The draft amendment to the 2024 Land Law proposes that in cases where investors have reached agreements on compensation for over 75 percent of a project's land area, the government will assist in reclaiming the remaining land to hand over to the investors.

Explaining the proposal, the Ministry of Agriculture and Environment said the current land law lacks regulations on land recovery when investors fail to reach agreements with all landholders. This has caused significant delays in urgent projects, leaving land idle and investment stagnant.

This proposal is expected to remove key obstacles in site clearance, helping projects proceed more swiftly.

Vu Kim Giang, president of SGO Group, stated that land clearance is one of the most time-consuming and challenging steps for developers.

“In many cases, projects fall into a dilemma though 90-95 percent of site clearance work has been implemented, and only 5-10 percent remain stuck. Many investors have to pay more than stipulated to quicken the site clearance process,” Giang said.

“For smooth projects, it takes six months to one year to complete the land clearance process. However, when agreements can't be reached, businesses often abandon that land area and apply to adjust the project, which wastes a lot of time,” Giang noted.

Giang believes that if the government helps reclaim the remaining land after investors have reached agreements on over 75 percent, it will ease the burden on businesses.

Another businessman agreed, saying the proposal could accelerate large projects while still respecting the initial agreement-based mechanism. It would also encourage companies to negotiate directly with residents, rather than relying solely on forced land recovery. 

Le Hoang Chau, chair of the HCMC Real Estate Association, said  if the proposal is approved, it will help resolve obstacles faced by thousands of projects that have been stuck for years.

“Delays in site clearance result in investors being unable to proceed with projects, locking up capital and leaving land unused,” Chau said.

However, he emphasized that the lawful rights and interests of the minority whose land is recovered must be protected. Compensation, support, and resettlement policies must comply with existing land laws and must not be lower than the prices previously agreed upon by investors and land users for similar land plots with comparable advantages.

The Vietnam Real Estate Research and Evaluation Institute (VARS IRE) also believes that allowing the government to recover the remaining land after 75 percent has been secured by agreement will help balance the interests of both businesses and residents, and reduce tensions caused by a small number of households resisting compensation.

Hong Khanh