Scores of homebuyers at the 584 Lilama SHB Building project in Tan Phu District, HCMC last week continued calling for compensation as they had not taken over their apartments six years after the guaranteed handover date.

584 Lilama SHB Building has been put on hold for years 

About 60 buyers have either asked for compensation or demanded apartment handovers but the investors including Transport Engineering Construction & Business Investment 584 Joint Stock Company (TECBI 584 JSC) and Lilama SHB Construction & Business Investment Joint Stock Company seem to have turned a deaf ear to their requests.

A customer from Binh Chanh District said that he bought an apartment of 584 Lilama SHB Building project in 2009 at VND635 million. 

The project was then delayed after he had paid half of the contract value.

In a meeting with customers in 2014, TECBI 584 JSC proposed two options for its customers: first, taking back their money over six months and second, completing payments to get their apartments.

Till now, the investors have refunded part of the money for the customers who chose the first option and have not handed over apartments to those agreeing to full payments.

The 584 Tan Kien apartment building, another project developed by TECBI 584 JSC in Tan Binh District, has not been completed as scheduled. 

Block B of the project with 532 units was completed and handed over to the customers in March 2011. 

Meanwhile, Block A with 420 units was delayed when it was 80% complete, and the customers had paid 80-90% of the contract value.

“The investors handed over the apartments to us for temporary residence but sometimes banks sent staff here to seal our apartments because the investors had used their project as collateral to borrow,” said a home buyer at the project.

These two recent cases of delayed property projects illustrate how vulnerable customers are when buying homes at projects developed by cash-strapped investors.

Earlier, customers of PVCLand Corporation’s PetroVietnam Landmark apartment building project in HCMC’s District 2 faced the same problem as the project had been put on hold for years.

The HCMC People’s Court handled the bankruptcy case of PVCLand Corporation but the buyers who paid 80-90% of the contract value are afraid that they will lose their apartments.

Experts said initiating a bankruptcy case for such investors is necessary although it could not ensure full refunds for buyers.

Launching a bankruptcy case helps prevent investors from dispersing their assets. 

However, they will have to pay bankruptcy fee and staff’s salary and fulfill other financial obligations to the State first before paying compensation for their customers.

According to the 2014 law on real estate business which took effect from July 1, 2015, investors need bank guarantees before selling or leasing their projects as banks take responsibility to return money to buyers in case of late apartment handovers.

However, some investors break the regulations by selling their products when they have not secured guarantees from banks. 

Therefore, authorities need to carry out stricter inspections and buyers need to make well-informed decisions on home purchase.

SGT