Ha Noi has revved its procedures for land-use rights and house ownership certificates, also known as "red books", to buyers of apartments.

 

 

The municipal People's Committee plans to grant 86,500 red books this year.

To be eligible, the apartment must be part of a building with at least two floors. On each floor there must be at least two apartments of at least 30sq m each, consisting of a private bedroom, kitchen and bathroom.

The buildings must have been constructed under a legal licence following the city's urban plan and satisfying other requirements for apartment buildings regulated under Article 70 of the Law on Housing.

Mini-apartment buildings were mostly developed in urban areas over the past few decades for low or middle income earners because of their modest sizes and prices.

They were first recognised as a legal real estate type under Government Decision 71/2010/ND-CP. However, there are controversial opinions about mini apartment buildings. Some argue that because they crowded urban areas, they impact on the urban "face" and add a burden to infrastructure. They also fail to meet safety requirements such as fire fighting facilities. Others say this type of real estate is still alive because it helps meet housing demand.

Nguyen Ngoc Nam, who paid VND900 million (US$42,800) three years ago for a 45sq m apartment on the seventh floor of a mini-apartment building in Phuong Lien Ward, Dong Da District, said he did not expect to be eligible to gain a red book.

"When I decided to buy the apartment, I knew that it was built illegally," he said.

Like many other mini-apartment buildings he had seen, his accommodation lacked a parking area and the narrow access lane prevented access by a fire engine.

Cong An Nhan Dan (People's Police) newspaper quoted an investor in mini-apartment buildings giving an example of why such buildings were a bad investment.

Under current regulations, a building was allowed to occupy up to 60 per cent of land, which meant a poor return on investment, he said. Moreover, investors usually built more floors than they were permitted to do so they had more apartments to offer, thus maximising the return and minimising the cost.

Nguyen Viet Hai, director of Vic Investment Joint Stocks Company, said that transactions relating to mini-apartments were not carried out on a real estate brokerage floor but because of the high demand many investors and consumers had asked the company for brokerage.

"They are aware of the advantages and disadvantages of mini-apartments," Hai said, noting illegality and the high possibility of conflict between buyer and seller because of the vague chance of getting a red book.

"The granting of red books for eligible buyers would make the segment stronger in the consumer's eyes," he said.

However, vice chief of the Ha Noi Construction Inspectorate Tran Viet Ngon said mini-apartment buildings in the city were built illegally because of poor management at ward and commune level.

These grassroots inspectors were expected to detect and punish violations but they had failed, Ngon said.

From the middle of this month, construction inspectors at ward and commune level would cease to operate and their responsibilities would be vested in inspectors from the city's Construction Department.

In a recent online meeting on land-use rights certificates, Ha Noi People's Committee Vice Chairman Vu Hong Khanh said authorities would separate the responsibilities of investors and home buyers when granting certificates.

"The Department of Natural Resources and Environment needs to protect the rights of home buyers and support them to get the certificates if they fulfill their responsibilities to investors and the State," he said.

Investors who violated or delayed fulfilling their responsibilities would be punished, he said, urging authorities to propose strict punishments.

According to the Ministry of Natural Resources and Environment, there were nearly 170,000 land slots and 500,000 apartments which had not received land-use rights certificates in Ha Noi.

Source: VNS