The Ministry of Construction received a petition from citizen N.A.H on the Information System for receiving and processing feedback on legal normative documents of the Ministry of Justice related to regulations on penalties for violations in real estate transactions.
According to the reflected content, citizens said that the overlap and different understandings of violation penalties and violation penalties. The Real Estate Business Law only mentions violation penalties (Article 18, Article 47, Article 52), without specifying the specific level of penalties. Therefore, if considering the purchase and sale of apartments between investors and non-business individuals as a civil transaction, the level of violation penalties is agreed upon by the parties (Article 418 of the 2015 Civil Code), without limiting the level of violation penalties.
Meanwhile, Article 301 of the 2005 Commercial Law stipulates a maximum penalty of 8% of the value of the violated obligations. So, a legal entity investing in construction and selling commercial apartments for profit-making purposes for individuals to buy for living at the time of contract conclusion or after contract conclusion, that individual intends to lease, if a dispute arises to the Apartment Purchase and Sale Contract (assuming the purchase and sale contract meets the conditions for civil transactions to take effect), will the penalty for violation be applied according to the 2005 Commercial Law or the 2014 Real Estate Business Law as agreed in Article 418 of the 2015 Civil Code?
After research, the Ministry of Construction has the following opinions:
1. Clause 1, Article 45 of the 2023 Real Estate Business Law stipulates: "Organizations and individuals when establishing real estate business contracts and real estate service business contracts must comply with the provisions of the law on real estate business and the Civil Code".
2. The Real Estate Business Law 2023 stipulates that types of real estate business contracts must have content agreeing on penalties for contract violations in Article 46; there is no content regulating the application of penalties for contract violations. At the same time, acts of violating regulations on real estate business contracts are not specified in Decree No. 16/2022/ND-CP regulating penalties for administrative violations in construction.
3. The 2015 Civil Code stipulates the settlement of disputes related to the implementation of real estate purchase and sale contracts in Article 148, specifically:
Article 418. Violation penalty agreement
1. A fine for violation is an agreement between the parties in the contract, according to which the violating party is obliged to pay a sum of money to the violating party.
2. The level of fine for violation is agreed upon by the parties, unless other relevant laws stipulate otherwise.
3. The parties may agree that the violating party is only subject to a violation penalty without compensation for damages or must both bear the violation penalty and compensate for damages. In case the parties have an agreement on the violation penalty but do not agree on both bearing the violation penalty and having to compensate for damages, the violating party is only subject to the violation penalty".
Based on the above regulations, it is proposed that citizens study and implement them according to the provisions of law.
