Clause 1, Article 40 of the Law on Notarization 2014 stipulates that one of the documents required to be included in the notarization request is “A copy of the ownership certificate or use right certificate or its substitute paper as permitted by law for assets subject to ownership or use right registration under law, in case the contract or transaction is related to those assets;”

Thus, if the land is purchased and sold without the certificate of land use rights, that purchase and sale contract will not be notarized and the buyer's interests will not be guaranteed.

(2) Difficulties in verifying the origin of the land

It is difficult for to verify the origin of the land without the certificate of land use rights. There are potential risks such as: the land is in dispute, agricultural land, even land has been decided to recover... Therefore, buyers can face legal disputes at any time.

(3) The land cannot be used to mortgage to get a bank loan, or contribute capital with land use rights or for other transfer activities.

In case there is a need for a bank loan, the land cannot be mortgaged without the certificate of land use rights.

To avoid possible risks, the buyer should wait until the land owner has completed all the necessary procedures to get the certificate of land use rights, and then carry out the procedures for transferring land use rights.

According to the Land Law 2013, when the government allocates or leases land to the investor, he will be granted a Certificate for the entire project area. When the project has met all the conditions to be divided into lots for sale, the investor is obliged to separate the plot to register the change (of names) for the transferee.

Procedures for transferring land in investment projects are carried out according to the provisions of Article 72 of Decree 43/2014, guided by Clause 5, Article 8 of Circular 24/2014/TT-BTNMT as follows: The housing project investor shall submit 1 set of dossier for registration and grant of a certificate of land use rights and ownership of houses and other land-attached assets on behalf of the acquirer of land use rights and buyers of houses and construction facilities or provide dossiers for buyers to make registration themselves.

A dossier must comprise:

-Written request for registration of land and land-attached assets and grant of a certificate of land use rights and ownership of houses and other land-attached assets;

-Contract on transfer of land use rights, house and construction facility purchase and sale as prescribed by law;

-Record of handover of houses, land and construction facilities.

Eighth, balance the financial ability when buying land

As mentioned above, the investor can use the capital mobilized from the buyer to perform work unrelated to the project and that may delay the progress. And if the previous buyer had borrowed temporarily to buy project land and relied on having the LURC as collateral for a loan, if the project was suspended, it would incur additional interest costs. Or in cases where the investor goes bankrupt, they will not be able to pay back.

In addition, many people mistakenly believe that project land is off-plan property, so they can borrow money from deposit contracts and capital contribution contracts. However, according to Clause 4, Article 10 of Decree No. 21/2021/ND-CP dated March 19, 2021 providing for the implementation of the Civil Code on security of performance of obligations, "security for obligation fulfillment in form of off-plan properties does not apply to land use right.”.

That is, the off-plan land use right is not a security asset and cannot be used to secure a transaction, which means it cannot be mortgaged for a loan.

Therefore, buyers need to evaluate financial ability when signing the contract and note the agreements on the payment schedule to avoid the situation of not being able to manage in time leading to penalty deposit, interest penalty or contract liquidation.

Ninth, how to settle disputes related to land purchase and sale contracts

Option 1: Directly negotiate with the investor or broker to request dispute resolution.

This is one of the most common methods, but the efficiency is not high because buyers often do not understand their own weaknesses and strengths as well as the other party's to provide reasons and grounds making the investor or the broker liable for their breach of contract. The advantage of this method is that it is simple, easy to implement, and does not cost much.

Option 2: Ask a third party to mediate disputes between the parties.

This method is a relatively new method, but it is also commonly used. This method brings high efficiency because there is a third party in the middle to listen to the thoughts of the parties, identify the issues that the parties are still in dispute, and come up with solutions. The solution helps the parties agree to solve the problem.

Option 3: Report the violations to the investigating authority

In cases of ghost projects, which do not meet the transfer conditions, the buyer may report their situation to the investigation authority. Depending on the nature and severity, violations may be administratively sanctioned according to the regulations of Decree No. 91/2019/ND-CP of the Government on sanctioning of administrative violations in the field of land. (the fine is up to 1 billion VND) or prosecute for criminal liability for obtaining property by fraud/ abuse of trust to appropriate property according to the provisions of the 2015 Criminal Code, amended and supplemented in 2017.

Option 4: File a lawsuit to resolve the dispute at a Court

In cases where the parties cannot agree on a solution or it is determined by the investigating authority that there is no criminal sign for the behavior of the investor/broker, the buyers can bring a case to the Court to settle the dispute. The advantage of this method is that the Court's decision on the settlement is a binding decision. In case of intentional evasion of obligations, the judgment will be executed by force. However, in reality, not every buyer can quickly recover their money even if they have won the case, due to many reasons, such as lengthy judgment enforcement procedures or the fact that the project’s investor is no longer able to execute the judgment enforcement, there are also cases where the investor deliberately does not cooperate or is inactive despite the law.

Option 5: Request the Court to initiate bankruptcy proceedings against the investor

The request for initiation of bankruptcy procedure is one of the effective measures to recover the invested capital when the project’s investor intentionally delays the project implementation or does not return the contributed capital to the buyers. However, before filling a petition to initiate bankruptcy proceedings against the investor, the buyer must prove his/her status as a creditor, and at the same time, prove that the project’s investor is falling under the conditions to initiate bankruptcy. bankruptcy proceedings.

Legally, this is also one of the solutions to recover part of the assets of the buyer contributed as capital. However, the request to initiate bankruptcy proceedings will also take a lot of time, usually lasts many years, and the possibility to recover the entire contributed capital of the buyers is not high because the project’s investor is also under obligations to other creditors (if any) when conducting bankruptcy proceedings, not to mention the costs incurred during the proceedings such as court fees, price slippage...

Tenth, it is necessary to have legal advice and support from a lawyer specializing in this field

As analyzed above, the purchase of land in investment projects involves many legal regulations, separate complicated transfer conditions and stages, which contain many risks. At the same time, the prices for raw land in investment project are rather high. Therefore, it is advisable to consult a lawyer or a person with legal knowledge to assess the risks, find ways to remove difficulties and obstacles related transaction, and at the same time assist the buyer in negotiating, drafting contract with the investor, detecting ghost projects to avoid the risks, bringing higher efficiency and reducing the time and money involved in legal proceedings.

Above are 10 points to consider when purchasing raw land in investment projects. Hopefully this will be useful and help reduce the risks when investing in this field.

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