REAL ESTATE BUYERS' RIGHTS IN LEGAL PROVISIONS 2025

DISCUSSION ON SOME FACTORS AFFECTING THE PROTECTION OF REAL ESTATE BUYERS’ RIGHTS ACCORDING TO LEGAL PROVISIONS

Lê Ngọc Thạnh

PhD, Lecturer, Faculty of Law, Hồ Chí Minh City University of Technology (Hutech)

ABSTRACT

The relationship between real estate buyers and real estate business enterprises is asymmetric in all aspects: in terms of real estate information, the content of real estate business contracts, and the right to notarization to determine the authenticity and legality of transactions. To protect real estate buyers, the author presents, analyzes, and discusses some legal factors affecting the protection of buyers’ rights and proposes recommendations to amend and supplement several related legal provisions.

Keywords: Protection of real estate buyers, legal factors, legal improvement

I. INTRODUCTION

The law in general, including real estate business law (REB), aims to protect social relations that the State deems necessary to protect, as well as the rights and interests of participants in legal relations, including the rights of real estate buyers, and ultimately, to protect the stability in the socio-economic development of the country. From a historical perspective, to protect the rights of real estate buyers, the author suggests that the State needs to establish a legal framework starting with:

(i) Creating conditions for buyers to access information related to the legality and physical aspects of real estate goods;

(ii) After understanding and researching, buyers need to know the transparency and equality in transactions through the content of standardized contract regulations for selling goods, to avoid the situation where contracts are made according to the seller’s will, which may cause disadvantages for buyers in case of disputes;

(iii) At the same time, to ensure the legality and authenticity of transactions, contracts need to be “assessed” by notaries acting as “preventive judges” to detect and timely prevent transactions that do not comply with legal regulations, avoiding losses for buyers and social resources.

Of course, there are many related issues such as financial obligation guarantees, payment, goods delivery, dispute resolution, etc. However, within the framework of this article, the author will sequentially present and analyze some related issues mentioned above, with the significance of an important legal framework to ensure the rights of real estate buyers.

II. LEGAL PROVISIONS ON ACCESS TO INFORMATION TO PROTECT REAL ESTATE BUYERS’ RIGHTS

Regarding “information,” the 2013 Constitution addresses several issues:

Firstly, the provisions on “information” related to individual and citizen rights are mentioned in Articles 21 and 25 as follows:

Everyone has the inviolable right to privacy, personal secrets, and family secrets; has the right to protect their honor and reputation. Information about private life, personal secrets, and family secrets is guaranteed to be safe by law.
Everyone has the right to the secrecy of correspondence, telephone conversations, telegrams, and other forms of private information exchange. No one is allowed to open, control, or illegally seize others’ correspondence, telephone conversations, telegrams, and other forms of private information exchange.
Citizens have the right to freedom of speech, freedom of the press, access to information, assembly, association, and demonstration. The exercise of these rights is regulated by law.

The right to access information, bearing a political nature, belongs to citizens and is naturally associated with the obligations of Vietnamese nationals. Some of the rights mentioned above relate to personal rights and are not directly associated with the obligation to require enforcement.

Secondly, the group addressing “information” related to individuals granted authority by the State, as well as State agencies, is stipulated in Articles 80, 98, 60, and 96 with the following content:

National Assembly deputies have the right to request agencies, organizations, and individuals to provide information and documents related to the tasks of those agencies, organizations, and individuals. The heads of agencies, organizations, or individuals are responsible for responding to the issues requested by National Assembly deputies within the legal timeframe.
The Prime Minister has the duty to report to the people through mass media on important issues within the Government’s and the Prime Minister’s authority.
The Government has duties to uniformly manage the economy, culture, society, education, health, science, technology, environment, information, communication, foreign affairs, national defense, national security, social order, and safety; to implement mobilization orders, emergency state declarations, and other necessary measures to protect the country, and to ensure the lives and property of the people.

Through the above content, it can be seen that the 2013 Constitution – the highest legal document in our country – only addresses the right to “access information” related to citizens’ political issues. Personal rights will be protected in the relationship between individuals and the State as the subject of public authority; however, the right to access information in business relations is not stipulated in the Constitution.

Thirdly, it is also necessary to recognize that Article 19 of the 1980 Constitution, Article 17 of the 1992 Constitution, and Article 53 of the 2013 Constitution all stipulate: “Land, water resources, mineral resources, marine resources, airspace, other natural resources, and assets invested and managed by the State are public assets owned by the entire people, represented and uniformly managed by the State.”

Thus, although the assets on the land are owned by the investor, the land itself is owned by the entire people. Therefore, the transfer of assets in real estate business needs to be communicated to the true owner, and land users also need to be informed of related information to exercise their rights according to legal regulations. On this basis, both the 2013 Land Law (amended and supplemented in 2018) and the 2024 Land Law stipulate the “State’s responsibility in building and providing land information” or the “State’s responsibility in providing land information.”

Fourthly, related to the disclosure of information on business real estate as stipulated in Article 6 of the 2014 Law on Real Estate Business (amended and supplemented in 2020), real estate business enterprises are responsible for publicly disclosing real estate information according to the listed forms and content. Article 6 of the 2023 Law on Real Estate Business also stipulates the disclosure of information on real estate and real estate projects brought into business with higher requirements than before, including:

Before bringing real estate and real estate projects into business, real estate business enterprises must fully, honestly, and accurately disclose the information stipulated in Clauses 2, 3, 4, and 5 of Article 6 of the 2023 Law on Real Estate Business on the housing and real estate market information system and on the enterprise’s website.
Information on real estate projects includes: (i) Investment policy decisions or investment policy approvals or project investment approvals; (ii) Land allocation decisions, land lease decisions, or land use purpose change permissions by competent state authorities; (iii) Detailed planning information approved by competent state authorities; (iv) Standard contracts used in real estate business transactions according to the 2023 Law on Real Estate Business.
Information on: Future housing and construction works; existing housing and construction works; land use rights with technical infrastructure in real estate projects; disclosed information must be updated when there are changes. All the disclosed content listed above is detailed in the regulations; and, of course, the law also obliges real estate business enterprises to fully perform their obligations according to the disclosed information to ensure the rights of real estate buyers.

Through the above provisions, particularly the disclosure of information on business real estate as stipulated in the 2023 Law on Real Estate Business, has contributed to ensuring the rights of real estate buyers in the future. In recent times, many people, due to a lack of information, have purchased land use rights in projects, fulfilling up to 95% of contract obligations, but have not yet received Land Use Rights Certificates from competent state authorities (Gia Linh, 2024).

III. LEGAL PROVISIONS RELATED TO STANDARD CONTRACTS IN REAL ESTATE BUSINESS TO PROTECT REAL ESTATE BUYERS’ RIGHTS

Firstly, standard contracts according to civil law provisions.

Article 406 of the 1995 Civil Code and Article 407 of the 2005 Civil Code both stipulate: “A standard contract is a contract consisting of terms proposed by one party as a template for the other party to respond within a reasonable time; if the party receiving the proposal accepts, it is considered as accepting the entire content of the standard contract proposed by the offering party.” Additionally, these articles also provide for the legal consequences for parties participating in legal relations with standard contracts.

Inheriting the above legal provisions, Clause 1, Article 405 of the 2015 Civil Code stipulates standard contracts as follows:

“A standard contract is a contract consisting of terms proposed by one party as a template for the other party to respond within a reasonable time; if the party receiving the proposal accepts, it is considered as accepting the entire content of the standard contract proposed by the offering party.

A standard contract must be disclosed so that the party receiving the proposal knows or must know about the contract’s content.

The procedure and method of disclosing the standard contract are carried out according to the provisions of law.”

Thus, although the wording in the above legal normative documents has changed, there are some consistent points as follows:

A standard contract is proposed by one party as a template. This means that the party proposing the standard contract has time to study legal provisions and draft the contract content in a way that benefits them in the cooperative, production, or business relationship.
The party proposing the standard contract has the right to set a time limit according to their will for the other party to consider whether to accept or not. If the party receiving the proposal accepts, it is considered as accepting the entire content of the standard contract proposed by the offering party.
Because it is a standard contract, the law does not specifically provide for discussing, amending, or supplementing the contract content to suit the will and aspirations of the parties when preparing to participate in legal relations. In other words, this is an asymmetric information relationship between the parties. Perhaps for this reason, Clause 1, Article 405 of the 2015 Civil Code added the content: “A standard contract must be disclosed so that the party receiving the proposal knows or must know about the contract’s content.” This allows the counterpart to have the opportunity to research, learn, and access information when intending to establish a business relationship with the party proposing the standard contract.

Secondly, besides one party proposing a standard contract, in certain legal relationships, to protect the legitimate rights and interests of the parties and public rights and interests, the State has also established standard contracts, which are also a type of standard contract issued by competent state authorities and stipulated in legal normative documents such as:

(i) Clause 4, Article 17 of the 2014 Law on Real Estate Business stipulates: “The Government shall prescribe types of standard real estate business contracts.” Based on this, the Government issued Decree No. 76/2015/NĐ-CP on September 10th, 2015, detailing the implementation of several articles of the Law on Real Estate Business, including provisions on contract templates. Recently, on January 6th, 2022, the Government issued Decree No. 02/2022/NĐ-CP detailing the implementation of several articles of the Law on Real Estate Business, replacing the aforementioned Decree No. 76/2015/NĐ-CP; it also prescribes contract templates in real estate business activities.

(ii) Inheriting this provision, Clause 7, Article 44 of the 2023 Law on Real Estate Business authorizes the Government to prescribe types of standard contracts in real estate business stipulated in Clause 1, Article 44 of the 2023 Law on Real Estate Business, with some changes to the types of standard contracts to suit the types of “goods” stipulated in Article 44 of the 2023 Law on Real Estate Business.

Thirdly, while the 2014 Law on Real Estate Business did not stipulate “deposit,” Clause 5, Article 23 of the 2023 Law on Real Estate Business states:

“5. Real estate project investors are only allowed to collect a deposit not exceeding 5% of the sale price. The deposit agreement must clearly state the sale price, lease-purchase price of housing, construction works, and the floor area of construction works in the construction.”

This is one of the new points of the 2023 Law on Real Estate Business. It ensures buyers’ rights in payments and limits the initial capital mobilization by sellers. Instead of 30% as stipulated in Clause 1, Article 57 of the 2014 Law on Real Estate Business, it is now only (temporarily determined) 5% according to Clause 5, Article 23 of the 2023 Law on Real Estate Business.

However, stipulating: “The deposit agreement must clearly state the sale price, lease-purchase price of housing, construction works, and the floor area of construction works in the construction” does not fully reflect the act of “deposit” as prescribed in Articles 292 and 328 of the 2015 Civil Code.

Therefore, the author suggests adding point m to Clause 1, Article 44 of the 2023 Law on Real Estate Business: “Deposit contract,” to ensure the rights of real estate buyers.

IV. NOTARIZATION AND AUTHENTICATION OF CONTRACTS RELATED TO LAND USE RIGHTS AND REAL ESTATE BUSINESS

This content is regulated by the 2024 Law on Land and the 2023 Law on Real Estate Business. Accordingly, Point b, Clause 3, Article 27 of the 2024 Law on Land on notarization and authentication of contracts and documents exercising land use rights is implemented as follows:

“a) Contracts for transfer, gifting, … must be notarized or authenticated, except as provided in point b of this clause;

b) Contracts for leasing, subleasing land use rights, land use rights and attached assets, … where one or all parties involved in the transaction are real estate business organizations, may be notarized or authenticated at the request of the parties;”

This means that subjects involved in transactions related to land use rights and attached assets, where one or all parties involved in the transaction are real estate business organizations, may have their contracts notarized or authenticated at the request of the parties; in other words, it requires mutual consent rather than the request of just one party.

Similarly, Clauses 4 and 5, Article 44 of the 2023 Law on Real Estate Business stipulate:

“Real estate business contracts, real estate service business contracts, where at least one party involved in the transaction is a real estate business enterprise, may be notarized or authenticated at the request of the parties.”

It is evident that to conceal illegal activities, real estate business enterprises will never “agree” to propose notarization of the concluded contracts, as they understand that the Notary Office will certainly not recognize the authenticity and legality of the transaction according to Clause 1, Article 2 of the 2014 Notary Law, and the enterprise will not achieve its goal of appropriating customers’ assets.

Due to the “inadequacy” of the legal provisions as analyzed above, the “Alibaba Nguyễn Thái L1 case” occurred; in which the defendant Nguyễn Thái L1 was convicted of “fraud to appropriate property,” causing asset losses to many people in various regions, mainly in the Southeast, including Hồ Chí Minh City, as described in Judgment No. 300/2023/HS-PT dated May 19th, 2023, of the High People’s Court in Hồ Chí Minh City: “At the time of signing the agreement for transferring land use rights, most projects were agricultural land that had not been converted to residential land.” If the “agreement” had been notarized, the illegal actions mentioned above would have been prevented.

Therefore, the author proposes amending the phrase “at the request of the parties” to “at the request of one party” as stipulated in Clauses 4 and 5, Article 44 of the 2023 Law on Real Estate Business. After the amendment, this provision will be:

Additionally, the author also proposes similar amendments to Point b, Clause 3, Article 27 of the 2024 Land Law on the notarization and authentication of contracts and documents exercising land use rights.

V. CONCLUSION

As discussed, the legal framework to protect the rights of real estate buyers is a “chain” of legal provisions from the initial information-gathering stage, the use of standard contracts in transactions, contract notarization, payment stages, to the point where the buyer receives the real estate goods in the transaction and the State recognizes the legality of land use rights as well as property ownership on the land.

Although the 2023 Law on Real Estate Business has just been issued, it will need time to “verify” the suitability between the current practical requirements and the institutions that lawmakers have established, amended, and supplemented to protect the entities involved in real estate business relations. However, it should also be noted that some inherited legal provisions inherently pose risks and need to be further amended to adapt to the diverse and ever-changing economic conditions. With this in mind, the author’s analysis and recommendations hope to be considered to improve the law, ensuring the rights and interests of the entities involved, especially the rights of buyers in real estate business.

REFERENCES

Governemnt. (2015). Decree No. 76/2015/NĐ-CP dated September 10th, 2015, detailing the implementation of several articles of the Law on Real Estate Business. Hà Nội.
Government. (2022). Decree No. 02/2022/NĐ-CP, detailing the implementation of several articles of the Law on Real Estate Business. Hà Nội.
Gia Linh. (2024). Why has An Hạ Residential Area not been issued certificates after many years? Retrieved from https://danviet.vn/binh-chanh-vi-sao-khu-dan-cu-an-ha-chua-duoc-cap-so-sau-nhieu-nam-20240705101436733.htm.
National Assembly. (1995). Civil Code. Hà Nội. National Assembly. (2005). Civil Code. Hà Nội. National Assembly. (2013). Constitution. Hà Nội.
National Assembly. (2013, 2018). Land Law. Hà Nội. National Assembly. (2014, 2018). Notary Law. Hà Nội.
National Assembly. (2014, 2020). Law on Real Estate Business. Hà Nội. National Assembly. (2015). Civil Code. Hà Nội.
National Assembly. (2023). Law on Real Estate Business. Hà Nội. National Assembly. (2024). Land Law. Hà Nội.
High People’s Court in Hồ Chí Minh City. (2023). Judgment No. 300/2023/HS-PT dated May 19th, 2023. Retrieved from https://congbobanan.toaan.gov.vn/3ta1246651t1cvn/

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