Speakers at a workshop in HCM City discuss the legal framework needed for the condotel property segment. (Source: VNA)HCM City (VNA) - Investment in condotels remainsappealing despite defaults in profit commitments by propertydevelopers, but a clear legal framework is needed toprotect investors’ rights, according to experts.
Speaking at a seminar in Ho Chi Minh City on December 17, LuongHoai Nam, member of the Tourism Advisory Council, said that condotelinvestment would continue to be attractive because of fast-paceddevelopment in tourism infrastructure.
However, investment remains risky because of the “lackof a legal framework, limited ownership period (often 50 years), and lack ofmanagement capacity of the developers”, Nam said.
No condotel project in Vietnam has been granted an ownershipcertificate, which has caused problems for investors and statemanagement agencies.
Le Hoang Chau, Chairman of the HCM City Real EstateAssociation (HoREA), said it was important to protect the rights ofinvestors. “We think that an ownership certificate should be issued foreach condotel.”
He said there was no need for a new law,but current laws need new content to ensure the rights of investors.
The law should clearly stipulate the conditions forraising capital for future condotel projects. These wouldinclude construction permits and complete infrastructure systemsbefore the sale of the units.
The condotel projects must also be guaranteed bya bank, Chau said.
In Vietnam, developers often pre-sell condotels andthen use the money from buyers to complete project construction.
Mai Van Phan, Deputy Director of the Land Administrationunder the Ministry of Natural Resources and Environment, said that underthe Tourism Law, a condotel means a hotel condo operating as ahotel which is a service business and does not have a residentialpurpose.
“Land for building condotels is categorised as land for leasefor production and business within a period of only 50 years, notfor residential purpose (which is longer term), so it’s impossible togrant long-term ownership certificates for such condotels,” he said./.
VNA
