The legality of condotels needs to be clarified to better manage this new type of property gaining popularity in Viet Nam, a representative from the Ministry of Construction said.

Pham Van Thuong, from the Housing and Real Estate Market Management Department, said at a conference held late last week by the Vneconomy online newspaper that relevant ministries were developing regulations about condotel standards, ownership ands financial management.

Experts said clarifying the legality of condotels was urgently needed as this type of property is developing rapidly, but the absence of regulations carries risks for ownership and profit sharing.

Condotels are operated as hotels with units being individually owned. Unit owners can rented out their apartments like any other hotel room.

According to Le Hoang Chau, President of HCM City Real Estate Association, regulations are needed to ensure transparency in profit sharing in the long term and the rights of buyers, adding that profit sharing now relies mainly on developers’ guarantees, with yet a solid framework for buyers’ benefits protection.

Nguyen Ngoc Thanh, Deputy President of the Viet Nam Real Estate Association, said that condotels have great development potential in Viet Nam as tourism is one of the country’s spearhead industries.

Thanh said that it’s too early to worry about an excess of condotel supply over demand because the demand was still very high. “What should be worried is the legality of condotel,” Thanh said.

Huong Tran Kieu Dung, deputy chairwoman of developer FLC Group, said that condotel supply remained below the market demand, given the increasing number of tourists. “Investing in condotels is a trend for smart investors,” Dung said.

Dung proposed the legal framework for condotels be clarified soon, adding that this would stimulate developers to invest more in this type of property. — VNS