On January 6th, 2022, the Government enacted a Decree No. 02/2022/ND-CP guiding the implementation of the Law on Real Estate Business 2014, which will take effect from March 1st, 2022 (hereinafter referred to as “Decree 02/2022”) with the following notable points:
a. Real estate businesses must disclose information
Decree 02/2022 clearly stipulates that the enterprise information must be publicized on the enterprise’s website, at the headquarters of the Project Management Board, and at real estate trading floors, including:
- Information about the enterprise: Name, head office address, phone number, name of the legal representative;
- Information about real estate put into business;
- Information on the mortgage of houses, construction works, real estate projects put into business (if any);
- Information on the quantity and type of real estate products to be traded, the quantity and type of products sold, transferred, or lease purchased; the rest are in business.
b. Abolishing the legal capital of real estate enterprises
Decree 02/2022 abolishes regulations on legal capital in Decree 76/2015/ND-CP, and at the same time supplements regulations on the equity level of real estate project investors based on the scale of land use as well as the method of determining the level of equity.
Specifically, the investor must have equity of not less than 20% of the total investment capital for projects with a land-use scale of fewer than 20 hectares, not less than 15% of the total investment capital for projects having a land-use scale of 20 hectares or more. The determination of equity is based on the results of the most recent audited financial statements or the results of independent audit reports of the operating enterprise (made in the year or the preceding year). In the case of a newly established enterprise, the equity capital shall be determined according to the actually contributed charter capital as prescribed by law.
c. Supplementing new conditions when buying and selling housing projects formed in the future
Decree 02/2022 stipulates the transfer of purchase and sale contracts lease-purchase of houses in the future and transfer of lease-purchase contracts houses and construction works (except for social housing purchase and sale contracts) must ensure the following conditions:
- There is a contract of sale, lease purchase as prescribed. If the parties sign before March 1st, 2022, there must be a signed contract;
- Must not have applied the application for a certificate of land use right;
- Purchase and sale contracts, lease and purchase contracts without disputes or lawsuits; houses and works in the contract shall not be distrained, mortgaged unless it’s agreed by the mortgagee;
- If purchasing, selling, or leasing and purchasing more than one house in the same contract but the parties want to transfer each house, the seller must agree with the investor to amend the purchase and sale contract, lease purchase or sign contract addendum before transferring contract.
d. Applying the general contract form when doing real estate business
One of the notable new points is that a series of real estate business activities will follow the forms in Decree 02/2022/ND-CP, including 08 forms of real estate business contracts related to the sale of real estate, transfer, lease, lease purchase, sublease real estate, transfer real estate projects.
Decree 02/2022/ND-CP takes effect from March 1st, 2022.