UPDATE THE NEW POINTS OF THE LAW ON HOUSING 2023

by Admin

05/10/2024

Documentation & Knowledge

UPDATE THE NEW POINTS OF THE LAW ON HOUSING 2023

The demand for housing ownership is one of the essential needs of humans and contributes to the development of the labor force and the state's economy. Housing has always been one of the special objects in civil transactions. Today, with the continuous development of population density and social progress, the demand for housing ownership is increasing. Along with that, the difficulties regarding housing are truly a societal challenge that requires comprehensive solutions to address part of the issue by developing the quantity of housing to meet different demands of the people in terms of both quantity and quality. Achieving these goals also requires improvements in housing law, and regulations regarding housing are among the issues of great concern in society the Law on Housing is continuously amended and improved, with the most recent enactment being the Law on Housing 2023, effective from August 1, 2024, to address the existing shortcomings and to be suitable for the current socio-economic situation.

For this reason, to help businesses and individuals grasp the latest information about housing regulations in Vietnam, this article will update some new points of the Law on Housing 2023 by Dai Ha Thanh Law Firm. 

  1.   Definition of housing  
  • Houses refer to structures serving residential purposes and daily activities of families and individuals. Houses serving both residential and non-residential purposes without being prohibited by the law are mixed-use houses. (Clause 1, Article 2 of the Law on Housing 2023). 

  • Types of housing:
  • Individual house means a house constructed on a separate residential land parcel under the lawful use rights of an organization or individual or on rented land or borrowed land of an organization or individual. Individual houses include villas, semi-detached houses and detached houses that are constructed for the residential purpose or combined purposes. 
  • Apartment buildings refer to buildings with at least 02 storeys, multiple dwelling units, common staircases and common walkways, private property and common property, common infrastructures and amenities for use by households, individuals, and organizations, including apartment buildings built for residential purposes and apartment buildings built for mixed-use purposes. 
  • Commercial housing properties refer to houses built in order to be sold, lease-purchased, and/or leased in accordance with market mechanisms. 
  • Official houses (or official residence) refer to houses for use by entities eligible for staying in rental official residence during a period in which said entities hold titles and/or travel on business trips in accordance with this Law.
  • Relocation housing refers to houses assigned to entities in case of relocating as a result of the Government’s expropriating of land and/or performing of land clearance as per the law.
  • Social housing refers to houses supported by the Government for use by entities benefiting from housing support programs under this Law. 
  • Worker house in the industrial zone means a facility constructed on the area of commercial and service land within an industrial zone in accordance with law regulations on industrial zone management to be allocated to individuals who are employees in such industrial zones during the time they are employed in accordance with this Law.
  • Housing for people’s armed forces refers to social housing sold, lease-purchased, or leased to members of people’s armed forces in accordance with this Law.
  • Old houses refer to houses built in 1994 or earlier and include apartment buildings.
  • Public housing refers to houses under public ownership where the Government acts as ownership representatives and jointly manages.

 

  1. The new points of the Law on Housing 2023
    1. New regulations related to “mini department”
  1. Conditions for individuals wishing to build "mini-apartments"

According to Article 57 of the Law on Housing 2023, individuals have the right to use residential land granted by the state, including cases of land allocation due to compensation, land obtained through the transfer of land use rights, or land rented or borrowed from other organizations or individuals (Clause 3, Article 54 of the Law on Housing 2023). If they wish to construct housing under the following conditions, they must meet the requirements to be the project investor for residential construction projects. The investment and construction must adhere to the laws governing construction and other relevant legal regulations for residential construction projects:

- Residential buildings with 02 or more floors, where each floor has apartments designed for sale, rent-to-own, or a combination of sale and rent-to-own.

- Residential buildings with 02 or more floors and a total of 20 or more apartments available for rent must meet the conditions to act as the project investor for residential construction. The technical standards for this type of housing follow the regulations for apartment buildings.

Apartments must comply with security and order, fire prevention and fighting regulations, and technical infrastructure standards, and ensure that the design is approved by the relevant authorities, in order to be issued a certificate of ownership for each apartment. Additionally, this type of real estate can also be traded in the real estate market according to the regulations of the Real Estate Business Law and the Housing Law.

b. Issuing Certificate of house ownership for "mini apartment"

Apartments that meet the conditions set out in the apartment law regarding construction standards for security, fire safety, and technical infrastructure, and ensure compliance with designs approved by the competent authority will, according to Clause 2, Article 57 of the Law on Housing 2023, be eligible for ownership certificates starting from August 1, 2024.

Thus, the new regulations on building conditions for “mini-apartments” are helping to resolve ongoing issues related to mini-apartments in major cities today. Furthermore, the introduction of new regulations for issuing ownership certificates for mini apartment owners addresses the housing needs of individuals.

  1. Regulations on the Duration of Use for Apartment Buildings

According to Article 58 of the Law on Housing 2023, the regulation on the duration of ownership for apartment buildings has been removed, replaced instead by the regulation on the duration of use for these buildings, as follows:

  • The duration of use for an apartment building is determined based on the design documents and the actual usage period of the apartment building according to the assessment results from the competent authority.
  • The usage period begins from the acceptance of the apartment building being put into use in accordance with legal regulations on construction.
  • When the apartment building reaches the end of its usage period as specified in the design documents under Clause 1, Article 58 of the 2023 Housing Law, or if the building is damaged, poses a collapse risk, or does not ensure safety for the owner or occupants while still within its usage period, the provincial People's Committee must direct the inspection and assessment of the quality of the apartment building in accordance with Article 61 of the 2023 Housing Law.

 When the apartment building's usage period ends and poses a collapse risk, its residential value is lost, but residents still retain stable long-term land use rights, which will serve as a basis for compensation. Thus, it's clear that abolishing the regulation on the duration of ownership and only regulating the duration of use helps apartment owners feel more secure about their housing situation.

  1. Regulations on forced relocation from apartments that need to be demolished.

  1. Cases that require relocation from an apartment building

According to Article 73 of the Law on Housing 2023, the regulations regarding the relocation of owners and users of apartment buildings are as follows:

(i) The provincial People's Committee must issue an urgent relocation decision and organize the relocation of owners and residents of apartment buildings that are subject to relocation to temporary housing in the following cases of buildings that must be demolished:

- The condominium is damaged by fire or explosion and no longer meets the safety conditions for continued use;

- The condominium is damaged due to natural disasters or enemy activities and no longer meets the safety conditions for continued use;

(ii) The provincial People's Committee issues a decision to relocate according to the approved compensation and resettlement plan for the following apartment buildings that must be demolished:

- The apartment building has critical structural components that are in a state of overall danger, posing a risk of collapse. It does not meet the conditions for continued use, and urgent relocation of the owners and residents is necessary;

- The apartment building is severely damaged, showing localized dangerous conditions in the main load-bearing structure of the building, and has one of the following factors: the fire prevention and fighting technical infrastructure system; water supply, drainage, wastewater treatment; electricity supply, internal traffic that does not meet the requirements of current technical standards or poses a safety risk in operation, exploitation, and use, necessitating demolition to ensure safety for the owners and users of the apartment building and to meet urban renovation and beautification requirements;

- The apartment building has damaged one of the main structural components of the construction, namely: foundation, columns, walls, beams, or trusses, which does not meet the requirements for normal use but does not fall under the cases that require demolition as stated above. However, it is located in an area that must undergo renovation and be built in accordance with the apartment building that is subject to demolition as specified in this clause according to the approved construction plan.

  1. Decision to enforce relocation

For cases specified in Article 73 of the 2023 Housing Law, after the provincial People's Committee issues a relocation decision, if the owners or occupants of the apartment building do not comply, the provincial People's Committee will issue an enforced relocation decision according to Article 74 of the 2023 Housing Law.

The decision for forced relocation includes the following main contents:

  • Name and address of the owner and the person using the apartment that must be forcibly relocated
  • Time of coercive relocation
  • Location for temporary housing arrangements
  • Relocation methods
  • Funding for the forced relocation
  • Responsibilities of relevant authorities, organizations and individuals in enforcing coercive relocation.

After the provincial People's Committee issues a decision for forced relocation, the district People's Committee where the apartment building is located is responsible for organizing and carrying out the relocation according to the enforcement decision.










 

  1. Expand the beneficiaries of the social housing support policy.

Pursuant to Article 76 of the Law on Housing 2023, two new entities are allowed to buy social housing including:

- Students, learners in universities, academies, higher education institutions, colleges, vocational education and training facilities, specialized education institutions as per the law; students of public ethnic boarding schools.

- Enterprises, cooperatives, and joint cooperatives in industrial parks.

Individuals wishing to benefit from the social housing support policy must meet the conditions specified in Article 78 of the Housing Law:

- For students from universities, academies, colleges, vocational schools, and specialized schools according to legal regulations; public boarding school students from ethnic minorities renting social housing are exempt from the housing and income conditions set out in Clause 1 of Article 78 of the Housing Law 2023.

- For enterprises, cooperatives, and cooperative unions in industrial zones that wish to lease workers’ accommodation for the purpose of renting it out to individual workers, they must satisfy the conditions outlined in Clause 1 of Article 93 of the Housing Law 2023, which includes:

 + There must be a lease agreement for the industrial zone, and the business must be actively producing and operating within the industrial zone.

+ There must be a labor contract with the subjects specified in Clause 1, Article 91 of this Law, specifically including workers who are employed at enterprises, cooperatives, and cooperative unions operating in the industrial zone.

Expanding the eligibility for social housing support policies helps meet the demand for renting and purchasing social housing, making it fairer for low-income individuals and vulnerable groups in society. Furthermore, this expansion reflects the Party and State's concern for the housing needs of low-income people today.

  1. Amendments to the principles of selling, leasing, and renting social housing.

Previously, the 2014 Housing Law stipulated that the lessee or buyer of social housing could not resell the property within a minimum period of 5 years from the date of full payment for the lease or purchase. During these 5 years, if the buyer or lessee has fully paid for the housing and wishes to sell it, they can only sell it back to the social housing management unit or to individuals eligible to purchase social housing, provided that the management unit does not buy it, at a maximum price equal to the selling price of similar properties at the same location and time of sale.

According to the regulations of the 2023 Housing Law, Article 89 states that within a period of five years from the date the buyer of social housing has fully paid for the property and wishes to sell it, they may only sell it back to the project investor of the social housing development or to individuals eligible to purchase social housing, at a sales price that does not exceed the price of the social housing as stated in the purchase agreement with the project investor.

To clearly understand some specific regulations of the Housing Law, based on Article 39 Decree No. 100/2024/ND-CP dated July 26, 2024, regarding the procedures and processes for reselling social housing within five years:

  • When reselling social housing to the project investor or other eligible buyers under social housing purchase or lease-purchase terms, the seller must complete the contract termination procedures with the investor. The resale is carried out according to the provisions in point d, clause 1 of Article 89 of the Housing Law and the regulations of the law on real estate business and land law.
  • When reselling social housing to another eligible buyer who qualifies for purchasing or leasing social housing, the buyer must have documentation confirming their eligibility and conditions as guided by the Minister of Construction, the Minister of National Defense, and the Minister of Public Security.
  1. Regulations on the development of social housing land fund in commercial housing projects

According to Article 83 of the Law of Housing 2023, provincial People's Committees are required to allocate sufficient land for the development of social housing in line with the approved provincial housing development program and plan.

Specifically, Article 17 of Decree No. 100/2024/ND-CP clearly outlines the issue of developing social housing land in commercial projects as follows:

In special-grade cities and types I, II, and III urban areas, the provincial People's Committee where the commercial housing development project is located must decide that the project developer reserves 20% of the total residential land area (excluding existing residential land and resettlement land) within the project scope, having invested in building the necessary technical infrastructure for social housing construction.

In the case of investment projects for the construction of commercial housing in special urban areas, type I, type II, and type III, which fall under the investment approval authority of the Prime Minister, the provincial People's Committee where the project is located shall decide to allocate 20% of the total residential land area (excluding existing residential land and resettlement land) within the project scope, provided that the leading agency has obtained opinions for appraisal and proposed investment approval for the Prime Minister's consent.

In cases where a commercial housing construction investment project has its boundaries spanning multiple administrative units, including at least one urban area classified as type III or higher, the project investor must allocate 20% of the total residential land area of the project, which has already invested in building technical infrastructure, for the construction of social housing.

  1. Regulations on incentives for investors in social housing

The 2014 Housing Law states that investors are exempt from land use fees and land rental fees for the land area allocated or leased by the state for the purpose of investing in social housing construction. However, in practice, some investors have to wait for the procedures to determine land prices and calculate land use fees and land rental fees before they can apply for the exemption.

Under the Law on Housing 2023, Article 85 provides incentives for investors in social housing. Accordingly, social housing investors are exempt from land use fees and land lease fees for the entire area of the project.

Additionally, investors are not required to carry out procedures for determining land prices, calculating land use fees, or rental fees that are exempt, and they do not need to submit requests for exemptions from land use fees or rental fees.

The new regulations related to incentives for social housing investors aim to boost investment in social housing projects. They simplify the procedures for investors building social housing projects, addressing the actual housing needs of the population in our country.

  1. Regulations on building worker house in the industrial park

Worker house in the industrial zone means a facility constructed on the area of commercial and service land within an industrial zone in accordance with law regulations on industrial park management to be allocated to individuals who are employees in such industrial zones during the time they are employed in accordance with this Law. 

Compared to the Law on Housing 2014, the Law on Housing 2023 has added the category of accommodation for workers in industrial zones and housing for the armed forces (point b, clause 1, Article 31 of the 2023 Housing Law). Accordingly, Article 93 of the 2023 Housing Law stipulates that workers currently employed by enterprises, cooperatives, or cooperative unions in industrial zones who rent accommodation for workers must have an employment contract and a confirmation from the enterprise, cooperative, or cooperative union in the industrial zone, as well as from the enterprise managing the infrastructure of the industrial zone.

The worker house in the industrial zone is a type of apartment building designed and constructed to meet standards and building regulations. The rental price for worker accommodation in industrial zones is negotiated between the landlord and the tenant based on the price framework set by the provincial People's Committee. The number of migrant workers entering the Vietnamese labor market is increasing, and most of these workers face difficulties regarding housing, often living far from their workplaces. Therefore, it is entirely reasonable and necessary for the Party, the State, and the Vietnam General Confederation of Labor to issue regulations on the construction of accommodation for workers in industrial zones to address the current pressing issues. 

In summary, the Law on Housing 2023 was enacted with the aim of addressing the limitations present in Housing Law 2014. Amend and refine the provisions of the old law to align with the current situation, ensuring consistency and coherence among the Law on Housing and related laws. In addition, the modification and addition of new points to promote the development of the real estate market in our country, regarding further regulations for social housing projects that meet the housing needs of low-income individuals, economic development, and social welfare.

Above are all the updates on the new points of the Law on Housing 2023 from DHT. Our company, Đại Hà Thành Law Firm, with a team of lawyers and legal advisors trained both domestically and internationally, is committed to providing professional legal services to our esteemed clients. If you need detailed advice on issues related to housing, please contact us to receive professional and effective legal consulting services. 

 

 

 











 

REFERENCE

  1. LEGAL DOCUMENT
  1. Law on Housing 2023 
  2. Decree No 100/2024/NĐ-CP Detailed regulations on several articles of the Housing Law regarding the development and management of social housing dated July 26, 2024

B. WEBSITE

  1. https://baochinhphu.vn/luat-nha-o-2023-go-bo-nhieu-nut-that-de-phat-trien-nha-o-xa-hoi-102240802101436041.htm, refer to August 2, 2024.
  2. https://baotintuc.vn/kinh-te/chung-cu-mini-duoc-cap-so-hong-tu-ngay-18-20240730104613956.htm#:~:text=T%E1%BB%AB%20Ngh%E1%BB%8B%20%C4%91%E1%BB%8Bnh%20s%E1%BB%91%2071,c%C6%B0%20th%C6%B0%C6%A1ng%20m%E1%BA%A1i%20th%C3%B4ng%20th%C6%B0%E1%BB%9Dng, refer to August 2, 2024
  3. https://lsvn.vn/mo-t-so-diem-moi-da-ng-chu-y-ta-i-luat-nha-o-2023-1702902671.html, refer to August 2, 2024.