Investors procrastinate, homebuyers find ways to save projects themselves
Newly updated information from the Ho Chi Minh City Real Estate Association (HoREA) shows that 120 more projects have been registered by businesses on the list to remove obstacles and difficulties because they are backlog projects in the field of private investment, FDI, PPP prolonged in the city. Among them, many projects have had to stop construction for decades and still have no direction.
For example, the case of the high-rise apartment building Block 11. A, 11. B, 11. C and 1. E belonging to Dong Tang Long New Urban Area invested by the Compensation and Relocation Joint Stock Corporation has been approved for investment policy from 2009, and in 2016 it was recognized as the investor and approved for investment with progress until 2020. Currently, the project has completed the necessary legal procedures, and is eligible to submit applications for construction permits and start construction.
However, due to the prolonged review process for the land allocation mechanism and implementation method, the project has not yet carried out procedures for land allocation and land use purpose conversion to deploy construction. The prolonged handling of obstacles for many years has incurred costs for businesses, causing waste of land resources.
Even, there are cases where projects are "suspended" for too long, while the investor no longer has the ability to implement the project, forcing customers to voluntarily send petitions to the leaders of the Ho Chi Minh City People's Committee to apply a special mechanism according to Resolution 29 of the National Assembly to remove obstacles for the project.
That is the case of nearly 400 customers who bought land plots at the Bac Rach Chiec Residential Area project who jointly signed and collectively proposed to the leaders of Ho Chi Minh City and the Department of Finance to apply a special mechanism according to Resolution 29 of the National Assembly to remove prolonged obstacles at this project.
It is known that the project was assigned by the Prime Minister to be implemented from 2001 but has been prolonged for 25 years, going through many inspection conclusions but has not been completely resolved.
The reason is that the project is involved in many violations, Real Estate Joint Stock Company 10 (under Saigon Real Estate Corporation) is the main investor of the project and does not have enough capacity to implement it, causing the project to still not have completed compensation and infrastructure.
Not only that, the project with more than 1,000 land plots has been "cut land" by Real Estate Joint Stock Company 10 for other businesses to jointly implement the project such as: Saca Investment and Development Joint Stock Company, Automobile Transportation Trading and Service Enterprise 6, Him Lam Joint Stock Company, Ky Lam Housing Business Construction Trading Joint Stock Company. These businesses then signed land sales contracts with people even though they did not meet the conditions.
Up to now, most customers have paid money, only a few have received land plots to build their own houses, most have not received land, have not been built houses. While the project is abandoned for a long time, the infrastructure is seriously degraded, causing great waste of social resources.
Another project is Hong Linh Residential Area in Nha Be commune, Ho Chi Minh City, which was implemented from the early 2000s, but then many problems arose related to planning, technical infrastructure, financial obligations and land legal procedures. The project has been stalled for more than 26 years but has not yet been able to complete the legal procedures to issue pink books to customers who have bought land plots, leading to not being able to build houses while they have paid almost the entire contract value.
Flexible mechanisms are needed to remove obstacles
Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association, said that in many projects where investors "disappear", no longer have the capacity to implement projects or delay fulfilling their obligations, customers have directly filed petitions to departments and branches to put projects on the list to remove obstacles.
For these projects, HoREA proposed that the city may consider an inter-sectoral mechanism between departments and local authorities to review the entire legal status of the project, clearly identify which parts are eligible to complete procedures, which parts still have obligations to be overcome, and which parts need to be additionally handled according to regulations.
For cases where actual transactions have existed for many years and infrastructure has been used stably, functional agencies can study the mechanism for completing financial obligations in stages instead of letting the entire project continue to be "suspended" indefinitely. If customers have paid enough money, they can consider building and issuing pink books to ensure the interests of bona fide third parties.
