The policy of "residential and another land" provides "collective advantages"

DNHN - A real estate and investment law expert named Nguyen Van Dinh says that the current policy of "residential property and another land" encourages "legalization" and "suddenly" helps a set of owners.

According to investment and real estate law expert Nguyen Van Dinh, when assessing the issue of "residential land" for commercial home building and the efficacy of policy formation, the difficulty of utilizing the land to accomplish the project.

Commercial housing has piqued the interest of real estate companies throughout the preparation and construction of the draft law amending 9 laws (approved by the National Assembly at the special sitting in January/January 2022). 

In addition to supporting the change of Clause 1, Article 23 of the Housing Law to remove barriers to commercial housing projects, some delegates suggested adding a type of non-residential land use to allow commercial housing projects to happen. They think this could lead to policy profiteering and a loss of money for the state budget.

As a consequence, the National Assembly's special session opted not to include the form of utilizing non-residential property to develop commercial housing projects, resulting in the use of the "civil mechanism" to implement housing projects. Commercial and urban areas remain clogged.

As a result, if the real estate firm has achieved an agreement with the landowners to obtain the transfer, lease, or capital contribution with land use rights but there is no residential property in the collected land area, the government is not entitled to acquire residential land. Under Clause 4, Article 29, of the Law on Investment 2020, the country has given the go-ahead for a commercial housing project to be built.

According to Mr Dinh, the Investment Law and the Land Law both enable and encourage investors to agree to transfer, lease, and receive a capital contribution of land use rights for project execution, although this provision has yet to be implemented. This is utilized when an investor develops a commercial housing project but there is no residential property in the gathered land area.

The reason for this is that Clause 1, Article 23 of the Law on Housing 2014 (as modified by the Law on Investment in 2020 and further altered in the Law on Amendment 9 to the Law in 2022) specifies the kind of land use required to carry out housing developments. Commerce.

For project execution, the investor must have the right to use residential property; or residential land and another land that meets the parameters for altering land use purposes. Because of this law, hundreds of commercial housing projects can't be built because investors "bought land" but couldn't build because of a "dilemma."

Furthermore, under the current policy formulation in Article 23 of the Housing Law, if firm A transfers, leases, or gets capital contribution of land use rights to "collect" 100 hectares of land, Even though the project conforms with the plan, it cannot be carried out on a 100-hectare site if there is no residential property nearby.

To "react," business A will want to "purchase jointly" an additional home in a neighbouring place to get a portion of residential land. And if firm A is successful in purchasing a home with just 30m2, it is authorized to be the investor in a commercial housing project with an area of 100ha+30m2. Because, under present law, investors just require a proportion of residential land, maybe 1 per cent, 0.1 per cent, or 0.01 per cent, to be permitted to build a housing project. Commerce.

As previously said, a good policy must encourage firms to adopt compliance with a positive attitude. On the other hand, a policy that forces businesses to "dodge" or "variable" by buying an extra 30m2 to make up for 100ha won't be successful or useful.

In the above example, who gains from the policy? Because the project grew by 30m2 with nearly no increase in land use fee income, the state did not profit more. Enterprise A may carry out the project, but it must accept the purchase of an extra 30m2 dwelling at a price higher than the market price for the express purpose of legality (because an additional 30m2 of plots will make the land distorted and unsuitable).

Construction work on a 30m2 area is possible. Individual B, who owns a 30m2 property, suddenly wins because he can ask for a "heavenly" price because he knows that firm A must buy it no matter what.

As a result, the existing policy of "residential land and another land" has not yet reached the criterion that a legal policy should have, which is to urge those affected to comply positively and those who comply positively. This positive will have a direct impact on the policy's value. In contrast, the existing policy of "residential land and another land" pushes "legalization" using the same formula as 100ha+30m2, and that "legalization" favours a certain set of people.

Hoang Ha