Many Regulations on Real Estate Business Changed in 2022
From March 1, 2022, many regulations on the real estate business have been changed to create favorable conditions for organizations and individuals engaged in real estate business with little capital to still be allowed to do business.
The regulations on real estate business have been changed
Decree 02/2022/ND-CP issued by the Government on January 6 detailing the implementation of several articles of the Law on Real Estate Business. Many new contents are affecting the operation of the real estate market. New regulations on real estate business conditions under Decree 02 will take effect from March 1. According to the Ministry of Construction, the effective Decree 02 will replace Decree 76/2015/ND-CP. However, Decree 02 has removed the legal capital requirement of 20 billion VND to ensure compliance with Point a, Clause 2, Article 75 of the Law on Investment 2020.
Thus, organizations and individuals doing real estate business (except for organizations, households and individuals selling, transferring, leasing, leasing, and buying real estate on a small scale, infrequently) must become establish an enterprise following the law on enterprises or a cooperative under the provisions of the law on cooperatives, having a business in real estate (hereinafter referred to as the enterprise).
Although the requirement to regulate the legal capital of 20 billion VND has been removed, real estate businesses must publicize on their websites and at the headquarters of the Project Management Board for real estate business investment projects.
In case of doing business through a real estate exchange, information about the business must be disclosed at the real estate exchange, including name, head office address, contact phone number, and name of the agent. represented by law. Along with that is information about real estate put into business as prescribed in Clause 2, Article 6 of the Law on Real Estate Business; information on a mortgage of houses, construction works, real estate projects put into business (if any); information on the quantity and type of real estate products being traded, the quantity and type of real estate products sold, transferred, leased and purchased and the remaining quantity and types of products that are still being traded…
Another new point is noted that these businesses only trade in real estate that fully meets the conditions specified in Article 9, Article 55 of the Law on Real Estate Business.
In case an investor is selected to be the investor of a real estate project according to the provisions of law, such an investor must have an equity capital of not less than 20% of the total investment capital for a project of a large scale. using less than 20 hectares of land, not less than 15% of the total investment capital for projects with a land-use scale of 20 hectares or more. When conducting real estate business, the project investor must still meet the above conditions.
Note, the determination of equity, in this case, 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 year immediately preceding it); 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.
In fact, according to the Law on Investment and the Law on Enterprises, a real estate enterprise has a real estate business line when it registers its business. When doing real estate business, it is necessary to ensure several business principles for this field. It is equality before the law; freely negotiate based on respecting the legitimate rights and interests of the parties through the contract, not contrary to the provisions of law. Real estate put into business must fully satisfy the conditions prescribed by this Law; Real estate business must be honest, public, and transparent.
The reality of real estate business regulations
Organizations and individuals have the right to trade in real estate in areas outside the scope of national defense and security protection according to master plans and plans on land use approved by competent state agencies. These are also notable contents mentioned at Point a, Clause 2, Article 75 of the Law on Investment 2020.
Experts say that this new regulation will create favorable conditions for organizations and individuals involved in real estate business with little capital to still be allowed to do business. Notably, Point b, Clause 2, Article 75 of the 2020 Investment Law, also amends the regulations on the authority to permit the transfer of all or part of a real estate project. Thus, for a real estate project that is approved by an investor or issued with an Investment Registration Certificate following the Law on Investment, the authority, and procedures for transferring the whole or a part of the project shall be implemented following the Law on Investment.
For real estate projects that do not fall into the cases specified above, the authority to permit the transfer of all or a part of real estate projects must be decided by the provincial People’s Committee to allow the transfer of all or part of the real estate project. The investment in real estate for the project shall be decided by the provincial People’s Committee. The Prime Minister shall decide to permit the transfer of all or part of a real estate project, for a project whose investment is decided by the Prime Minister.
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