LAND USE RIGHTS CERTIFICATE, OWNERSHIP RIGHTS FOR HOUSING, AND ASSETS ATTACHED TO LAND FOR COMMERCIAL APARTMENT PROJECTS IN THỦ ĐỨC CITY, HỒ CHÍ MINH CITY: CURRENT SITUATION AND SOLUTIONS

LAND USE RIGHTS CERTIFICATE, OWNERSHIP RIGHTS FOR HOUSING, AND ASSETS ATTACHED TO LAND FOR COMMERCIAL APARTMENT PROJECTS IN THỦ ĐỨC CITY, HỒ CHÍ MINH CITY: CURRENT SITUATION AND SOLUTIONS

LAND USE RIGHTS CERTIFICATE, OWNERSHIP RIGHTS FOR HOUSING, AND ASSETS ATTACHED TO LAND FOR COMMERCIAL APARTMENT PROJECTS IN THỦ ĐỨC CITY, HỒ CHÍ MINH CITY: CURRENT SITUATION AND SOLUTIONS

Nguyễn Thị Bích Phượng

Trần Duy Hùng

Nguyễn Trung Quyết

Department of Land Management and Real Estate, Agriculture and Forestry University, Hồ Chí Minh City

Nguyễn Thị Tường Thư

People’s Committee of Bình Chiểu Ward, Thủ Đức City, Hồ Chí Minh City

Abstract:

This research aims to evaluate the current situation of commercial apartment projects and the issuance of land use rights certificates, ownership rights for housing, and assets attached to land in these projects in Thủ Đức City, Hồ Chí Minh City. The study results show that as of 2023, 162 out of 172 apartment buildings are operational in the area, of which 125 are commercial apartments, accounting for 77.2%. Specifically, from 2014 to 2023, 89 commercial apartment buildings were constructed, accounting for 71.2%.

The issuance of land use rights certificates, ownership rights for housing, and assets attached to land for the projects reached 28.25%, with 12 out of 89 projects not yet granted certificates. The main reasons include construction not in accordance with issued building permits, project mortgages by investors, and fees charged contrary to initial contracts leading to disputes and ineligibility for certificate issuance.

The research proposes four groups of solutions:

(i) Solutions for project mortgages at banks;

(ii) Solutions for taxes and fees;

(iii) Solutions for the management of apartment building construction;

(iv) Solutions for handling violations.

Keywords: Land use rights certificate, apartment project, commercial apartment, Thủ Đức City.

I. INTRODUCTION

The Land Use Rights Certificate, Ownership Rights for Housing, and Other Assets Attached to Land (hereinafter referred to as the LUR Certificate) is a legal document used by the State to confirm the legal land use rights, housing ownership, and other assets attached to land for land users (Quốc Hội, 2013). The LUR Certificate is one of the key elements in the state management of land. An apartment building is a type of special housing where multiple separate and independent apartments exist within one building (Quốc hội, 2014a). This type of housing has existed for quite some time in various countries worldwide, becoming quite popular in Singapore, the US, and South Korea since the 1960s.

Commercial apartments, also known as commercial housing, are apartment complexes built by organizations for sale to home buyers or long-term lease. According to regulations, the investor of a housing project is responsible for registering the application for the issuance of the LUR Certificate on behalf of the transferee of the land use rights, home buyers, construction works, or providing the documents to the buyers for self-registration (Chính phủ, 2014).

Thủ Đức City has a total natural area of 21,156.96 hectares, accounting for 10.09% of the total land area of Hồ Chí Minh City, including 34 wards, with a population of over 1.2 million people, mainly immigrants (People’s Committee of Thủ Đức City, 2023).

Thus, the trend of apartment housing is considered an effective housing solution. In recent years, apartment projects have contributed to addressing the urgent housing needs in this city. However, completing the legal procedures after the project’s completion and putting it into operation still faces many issues, such as project completion, tax and fee allocation, establishment of operating units, and especially the issuance of the Land Use Rights Certificate, Ownership Rights for Housing, and other assets attached to land (Ngọc Hiển and Bảo Ngọc, 2023).

The city currently has many commercial apartment projects that have been put into operation but are still not eligible for the LUR Certificate issuance, leading to numerous and complicated complaints and disputes, creating significant difficulties for state management of land in general and apartment management in particular. Therefore, accurately assessing the situation of the LUR Certificate issuance in these projects to identify the main causes and propose remedial solutions is necessary.

II. RESEARCH METHODOLOGY

1. Overview of the Research Area

Figure 1. Location Map of the Research Area

Thủ Đức City is located at the Northeast gateway of Hồ Chí Minh City, adjacent to the central area of the City, and is connected via Thủ Thiêm Tunnel, Thủ Thiêm 2 Bridge, Thủ Thiêm 4 Bridge, Sài Gòn Bridge, and Phạm Văn Đồng Boulevard. The specific administrative boundaries are:

– East: Adjacent to Biên Hòa City and Long Thành District, Đồng Nai Province.

– West: Adjacent to District 12, Bình Thạnh District, District 1, and District 4.

– South: Adjacent to District 4, District 7, and Nhơn Trạch District, Đồng Nai Province.

– North: Adjacent to Dĩ An City and Thuận An City, Bình Dương Province.

As of 2023, the population of Thủ Đức City is 1,209,771 people, with an average population density of 5,718 people/km². With the gateway position advantages and the available service infrastructure such as university areas, high-tech zones, and the new Thủ Thiêm urban area, along with the framework technical infrastructure systems being completed, such as: Hanoi Highway, Hồ Chí Minh City – Long Thành – Dầu Giây Expressway, Bến Thành – Suối Tiên Metro Line, Phạm Văn Đồng Road, and the new Miền Đông Bus Station, Thủ Đức City’s development is promoted, contributing to the economic growth of the Southern key economic region.

Besides the development potential and benefits enjoyed by investors, businesses, and residents, there are still many issues to address to build an innovative, green, clean, beautiful, and civilized urban area.

2. Research methods

2.1. Data and Document Collection Methods

– Secondary data and documents: The research collects relevant documents and data, including:

– Primary data and documents: The research consults experts, identified as management officials in relevant fields, with 18 questionnaires, including: Officials from the Department of Natural Resources and Environment responsible for apartment housing (2 questionnaires), officials from Thủ Đức City Land Registration Office (2 questionnaires), officials from Urban Management Department (2 questionnaires); officials from Thủ Đức City People’s Committee responsible for construction and urban management related to apartment housing (2 questionnaires); officials from the People’s Committees of 4 wards with selected commercial apartment projects, namely Bình Chiểu, Hiệp Bình Phước, Linh Đông, Bình Thọ, surveying land administration officials and the ward president or vice-president (8 questionnaires); and the Apartment Management Board (2 questionnaires).

The consultation content includes the opinions of relevant management officials on the obstacles and causes in the issuance of land use rights certificates, ownership rights for housing, and other assets attached to land in the research area.

2.2. Statistical and Descriptive Methods

Statistics on commercial apartment buildings in Thủ Đức City include the total number of projects, the total number of apartments, and the number of commercial apartment buildings that have and have not been issued LUR Certificates. Through these statistics, the study synthesizes, analyzes, and evaluates the current situation, identifying existing issues to propose solutions to accelerate the issuance of LUR Certificates in the research area.

2.3. Data Analysis and Processing Methods

Based on the analysis of data on the current situation of commercial apartments and the issuance of LUR Certificates in these projects, the study identifies the factors affecting this work. Subsequently, the Likert scale is used to assess the impact level of several factors. The rating points are determined as follows:

– Strongly disagree: 1

– Disagree: 2

– Neutral: 3

– Agree: 4

– Strongly agree: 5

The rating values reflect the impact levels of the factors. Based on the average rating points from the surveys, five impact levels are determined:

– 1.00 – 1.80: Very low

– 1.81 – 2.60: Low

– 2.61 – 3.40: Medium

– 3.41 – 4.20: High

– 4.21 – 5.00: Very high

The higher the total score, the greater the impact level of the factors.

2.4. Mapping Method

Using MicroStation software to compile and integrate the position map of apartment building projects in Thủ Đức City.

III. RESEARCH RESULTS AND DISCUSSION

1. Current Situation of Apartment Projects in Thủ Đức City

As of 2023, there are 174 out of 182 apartment buildings in operation, of which 134 are commercial apartments. Among the 134 commercial apartments, 89 were built in the period from 2014 to 2023, accounting for 66.4%, as shown in Figure 2.

Figure 2. Structure of Commercial Apartments Before and After 2014

Source: People’s Committee of Thủ Đức City, 2023

Figure 3. Number of Commercial Apartment Projects in Thủ Đức City from 2014 to 2023

During this period, in 2018, the number of projects peaked at 23 projects, corresponding to 14,144 apartments being built. The significant increase in the number of apartments from 2014 to the present is due to the high industrialization and urbanization rate of Thủ Đức City, resulting in a high population density and a substantial housing demand. Additionally, the real estate market began to recover in 2015 and grew strongly from 2018 to 2021, leading to the investment and construction of many commercial apartment projects.

The trend in the number of commercial apartment projects and apartments in Thủ Đức City from 2014 to 2023 shows a significant increase during the years 2014-2018 and a gradual decrease from 2018-2023. One of the main reasons is the legal status of the apartments, which has reduced buyer confidence. The issuance of LUR Certificates and ownership rights for housing and other assets attached to land will clearly reflect the legal status of these projects.

Figure 4. Location Map of Commercial Apartment Projects in Thủ Đức City

2. Current Situation of Issuing Land Use Rights Certificates for Commercial Apartment Projects in Thủ Đức City

Table 1 shows that there are 89 commercial apartment buildings constructed in Thủ Đức City from 2014 to 2023, with a total of 58,108 apartments (corresponding to a construction area of 1,270,597.61 m²). The rate of issuing LUR Certificates is 16,416 certificates, reaching 28.25%.

Table 1. Situation of Issuing LUR Certificates for Commercial Apartment Projects Over the Years

Source: People’s Committee of Thủ Đức City, 2023

From 2018, the number of commercial apartment projects increased significantly (23 projects) with 14,144 apartments, but the rate of LUR Certificate issuance only reached 23.78% and gradually decreased afterwards. By 2021, no certificates were issued due to the COVID-19 pandemic and the period of establishing and consolidating the city’s administrative apparatus, as administrative activities were in transition.

Additionally, fundamental reasons leading to the non-issuance of LUR Certificates include construction not complying with the issued building permits, land allocation tenders involving negative practices and being subject to inspection, examination, or even investigation of violations. Moreover, issues with project transfers, capital contribution for project implementation, changes in land use purposes, and land use during enterprise equitization not in accordance with legal regulations also contributed.

Thủ Đức City has 34 subordinate wards, of which 26 out of 34 wards have commercial apartment projects built and put into operation during the 2014-2023 period (accounting for 76.47%). Among them, An Phú, Thảo Điền, and Phước Long B wards have the highest number of projects and apartments.

Table 2. Situation of Issuing LUR Certificates for Apartment Projects by Ward

Source: People’s Committee of Thủ Đức City, 2023

Table 2 shows that from 2014 to 2023, Hiệp Bình Phước Ward had only 1 project with 1,639 apartments but had the highest certificate issuance rate at 99.45%. Additionally, wards like Hiệp Bình Chánh, Cát Lái, and Thảo Điền had certificate issuance rates over 50%. Notably, projects in wards such as An Khánh (3 projects), Hiệp Phú (2 projects), Tăng Nhơn Phú B (1 project), Long Thạnh Mỹ (1 project), Tân Phú (1 project), Tam Phú (1 project), Linh Trung (2 projects), and Bình Thọ (1 project) have not been issued certificates (0% rate).

The obstacles in issuing LUR Certificates for commercial apartment projects have affected the legitimate rights and interests of businesses and apartment buyers. Therefore, it is essential to accurately assess the current situation and identify specific causes for each project to address the issues and promptly provide reasonable solutions for this task.

3. Identification of difficulties and proposals for issuing land use rights certificates for apartment projects

3.1. Difficulties and Challenges

To date, many projects have been completed and put into use, but residents have still not been issued LUR Certificates for various reasons. For instance, in Linh Đông Ward, a project with 1,154 apartments was completed and operational in 2018, but residents have not yet received LUR Certificates. The main reason is that the investor has mortgaged the project at a bank and has not yet registered to release the mortgage. Additionally, the project has not yet received an appraisal document confirming the eligibility for issuing certificates to homebuyers (People’s Committee of Thủ Đức City, 2022).

According to the survey results from 18 relevant officials, most incomplete projects in the issuance of LUR Certificates face several issues: 88.89% of officials indicated that project mortgages by investors make apartments ineligible for LUR Certificate registration; 100% agreed that investors do not comply with the issued building permits; 88.89% agreed that investors charge fees contrary to initial contracts, leading to disputes. The specific survey results are as follows:

Table 3. Survey Results on the Evaluation of Issuing LUR Certificates for Commercial Apartment Projects

Currently, there are still many projects that have not yet issued LUR Certificates to residents due to various reasons, such as projects incurring land use fees, but the valuation to determine the additional financial obligations of the investor encountering prolonged issues. Some projects have been built not in accordance with the approved building permits, leading to incomplete project completion. Investors mortgaging the project to banks also contribute to the delays. The study summarizes the main reasons as follows:

1. Investors of apartment projects have not completed financial obligations.
2. Investors mortgaged assets at banks before applying for LUR Certificates.
3. Investors delayed or could not complete the project due to construction not adhering to the approved design drawings.
4. Apartment construction has illegal factors (encroaching on the protection boundaries of technical infrastructure works, illegal land use conversion). According to Article 35, Decree No. 43/2014/NĐ-CP, this case is not eligible for ownership certification.
5. Investors have not completed legal procedures, and in many cases, the investor delayed submitting the application for LUR Certificates.

Therefore, it is necessary to have specific solutions to address these issues and improve the efficiency of issuing LUR Certificates for commercial apartment projects in Thủ Đức City and other areas.

3.2. Proposed Solutions for Issuing Land Use Rights Certificates and Ownership Rights for Assets Attached to Land

(i) Solutions for Project Mortgages at Banks

The guarantee by commercial banks (CBs) for housing projects involving future home sales is necessary but requires additional regulations to clarify and ensure customer rights. The guarantee should apply to the entire real estate project and all financial obligations of the investor to the customers, including compensation for damages, contract penalties, and all amounts received by the investor from customers as “reservation fees” or “deposits” to secure contract agreements. Therefore, before the investor receives any money from customers in any form, a guarantee contract must be signed with the CB.

Besides the guarantee regulations, the law should provide additional insurance options from enterprises for parties to choose from. Furthermore, for these assurance activities to be feasible, the financial capacity requirement for investors should be raised to at least 40% of the investor’s total project investment capital (currently 15-20%), and this capital should only be used to demonstrate financial capacity for one project. Regarding the termination of the guarantee contract, regulations should specify the time at which the guaranteed obligations are fully performed, rather than relying on the house handover time as currently regulated.

(ii) Solutions for Taxes and Fees

The State has not yet specified the responsibility of investors to fulfill financial obligations and complete the procedures for the State to issue LUR Certificates to residents. Therefore, the Law on Land, the Law on Real Estate Business, and subordinate legal documents need to clearly stipulate the responsibilities of investors in fulfilling financial obligations and completing procedures for issuing LUR Certificates to apartment buyers.

If the house handover is delayed beyond the contractual 12 months, a penalty of 5% of the transferred apartment value may be imposed. This 5% penalty should continue for subsequent years, thus compelling investors to take responsibility and perform the procedures for issuing certificates to residents. In particular, for cases of construction not in accordance with the issued permits, enforcement actions should be taken, and a 5% penalty of the sold apartment value should be imposed. Investors must then comply with the building permits and promptly issue certificates to residents.

Conflicts over taxes and fees between the relevant parties must be resolved based on the principle of “rule of law” to ensure the rights of all parties. Depending on the severity of the issue, one or more forms of resolution such as negotiation, mediation, or court settlement can be chosen.

(iii) Solutions for Managing Apartment Building Construction

There needs to be clear regulations for regular and ad-hoc inspections, checks, and supervision throughout the project construction process until the project is completed and put into operation. Construction must be strictly suspended for projects that do not comply with the issued building permits. For completed projects that do not comply with the building permits, LUR Certificates should only be issued for the compliant parts. The remaining parts will be considered for LUR Certificate issuance once the investor completes the additional financial obligations or obtains supplementary permits. The Ministry of Construction should assign responsibility to the Department of Construction to manage and inspect apartment building projects.

(iv) Solutions for Handling Violations

The current administrative violation penalties for violations in real estate business are too low (the highest amounting to only 100,000,000 VND to 150,000,000 VND) while business profits in this sector are quite high. As a result, there is no deterrent effect on project investors, so the penalty levels need to be increased. The State needs to clearly stipulate the level of violations that result in administrative penalties, and those leading to prolonged, irreparable issues for commercial apartment projects should be strictly handled, including prohibiting investment registration in this field or criminal prosecution.

IV. CONCLUSION

Thủ Đức City has a high economic development and urbanization rate, with many universities, colleges, along with the high-tech zone and Linh Trung export processing zone, leading to a high population density and significant housing demand, resulting in the development of apartment housing. During the period from 2014 to 2023, 89 commercial apartment buildings were built and put into operation, accounting for 71.2%. The issuance of LUR Certificates for these projects reached only 28.25%, with 12 out of 89 projects not yet granted certificates.

The analysis of data and survey results indicates that the main reasons for this situation include:

– Investors of apartment projects have not completed financial obligations;

– Investors do not comply with the issued building permits;

– Investors mortgaged the project at banks before applying for LUR Certificates;

– Investors charge fees contrary to the initial contracts with buyers, leading to disputes and ineligibility for LUR Certificate issuance.

Based on these findings, the research proposes groups of solutions to improve the issuance of LUR Certificates, including:

(i) Solutions for project mortgages at banks;

(ii) Solutions for taxes and fees;

(iii) Solutions for managing apartment building construction;

(iv) Solutions for handling violations.

It is necessary to continue research in other areas with many commercial apartment projects to identify advantages and limitations in the management and issuance of LUR Certificates.

References

1. Quốc hội nước Cộng hòa xã hội chủ nghĩa Việt Nam, (2013). The 2013 Law on Land. Hà Nội, November 29, 2013.
2. Quốc hội nước Cộng hòa xã hội chủ nghĩa Việt Nam, (2014). Hà Nội, November 25, 2014.
3. Chính phủ, (2014). Decree No. 43/2014/NĐ-CP detailing the implementation of several articles of the Law on Land, detailing conditions for those allocated land, leased land, or permitted to change the land use purpose to implement investment projects. Hà Nội, May 15, 2014.
4. People’s Committee of Thủ Đức City, (2023). Socio-economic report of the city from 2014 to 2022.
5. Quốc hội nước Cộng hòa xã hội chủ nghĩa Việt Nam, (2021). Resolution No. 1111/NQ-UBTVQH14 on the arrangement of district and commune-level administrative units and the establishment of Thủ Đức City under Hồ Chí Minh City, January 09, 2021.
6. People’s Committee of Thủ Đức City, (2022). Official Letter 7117/UBND-QLĐT on enhancing the effectiveness and efficiency in the management and use of apartment buildings in Thủ Đức City. Thủ Đức City, November 22, 2022.

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