Home Business Proposal to publicize the project to receive deposits to raise capital

Proposal to publicize the project to receive deposits to raise capital

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Ho Chi Minh CityThe Department of Construction recommends publicizing legal information on projects that raise capital by deposit to prevent risks for buyers.

According to the report on the real estate market situation of the Department of Construction of Ho Chi Minh City, the pandemic that broke out strongly from the beginning of 2020 to the middle of this year has seriously affected all socio-economic aspects. The city’s real estate market also declined, the pace slowed down, but many violations still occurred in business activities.

In the first 6 months of the year, the real estate market in Ho Chi Minh City still had the situation that the project had not completed legal procedures, but the investor had made a deposit, kept the place, promised to buy and sell. Project developers, investment cooperation, business cooperation units… have signed housing purchase and sale contracts with customers but do not disclose or disclose incomplete or dishonest information about real estate. products according to regulations.

In the face of this negative side, the Department of Construction proposed the Ho Chi Minh City People’s Committee to direct relevant departments to publicize legal information about projects to prevent illegal business activities.

Survey of VnExpress It also shows that the cases of depositing to buy a house or land on paper with a value of up to hundreds, even billions of dong, are still quite common in Ho Chi Minh City and surrounding areas. Sellers often use deposit contracts to mobilize this capital flow of customers even though the project has not yet built the foundation or the infrastructure is still scattered. Cases of depositing to buy land (house) with a large value can be risky because of the Law’s lax regulations and lack of sanctions on this behavior.

Real estate market in the East of Ho Chi Minh City. Photo: Quynh Tran

Before that, the Ho Chi Minh City Real Estate Association (HoREA) also repeatedly proposed a series of solutions to prevent risks and risks for customers when depositing too much money to buy land.

Specifically, in Clause 1, Article 328 of the Civil Code, there is a preliminary mention of the act of depositing for the purpose “to secure the conclusion or performance of the contract before the time of signing the contract. However, the Business Law. Real estate without regulations on “deposit” is a notable inadequacy because this is too big a legal loophole.

HoREA said that taking advantage of this loophole, traders selling land plots formed in the future illegally, using methods such as: deposit agreements; capital contribution agreement; investment cooperation agreement… with a large deposit value, causing risks for customers. While the Law on Real Estate Business stipulates that after signing the contract, the investor of a future real estate business project can only receive the first payment from the customer not exceeding 30% of the contract value.

Clause 1, Article 328 of the Civil Code stipulates that “Deposit means the depositor’s handing over to the depositee an amount of money or precious metals, gems or other valuables for a period of time to secure the contract or contract performance”.

This association recommends that deposit behavior when buying real estate should be regulated, even specifying sanctions in new specialized laws to ensure safety for buyers. For example, a deposit” to secure the conclusion of a contract to purchase and sell real estate formed in the future (including land plots), must both comply with the provisions of the Civil Code and comply with the provisions of the Civil Code. of the new Law on Real Estate Business strictly.

In addition, the Civil Code currently does not stipulate the ratio or limit of the deposit value to the value of the contract (or the contract expected to be entered into), which is agreed upon by the parties themselves. Taking advantage of the lack of synchronism of the legal system in this case, the real estate developers illegally formed in the future, agreed to deposit with customers and received a deposit of great value. damage to the customer.

According to HoREA, accepting a large deposit is also not consistent with the provisions of the Law on Real Estate Business. Because, this Law stipulates that investors of real estate projects to be formed in the future may only collect for the first time no more than 30% of the contract value. But in fact, there are many cases of selling land (houses) with deposit far exceeding this rate. If the project has a problem, customers may be buried with large capital flows, even falling into a weak position if they want to claim their money back because the law lacks sanctions and regulations on deposit behavior are too lax.

Trung Tin

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