|Speakers at a workshop in HCM City discuss the legal framework needed for the condotel property segment. (Source: VNA)
Speaking at a seminar in Ho Chi Minh City on December 17, Luong Hoai Nam, member of the Tourism Advisory Council, said that condotel investment would continue to be attractive because of fast-paced development in tourism infrastructure.
However, investment remains risky because of the “lack of a legal framework, limited ownership period (often 50 years), and lack of management capacity of the developers”, Nam said.
No condotel project in Vietnam has been granted an ownership certificate, which has caused problems for investors and state management agencies.
Le Hoang Chau, Chairman of the HCM City Real Estate Association (HoREA), said it was important to protect the rights of investors. “We think that an ownership certificate should be issued for each condotel.”
He said there was no need for a new law, but current laws need new content to ensure the rights of investors.
The law should clearly stipulate the conditions for raising capital for future condotel projects. These would include construction permits and complete infrastructure systems before the sale of the units.
The condotel projects must also be guaranteed by a bank, Chau said.
In Vietnam, developers often pre-sell condotels and then use the money from buyers to complete project construction.
Mai Van Phan, Deputy Director of the Land Administration under the Ministry of Natural Resources and Environment, said that under the Tourism Law, a condotel means a hotel condo operating as a hotel which is a service business and does not have a residential purpose.
“Land for building condotels is categorised as land for lease for production and business within a period of only 50 years, not for residential purpose (which is longer term), so it’s impossible to grant long-term ownership certificates for such condotels,” he said.