Right of the buyer in purchase and sale of residential house to be formed in the future

MINISTRY OF EDUCATION AND TRAINING HO CHI MINH CITY UNIVERSITY OF LAW -*** -MANAGING BOARD OF SPECIAL TRAINING PROGRAMS TRIEU MY KIM YEN RIGHTS OF THE BUYER IN PURCHASE AND SALE OF RESIDENTIAL HOUSE TO BE FORMED IN THE FUTURE BACHELOR OF LAW – GRADUATION THESIS Faculty: Commercial Law Academic year: 2013 - 2017 HO CHI MINH CITY 2017 MINISTRY OF EDUCATION AND TRAINING HO CHI MINH CITY UNIVERSITY OF LAW -*** -MANAGING BOARD OF SPECIAL TRAINING PROGRAMS TRIEU MY KIM YEN RIGHTS OF THE BUYER IN PURCHASE AND SALE OF RESIDENTIAL HOUSE TO BE FORMED IN THE FUTURE BACHELOR OF LAW – GRADUATION THESIS Faculty: Commercial Law Academic year: 2013 - 2017 Supervisor: Dr DANG ANH QUAN Author: TRIEU MY KIM YEN Student ID: 1353801011328 Class: CLC38B HO CHI MINH CITY 2017 DECLARATION I hereinafter declare that this thesis is definitely attributed to my own research and implemented under the supervisory guidance of Dr Dang Anh Quan I faithfully comply with regulations on citation and reference used in this thesis I am completely responsible for this guarantee LIST OF ABBREVIATIONS ABBREVIATIONS MEANING Certificate of land use rights, ownership of Certificate residential house and other assets attached to the land Circular 07/2015/TT-NHNN by the State Bank of Circular 07/2015/TT-NHNN Civil Code 2005 Vietnam dated June 25, 2015 regulating the bank guarantees Civil Code (Code No 33/2005/QH11) dated June 14, 2005 Civil Code 2015 Civil Code (Code No 91/2015/QH13) dated November 24, 2015 Construction Law 2014 Construction Law (Law No 50/2014/QH13) dated June 18, 2014 Contract A Purchase and sale contract between No Va Real Estate Investment Corporation Joint Stock Company and the buyer (in Appendix attached the thesis) Decree No 76/2015/ND-CP Decree No 76/2015/ND-CP of the Government dated September 10, 2015 stipulating detailed regulations for the implementation of a number of articles of Real Estate Business Law Decree No 99/2015/ND-CP Decree No 99/2015/ND-CP of the Government dated October 20, 2015 providing detailed regulations and guidelines for implementation of Residential Housing Law Enterprise Law 2014 Enterprise Law (Law No 68/2014/QH13) dated November 26, 2014 Law on protection of consumers’ rights 2010 Law on protection of consumers’ rights (Law No 59/2010/QH12) dated November 17, 2010 Purchase and sale contract Contract for purchase and sale of residential house to be formed in the future Real estate business enterprise Enterprise or cooperative conducting real estate business Real Estate Business Law Real Estate Business Law (Law No 2006 63/2006/QH11) dated June 29, 2006 Real Estate Business Law Real Estate Business Law (Law No 2014 66/2014/QH13) dated November 25, 2014 Residential Housing Law Residential Housing Law (Law No 56/2005/QH11) 2005 dated November 29, 2005 Residential Housing Law 2014 Residential Housing Law (Law No 65/2014/QH13) dated November 25, 2014 TABLE OF CONTENTS INTRODUCTION .1 CHAPTER GENERAL MATTERS ABOUT PURCHASE AND SALE OF RESIDENTIAL HOUSE TO BE FORMED IN THE FUTURE 1.1 Definition and characteristics of residential house to be formed in the future 1.1.1 Residential house 1.1.2 Residential house to be formed in the future 1.2 Advantages of purchase and sale of residential house to be formed in the future 11 1.3 Summary on the development of laws on purchase and sale of residential house to be formed in the future 13 1.4 Subjects in purchase and sale relationship of residential house to be formed in the future 15 1.4.1 The investor 15 1.4.2 The buyer 17 1.5 Object in purchase and sale relationship of residential house to be formed in the future 18 1.6 Contract for purchase and sale of residential house to be formed in the future 20 1.6.1 Definition 20 1.6.2 Form and content of contract for purchase and sale of residential house to be formed in the future 20 1.6.3 Standard form contract 21 SUBCONCLUSION OF CHAPTER 23 CHAPTER PRACTICAL STATUS OF REGULATIONS ON RIGHTS OF THE BUYER IN PURCHASE AND SALE OF RESIDENTIAL HOUSE TO BE FORMED IN THE FUTURE AND RECOMMENDATIONS .24 2.1 Legal necessity to protect rights of the buyer in purchase and sale of residential house to be formed in the future 24 2.2 Rights of the buyer need to be protected in purchase and sale of residential house to be formed in the future 26 2.2.1 Right to be provided with information 26 2.2.2 Right to be guaranteed amounts paid to the investor 31 2.2.3 Right to negotiate with the investor about provisions of the contract 37 2.2.4 Right to be handed over residential house to be formed in the future 41 2.2.5 Right to receive the Certificate of land use rights, ownership of residential house and other assets attached to the land 45 2.3 Recommendations 46 SUBCONCLUSION OF CHAPTER 49 CONCLUSION 50 REFERENCE INTRODUCTION Reasons for conducting the thesis Real estate business is a crucial and indispensable industry in the economy Besides solving housing demand for people and supporting the national budget, it also plays an important role in promoting development of other industries, such as building materials, banking and financial services, construction industry, etc., and solves the issue of employment for a large number of people1 In recent years, real estate business has a lot of positive changes and attracts investment from both domestic and foreign investors In the first quarter of 2017, real estate business increased 3.72% in gross domestic product (GDP) growth, rose by 55% in newly established registered enterprises and 31.1% in registered capital over the same period of 2016 In addition, foreign direct investment into real estate business reached 343.7 million USD, up 30.23% compared with the same period of 20162 It shows that real estate business in 2017 continues stability and is even stronger than the one in 2016 Purchase and sale of residential house to be formed in the future becomes attractive and lively in recent years The first reason is that it is an effective capital raising source for investors who often have difficulties in finance due to the great value of real estate and prolonged construction process The second one is that it can solve the current housing demand of people in Vietnam that is at a high level3 and help buyers to acquire residential houses with cheaper price Whereas, because of the element of profit between the parties and characteristics of purchase and sale of residential house to be formed in the future, a lot of risks occur and adversely affect the rights of the parties, especially the rights of the buyer In practice, situations such as infringement of contract, investors’ occupation of payments paid Hoai Nam, ““Hệ sinh thái” kinh tế xoay quanh bất động sản” [TRANS: ““Ecosystem” of economy around real estate”], http://vietnamnet.vn/vn/kinh-doanh/dau-tu/bat-dong-san-la-don-bay-cho-nen-kinh-te363406.html, reviewed on May 10, 2017; “Thép, xi măng, v.v hưởng lợi từ bất động sản” [TRANS: “Steel, cement, etc are taking advantages from real estate” ], http://vneconomy.vn/bat-dong-san/thep-ximang-dang-huong-loi-tu-bat-dong-san-20161103111237588.htm, reviewed on May 10, 2017 General Statistics Office of Vietnam, “Tình hình kinh tế xã hội quý I năm 2017” [TRANS: “Socio – economic situation in the first quarter of 2017”], http://www.gso.gov.vn/Default.aspx?tabid=621&ItemID=18343, reviewed on May 10, 2017 According to the report named “Affordable housing in Vietnam – The way ahead” by World Bank and the ministries of the Government of Vietnam in 2015, average per year within the next 05 years, the urban areas in Vietnam are expected to add 374 000 households to meet requirements of population growth For more information: Vân Ly, “WB: Mỗi năm đô thị Việt Nam cần 374000 nhà mới” [TRANS: “WB: Vietnamese urban areas need 374000 new houses each year”], http://www.thesaigontimes.vn/139825/WB-moi-nam-dothi-VN-can-374000-can-nha-moi.html, reviewed on May 16, 2017 by buyers, late handover or handover not as agreed in the contract and prescribed by law regularly occur4 Current law on real estate business though has lots of positive changes for protecting the buyer in purchase and sale of residential house to be formed in the future, it contains some inappropriate and unclear regulations from which shortcomings arise in practice While real estate business in general and purchase and sale of residential house to be formed in the future in particular are holding a greatly significant position in economy and being in the stage of vibrant development, arising risks and shortcomings unfavorably impact on rights of the buyer in purchase and sale of residential house to be formed in the future For this reason, the author conducts the Bachelor thesis named as “Rights of the buyer in purchase and sale of residential house to be formed in the future” Literature review Real estate market has a great influence on economy and is also a complicated and rich field Thus, in practice, there are a lot of works which research on various issues relating to real estate business, such as Le Thi Ngoc Hieu (2011), Pháp luật mua bán nhà kinh doanh bất động sản [TRANS: Legislation on purchase and sale residential house in real estate business], Bachelor thesis, Ho Chi Minh City University of Law; Huynh Van Vinh (2010), Pháp luật hình thức giao dịch nhà, cơng trình xây dựng kinh doanh bất động sản [TRANS: Legislation on forms of transaction in connection with houses and other construction works in real estate business], Master thesis, Ho Chi Minh City University of Law; Mai Chi Tin (2014), Mua bán nhà, cơng trình xây dựng theo pháp luật kinh doanh bất động sản [TRANS: Purchase and sale of house and construction work under legislation on real estate business], Bachelor thesis, Ho Chi Minh City University of Law; etc There are also many journals which research on real estate business with different aspects such as Phan Huy Hong, Bui Thi Thanh Thao (2014), “Bàn đổi quy định pháp luật điều kiện kinh doanh bất động sản” [TRANS: “Discussing innovation of legal regulations on conditions applicable to real estate business”], Legal sciences journal, No 01 (80)/2014; Le Minh Hung (2014), “Sửa đổi quy định hợp đồng kinh doanh bất động sản Luật Kinh doanh bất động sản” [TRANS: “Amendment of regulations on real estate business contract Dieu Thuy, “Mua nhà hình thành tương lai: Người mua nhà học cách tự cứu mình” [TRANS: “Purchase residential house to be formed in the future: Buyers should save themselves”], http://vietnamnet.vn/vn/bat-dong-san/thi-truong/mua-nha-hinh-thanh-trong-tuong-lai-nguoi-mua-nha-hayhoc-cach-tu-cuu-minh-371437.html, reviewed on May 18, 2017 under Real estate business law”], Legal sciences journal, No 02 (81)/2014; Tran Huynh Thanh Nghi (2016), “Những điểm thách thức thi hành Luật kinh doanh bất động sản năm 2014” [TRANS: “The new contents and the challenges in the enforcement of the Law on real estate business in 2014”], Legislation research journal, No 04 (308) T2/2016; Vu Thi Hong Yen (2017), “Thế chấp bất động sản hình thành tương lai – Bất cập giải pháp hoàn thiện pháp luật” [TRANS: “Mortgage of property to be formed in the future – Inadequacies and solutions for legal improvement”], Jurisprudence journal, No 3/2017; etc In terms of purchase and sale of residential house to be formed in the future, there are still not many theses and journals researching this topic: Le Chi Cuong (2011), Pháp luật hợp đồng mua bán nhà hình thành tương lai [TRANS: Legislation on contract for purchase and sale of residential house to be formed in the future], Master thesis, Ho Chi Minh City University of Law; Le Thi Hien (2014), Pháp luật mua bán nhà hình thành tương lai [TRANS: Legislation on purchase and sale of residential house to be formed in the future], Bachelor thesis, Ho Chi Minh City University of Law; Nguyen Thi Kim Lien (2014), Pháp luật mua bán nhà, công trình xây dựng hình thành tương lai [TRANS: Legislation on purchase and sale of house, construction work to be formed in the future], Master thesis, Ho Chi Minh City University of Law These authors of theses generally presented reasoning on purchase and sale of residential house to be formed in the future, analyzed subjects, object and contract in purchase and sale of residential house to be formed in the future, bring out potential risks for both investor and buyer and gave proposals in order to ensure rights and interests of parties The same feature of three theses is that they were conducted when legal regulations of laws such as Real Estate Business Law (Law No 63/2006/QH11) dated June 29, 2006, Residential Housing Law (Law No 56/2005/QH11) dated November 29, 2005 and their implementing were enforcing and were yet replaced Within the scope of study by the author, there is yet any thesis researching on purchase and sale of residential house to be formed in the future since current Real Estate Business Law and Residential Housing Law took effect from July 1, 2017 Moreover, there is not any thesis studying officially about rights of the buyer in purchase and sale of residential house to be formed in the future Besides, there are some journals researching on rights of the buyer in purchase and sale of residential house to be formed in the future: Bui Duc Giang (2016), “Pháp luật bảo lãnh bán, cho thuê mua nhà hình thành tương lai” ... 2.2 Rights of the buyer need to be protected in purchase and sale of residential house to be formed in the future The buyer in purchase and sale of residential house to be formed in the future. .. purchase and sale of residential house to be formed in the future 24 2.2 Rights of the buyer need to be protected in purchase and sale of residential house to be formed in the future ... BUYER IN PURCHASE AND SALE OF RESIDENTIAL HOUSE TO BE FORMED IN THE FUTURE AND RECOMMENDATIONS 2.1 Legal necessity to protect rights of the buyer in purchase and sale of residential house to be formed