Disputes between apartment buyers, developers in HCM City on the rise
People planning to buy an apartment in HCM City might have to think twice due to the likelihood of disputes with developers, which have been proliferating in recent times.
Le Hoang Chau, chairman of the HCM City Real Estate Association, speaks at a seminar on how to protect apartment buyers’ rights in the city. — Photo vietstock.vn
The disputes between developers and buyers are caused mostly due to legal loopholes, experts said.
According to the Ministry of Construction, more than 200 apartment building projects across the country are currently embroiled in disputes, more than half of them between developers and buyers.
Speaking at a seminar in HCM City last week, Do Thi Ngoc Oanh, who lives in an apartment building on Vo Van Kiet Street in District 1, said there have been a number of disputes over the past decade.
“The most serious problem is the mismanagement by the committee and lack of financial transparency.”
Le Hoang Chau, chairman of the HCM City Real Estate Association (HOREA), said: “It is vital to ensure residents have a convenient, safe and secure living environment. So developers must fulfil the commitments they make in the contract.”
Residents have the right to receive quality apartments, apply for ownership documents within 50 days of signing the contract and elect the members of the committee to manage the buildings, he said.
According to the Housing Law, apartment buyers have to pay 2 per cent of the cost for internal maintenance, and developers have to pass on the money they collect to the management committees within seven days after they are set up. But many delay this, sparking disputes, according to the Ministry of Construction.
The misappropriation of maintenance funds worth hundreds of billions of dong by developers also remains a major problem, Chau said.
Other hurdles include building quality, handover schedules, parking lots, fire prevention, and land-use and house ownership certificates.
There is a discrepancy between existing regulations on apartment building projects and reality, and there have not been timely policies to tackle the increasing number of disputes, he said.
Who protects residents’ rights?
The 2014 Law on Housing spells out the responsibilities of the People’s Committee of wards and districts in resolving disputes between buyers and developers.
The resident committee plays a major role in protecting the rights of occupants, and developers, who must be on the committees, are also responsible for it, he said.
The media plays a role in protecting the rights by highlighting problems and solutions, he added.
The Ministry of Construction has said it is considering a separate law for managing apartment building, but there has been no development yet.
In the case of a dispute, the best solution is for customers and developers to have a constructive dialogue in the spirit of co-operation and consideration for each other’s rights and benefits to reach a mutually agreeable solution, experts recommended.
Recently a major dispute broke out after a woman from Hanoi’s Cau Giay District told the media she had been refused entry to her three apartments in a project in HCM City’s Nha Be District.
She said in 2017 her son bought three units in the Phu Hoang Anh apartment project developed by the Phu Hoang Anh Joint Stock Company, and was granted ownership documents by the city Department of Natural Resources and Environment, but was never able to enter them since the management committee blocked the apartments and the elevators.
In response, the committee said the design of the building approved by the Department of Construction in 2008 has no second floor where the apartments are situated, and the developer had failed to conform to the design.
Nha Be District authorities have however rejected this argument, and the case is now under investigation.
High-rise apartments are rapidly gaining popularity as urban populations rise while lands remain limited.
HCM City has more than 1,440 apartment projects, of which 474 were built before 1975, according to the ministry.
More than 100 buildings in the city face problems related to disputes between developers and buyers, according to city authorities.
With the economy been hit hard by Covid-19, the HCM City real estate sector has been facing difficulties. However, there are still bright spots.
As conflicts between high-rise apartment developers and their residents increase, some developers are struggling to improve their professionalism in building management.