Open terms on offer for apartment ownership

Thursday, Feb 20, 2014 08:35

Trung Hoa -Nhan Chinh apartments in Ha Noi's Cau Giay District. Apartment buyers feel more reassured now that the Construction Ministry has planned to remove the 70-year limited term for ownership. — VNS Photo Truong Vi

HA NOI (Biz Hub) — Apartment buyers and sellers can now negotiate the length of ownership for apartments instead of a fixed term as at present, according to the Ministry of Construction.

Under a draft amendment to the 2005 Law on Housing proposed by the ministry last year, ownership of residential apartments was limited to 70 years if the State allocated or rented land for housing developers to build apartment buildings.

After the term expired, the State would have the option of reclaiming the land from the ‘buyers' and offering them relocation options.

However, early this week, the head of the ministry's Housing and Real Estate Management Department, Nguyen Manh Ha, said that the ministry would withdraw the old proposal.

The latest draft only stipulates that housing developers must specify the duration the land that would be used as land for apartment buildings, Ha said, explaining that people could use and own their apartments for that designated period.

At the end of the period, housing management authorities at provincial or municipal levels would examine the buildings, and occupants would only be permitted to stay on if it was deemed to be safe.

If not, the buildings would be removed. Vice Chairman of the HCM City Real Estate Association Le Chi Hieu said the negotiated term of apartment ownership would reassure buyers.

He said that any policy that concerned home seekers or made them hesitant would have a negative effect on the housing market.

He noted that in HCM City alone, tens thousands of apartments were empty and low-and-middle cost housing accounted for about 43 per cent of commercial housing, while 70 per cent of housing developers were reliant on bank loans.

"Hesitancy could slowdown the housing market, possibly killing many housing developers," he said.

Last year's proposal to limit the term of apartment ownership stirred many forums and social networks concerned about the future of apartment ownership.

Many of those who already live in residential apartments have registered their concerns that the properties they bought using their life savings would be returned to the State after a fixed period.

Vice President of the Viet Nam Federation of Civil Engineering Associations Pham Sy Liem said that the limited ownership term caused concerns for both housing developers and buyers.

"People will opt to buy houses instead of apartments because they want to own the property permanently," he said.

But the head of the Land Fund Development under the Land Management Administration of Natural Resources and Environment, Bui Ngoc Tuan, said that it was reasonable to impose fixed terms on apartment ownership because apartment buildings usually only lasted for 70-80 years.

Due to limited ownership terms, the price of apartments would decrease and become more affordable for low-income earners, while those who had higher incomes could buy houses with permanent ownership.

The amended Law on Housing is expected to be included on the National Assembly's next agenda and approved later this year. — VNS

Comments (0)