A condotel project in the central city of Da Nang. (Photo: VNA)Hanoi (VNS/VNA) - The Ministry of Public Security has proposed not grantingownership certificates to allow condotels, tourist villas and officetels to beturned into residential projects.
In its report submitted to the Prime Minister Nguyen Xuan Phuc relating toshortcomings in laws over condotels, tourist villas and officetels, theministry clarified issues regarding management and trading of the estates.
It said some localities like Da Nang city and Ba Ria Vung Tau province haveproposed changing land use purposes and issue certificates of ownership forcondotels, gradually legalising them into residential apartments, puttingpressure on social infrastructure. This could raise many complex issues abouteconomic and social security.
If the certificate is granted to condotel owners, buyers could mortgage theirassets to get loans. This could cause risk of credit insecurity as mostinvestors of condotel products mortgage their projects at banks, the ministrysaid.
The ministry said many ministries believe they have sufficient legal basis tomanage condotel apartments, tourist villas and officetels.
However, construction investment and management of these real estateproducts have encountered many difficulties which current laws havenot resolved.
The Ministry of Construction said they did not prohibit condotels beingturned into residential projects but current laws do not provideregulations for the conversion of commercial and service buildings toresidential apartments.
Therefore, projects wishing to convert into residential products should becarefully considered and strictly comply with provisions of the law oninvestment and urban planning.
The Ministry of Natural Resources and Environment (MONRE) in February issuednew guidelines about the land-use regime and certification of non-residentialconstruction works, including condotels.
These new guidelines bring positive signs to Vietnam’s real estate market.However, the Ministry of Public Security said in the document, MONRE did notyet clarify whether the property ownership certificate for condotels,officetels and tourist villas will be granted to the project owner or for eachapartment.
“In case of granting to each buyer in the project, there would be many complexproblems in security and order in the management and operation of the building,as well as withdrawal upon the expiry of the project's land use term,” itadded.
Le Hoang Chau, Chairman of HCM City Real Estate Association (HoREA), said theyhave repeatedly opposed the conversion of condotels into a residential projectbecause these are two types of land with different uses.
He said a condotel is a project belonging to tourism service land. It isdeveloped for Vietnam’s tourism needs, which is developing very fast and needshigh-class infrastructure. Meanwhile, housing is the land for residentialresidents, in addition to accommodation, it needs more public utilities toserve communities such as schools and hospitals.
Therefore, the conversion from condotel to residential projects would create alack of uniformity in tourism development infrastructure as well as long-termrevenue of localities, he added.
Economist Dinh The Hien said the amendments to provisions of laws for thisnew type of real estate were too late. In fact, there are many types of realestate born before the laws but only on a small scale. This condotelwas developed with too large scale in many localities but lacks synchronisedlaws.
This has notonly made it difficult for local management but also for secondary investors.The evidence was that recently, some condotel project owners had broken theircommitments when unexpectedly announcing the suspension of profit payment tocondotel buyers, he said./.
VNA
