HÀ NỘI – The legal status and progress of properties would be made available to the public in order to reduce the risks for home buyers, according to an HCM City official.

Nguyễn Toàn Thắng, director of HCM City Department of Natural Resources and Environment said, this would be a part of the effort to promote transparency in the property market which turned critical amid a recent spate in conflicts between developers and buyers.

Reasons for the conflicts and risks for buyers were varied such as the unclear legal status of projects, stagnant progress in construction, slow granting of house ownership certificates and violations by developers such as the ones happening in apartment projects Harmona, Bảy Hiền Tower and RubyLand in HCM City recently.

In such cases, it was the buyers who suffered, experts said at a recent conference.

“Especially, projects which were already used as mortgages for bank loans would also be publicly named,” Thắng said. Violations by developers in using their projects as mortgages were becoming a cause for serious concern in recent times, he said.

Lê Hoàng Châu, president of the HCM City Real Estate Association, proposed making the publicising of information about property projects mandatory.

“Buyers really need transparent and accurate information about property projects and developers before a purchase and to protect their rights,” economic expert Đinh Thế Hiển said, and added that risks for buyers were growing as a large number of transactions were being conducted on unfinished projects.

Problem in management

Lawyer Trần Đức Phương from HCM City Bar Association said that the root of conflict between property developers and home buyers was weak management which made it easy for property developers to engage in violations and home buyers to be faced with a dilemma.

Experts said that under established regulations, property developers must have land use certificates before mortgaging their projects. In fact, many did not possess adequate documents but still managed to acquire loans by mortgaging their projects. Some apartments were even mortgaged for loans by both developers and buyers at the same time and the dilemma would grow worse in case developers did not have adequate financial capacity to repay debts.

Bùi Quang Tín from Banking University of HCM City said that banks should be blamed for weak management towards mortgaged assets as well as neglect in after-lending supervision.

Tín said that the management of mortgaged assets must be tightened to prevent violations and to protect the rights of home buyers.

In addition, home buyers must study the capacity of property developers, the legal status of projects and the bank guarantees carefully, as well as ensure they have the contracts for their purchases, Tín said.

However, buyers said at the conference that there was too little information about projects from the management agencies while the information by developers was vague with regard to the legal status of the projects, construction progress and granting of house ownership certificates.

“There are loopholes in the legal framework while inspections and punishments are not strict enough,” Trần Trọng Tuấn, director of HCM City Department of Construction, said.

Tuấn said the State management must be improved, estimating that the some 20 per cent of developers did not have the financial capacity and were only interested in making much money as fast as possible.

“The most important thing now is to improve the transparency of the property market to enable buyers to access accurate information,” Nguyễn Mạnh Khởi, deputy director of the Department of Housing and Real Estate Management Department under the Ministry of Construction, said.

Information about projects, especially those which are mortgaged, would be made public in the future, Khởi said, and added that a software was being developed for this purpose.

In addition, the responsibilities of property developers, banks and management agencies must be clarified while supervision must be tightened, Khởi said.

Việt Nam made bank guarantees compulsory for transactions on unfinished projects, with an aim to protect buyers. – VNS