Two Decrees on Real Estate Business Enter into Force – What Lessors of Commercial Premises Need to Know
Last month, the government issued two decrees related to the Law on Real Estate Business (“LOREB”) 2023. Issued on 24 July, both Decree 94/2024 (“Decree 94”) and Decree 96/2024 (“Decree 96”) entered into force on 1 August. In doing so, the regulations ushered in new requirements in the real estate sector. In this update, we discuss some of the changes in these regulations and their implications for real estate enterprises leasing commercial premises to their tenants.
Public information disclosure
In particular, Article 4.1 of Decree 96 requires real estate companies to publish the following information before building or premises lease contracts developed under a real estate contract are signed:
- The investment policy decision, investment policy approval, or investment approval of the real estate project (as required in Article 6.2 (a) of LOREB);
- The land lease decision (as regulated in Article 6.2 (b) of LOREB);
- The land-use rights certificate (“LURC”) (as detailed in Article 6.4 (a) and (b) of LOREB);
- The decision approving 1/500 masterplan or site general plan (as specified in Article 6.2 (c) of LOREB and Article 4.2 (a) of Decree 96);
- Any mortgage over the leased property (described in Article 6.4 (c) of LOREB), and;
- The template lease contract used by the real estate company to lease areas to tenants (as regulated in Article 6.2 (d) of LOREB and Article 12.3 (a) of Decree 96).
This information must be published on the residential houses and real estate market information system via the e-portal: bds.xaydung.gov.vn.
Real estate enterprises are also required to declare the number and value of transactions as soon as a contract is signed using Form 11 of Decree 94. This must then be updated each quarter, with information such as the number of premises/units, area (m2), rent (per m2), lease contract price (excluding taxes and fees), and the number of premises/units issued with an LURC.
For declaration purposes, real estate enterprises must contact the local construction management authority where the project is located to open a designated account to get access to the e-portal. Once the declared information is processed by local People’s Committees, selected information shall be made public online at: batdongsan.xaydung. More detailed information may also be made available to “organisations and individuals according to the laws on information access” for a fee, as described in Articles 21.1 (c) and 21.4 of Decree 94.
Template lease contracts
Article 12.2 lists the types of contract that must be signed by real estate enterprises according to the templates of contract attached in the appendices of Decree 96. This list includes, in particular, the template lease contract for leasing “construction works, parts of the construction floor area within the construction work having the function of (…) commercial, service…” (Appendix VI).
Article 12.3 (c) and (dd) of Decree 96 contains strict requirements on the use and modification of this template. In particular, real estate enterprises are not allowed to change the content of the template; supplementary content must not violate legal, social, or moral standards – nor change or contradict information provided elsewhere in the template; and real estate enterprise violations will be handled according to relevant laws and will compensate for losses their customers incur if their signed contracts contradict the template.
For more information about the LOREB, or investing in real estate in Vietnam, just contact us on: contact@apflpartners.com. Our team contains some of the leading practitioners in real estate law in Vietnam, and we have advised developers, construction companies, banks and financial institutions, real estate companies, architects, and others on each stage of their projects in sectors ranging from office building to shopping centers and from hotels to resorts.
Disclaimer: This article and its content are for information only and are not given as legal or professional advice. they do not necessarily reflect all relevant legal provisions with respect to the subject matter. Readers should seek legal or professional advice before taking or refraining to take any action.
