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5-star leased apartments and sweet traps   2009-05-04 - Viet Nam Net

Vietnamese people are ready to spend several hundred thousand dollars to own foreign-invested luxury apartments. However, they do not know what will happen in the future, when investors’ land lease contracts expire.

 

Living in leased apartments

 

 
As the living standard of Vietnamese people has improved, more and more people can afford and want to have luxury apartments worth several billion VND.

 

It seems reasonable to spend a ‘mountain of money’ to buy these apartments and enjoy comfortable lives if people can own the apartments forever. However, in fact, the apartments’ owners are living in a state of anxious suspense.

 

The problem lies in the fact that the owners of the apartments can only live in the apartments for a definite time (30 to 50 years) and under strict conditions.

 

Do My Linh, the owner of an apartment on the 10th floor of Pacific Place on Ly Thuong Kiet street, said that before signing the contract on leasing the apartment, she carefully read all the provisions in the contract, and accepted all the strict requirements set by the owner of the building.

 

However, like many other clients, Linh wanted to own the apartment forever, accepting to pay additional money to obtain permanent ownership. However, as the contract is valid for 30 years only, Linh has decided to lease the apartment, instead of living there, to recover the big sum of money she invested.

 

Ngo Dieu Linh, who also owns an apartment in Pacific Place, related that her parents opposed her decision to purchase the apartment. With the same sum of money, Linh could have purchased a luxury apartment at another building with permanent ownership, or a land plot in an advantageous position. However, Linh insisted on purchasing the apartment at Pacific Place because of its advantages.

 

Linh has regretted her decision, because she feels that she is not living in a home. She cannot open the doors freely, put footwear in front of the apartment, and cannot put clothes on the balcony to air.

 

Moreover, Linh does not know if she can extend the apartment lease when the contract expires or spend more money to own the apartment forever.

 

The sweet traps

 

Nguyen Trung P, the owner of an apartment at Pacific Place, related that when negotiating with the building’s investor, he expressed the desire to own the apartment forever. However, he was told that the investor only had the right to lease the apartments, not to sell them definitively.

 

However, after P learned more about the decree on land ownership, he realised that the current laws allow buyers to sign contracts to purchase apartments definitively.

 

P. showed several provisions in the contract on the apartment purchase which he called the ‘trap’. The provisions say that the leasers will make reasonable efforts to ask for permission to sell apartments to lessees, and that the leasers will try to help the lessees to get apartment ownership certificates. However, these are not the duties of the leasers.

 

Nguyen Van K, who has just purchased an apartment in the Lang Viet Kieu Chau Au (European Viet Kieu Village) project, which has seen the construction of its foundation completed, also related that he has purchased an apartment under the mode of 50-year lease.

 

K said that he does not know what will happen in 50 years when the contract expires. At that time, he will either have to give the apartment back to TSQ, the investor of the project; give it back to the state; get the right to lease it for more time; or get permanent ownership.

 

Realising that a lot of people now have the demand for luxury apartments with favourable living conditions, a lot of investors have been offering apartments and setting sweet traps: Instead of selling apartments definitively to people, they lease the apartments under very strict conditions.

 



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