Contracts for purchase and sale of residential houses to be formed in the future (residential housing currently in the process of investment in construction which has not been tested and commissioned for use1) are becoming popular due to the need to raise capital of the developer (“Developer“) and the need for accommodation of individuals, household, … (“Buyer” or “Transferor“). In some cases, after the Buyer and the Developer have completed the conclusion of contracts for purchase and sale of residential houses to be formed in the future (“Contract“) and during the time the housing is under construction, the Buyer is no longer interested in buying the house and wishes to transfer it to another party (“Transferee“). This article gives some considerations to the parties involved when transfering the Contract, applicable to commercial residential housing, in accordance with the current law as of 02 May 2024.
1. Conditions for transfering contracts for purchase and sale of residential houses to be formed in the future
According to Article 59 of the Law on Real Estate Business 2014, Article 7 of Decree 02/2022/ND-CP, Article 32 of Circular 19/2016/TT-BXD, the Buyer has the right to transfer the Contract when the following conditions are simultaneously met:
- The Buyer and the Developer have signed the Contract;
- Dossiers for issuance of Certificates of land use rights, ownership of houses and other assets attached to land (“Certificates“) of the housing have not yet been submitted to competent state agencies;
- The Contract is not subject to disputes or lawsuits;
- Housing under the Contract is not disposed of or mortgaged as security for the performance of any obligation, unless agreed by the mortgagee.
2. Order and procedures for transfering contracts for purchase and sale of residential houses to be formed in the future
Pursuant to Article 8.1 of Decree 02/2022/ND-CP and Article 33, Article 34 of Circular 19/2016/TT-BXD, to transfer the Contract, the parties need to take the following steps:
Step 01: Sign the document for Transfer
The Transferor and the Transferee shall prepare a written document for transfer of the Contract (“Transfer Document“), specifically:
a. In terms of content, the Transfer Document must include the following main contents:
- Information about the Transferor and Transferee;
- Number and date of the Contract;
- Transfer price, term and method of payment;
- Rights and obligations of the parties;
- Dispute resolution;
- Other agreements.
The parties can refer to the Form of documents on Transfer of housing purchase and sale contracts in Appendix 24 issued together with Circular 19/2016/TT-BXD and amend and supplement accordingly, but must ensure that all the above main contents are present and must not contravene the provisions of civil law and law on residential housing2.
b. In terms of quantity, the Transfer Document must be made in 07 copies, of which:
- 03 copies to hand over to the Developer;
- 01 copy submitted to the tax authority;
- 01 copy of the Transferor;
- 01 copy of the Transferee;
- 01 copy to save at the notary and certification agency.
Step 02: Notarize and certificate the Transfer Document3
a. Transferor and Transferee submits an application for notarization or attestation Documents of transferment, including:
- Transfer Documents: 07 originals;
- Contract: 01 original;
- Identification documents of the Transferor and the Transferee (identity card/citizen identification/passport for individuals; establishment decision/establishment registration certificate for organizations): 01 certified copy or uncertified copy must be presented together with the original for comparison;
- Other documents as prescribed by the law on notarization and attestation (such as: notarization request form4).
b. Notary and certification agencies shall notarize or authenticate the Transfer Document within the prescribed time limit (not exceeding 10 working days in case of notarization5 or the maximum time limit agreed upon by the parties in case of authentication6).
Step 03: Pay taxes, fees and charges related to the transferment
Step 04: The Developer confirms the Transfer Document
After the obligations to pay taxes, fees and charges for the transfer have been completed, the Transferee shall submit 01 set of documents for the Developer to confirm in the Transfer Document.
a. A dossier of request for confirmation by the Developer in the Transfer Document includes:
- Transfer Documents (notarized, authenticated): 05 originals;
- Contract: 01 original;
- Tax payment receipt or proof of tax exemption in accordance with tax laws;
- Identification documents of the Transferor and the Transferee (identity card/citizen identification/passport for individuals; establishment decision/establishment registration certificate for organizations): 01 certified copy or uncertified copy to be presented together with the original for verifiication;
b. The Developer is responsible for confirming the Transfer Document within a maximum of 05 working days from the date of receipt of all such documents and then handing over to the Transferee the following documents:
- Transfer Document (certified by the Developer): 02 original copies (01 copy of the Transferee and 01 copy of the Transferor);
- Contract: 01 original;
- Tax payment receipt or proof of tax exemption in accordance with tax laws.
Step 05: Certificates
a. The Transferee shall be issued a Certificate in accordance with the law, as the owner of the residential housing, after the housing has completed its construction, acceptance and put into use.
b. When submitting an application for Certificates, in addition to the documents prescribed by the law on land, the applicant (Developer or Transferee7) must additionally submit to the certificate issuing authority the following documents:
(i) Contract: 01 original;
(ii) Transfer Document (certified by the Developer): 01 original.
3. Some other notes
3.1. The Transferee continues to exercise the rights and obligations of the Buyer (Transferor) to the Developer.8
3.2. The Developer is responsible for creating favorible conditions for the parties in the transferment of the Contract and no costs shall be collected in connection with this transferment.9
3.3. The Transferee has the right to further transfer the Contract to another organization or individual as long as the dossier of application for the Certificate has not been submitted to the competent state agency.10
3.4. The transferment of the Contract must be made in individual housing or apartments. In case the Contract involves many houses (apartments, individual houses), the entire number of houses in the Contract must be transfered; if the Transferor wishes to assgin one or several houses out of the total number of houses purchased by the Developer, the Transferor must re-establish the Contract or annex to the Contract with the Developer before carrying out the procedure for transfering the Contract.11
(1) Article 3.19 of the Law on Housing 2014
(2) Article 34.2 of Circular 19/2016/TT-BXD
(3) This step is not mandatory in case the transferor is an enterprise or cooperative with real estate business function, according to Article 33.2 of Circular 19/2016/TT-BXD.
(4) Article 40.1.a of the Law on Notarization 2014
(5) Article 43.2 of the Law on Notarization 2014
(6) Article 37 of Decree 23/2015/ND-CP
(7) Article 6.4 of Decree 99/2015/ND-CP
(8) Article 59.2 of the Law on Real Estate Business 2014
(9) Article 59.2 of the Law on Real Estate Business 2014
(10) Article 32.2 of Circular 19/2016/TT-BXD
(11) Article 32.3 of Circular 19/2016/TT-BXD
Disclaimers:
This article is for general information purposes only and is not intended to provide any legal advice for any particular case. The legal provisions referenced in the content are in effect at the time of publication but may have expired at the time you read the content. We therefore advise that you always consult a professional consultant before applying any content.
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