(Chinhphu.vn) – The Democratic-Legal Advisory Council (the Central Committee of the Vietnam Fatherland Front) has just held a conference to collect opinions and criticisms of experts, scientists and managers on the draft Law on Real Estate Business and the revised Housing Law.

Why do individuals and individuals when dealing in real estate transactions have to be notarized, while organizations that are real estate businesses with individuals do not? This poses many potential legal risks for homebuyers and the fact has proven that when there is a dispute, homebuyers are always at a disadvantage.

Many legal risks

One of the issues that many delegates focused on discussing at the conference was that the draft revised Law on Real Estate Business this time still left the above-mentioned inadequacies.

Referring to this issue, Prof. Dr. Nguyen Thi Nga, Deputy Dean of the Faculty of Economic Law (Hanoi Law University) analyzed: In Clause 3, Article 45 of the draft Law on Real Estate Business that is not required to be notarized, it does not guarantee legal security for citizens. Because real estate is a great asset and has high value for them, but real estate products of real estate businesses involve a lot of documents, legal procedures, business conditions, and the power of the investor, etc. is very complicated, but not everyone can check and control it, not everyone is clear about the law on land, real estate business, housing, investment. Therefore, the notarization in this case will have a controlling role in warning and preventing risks for citizens.

Accordingly, regulations on real estate through the exchange operate with some functions “similar” to notarization activities, while real estate transactions with requirements on competence and expertise in certification are issued will not be able to guarantee the legal safety of people when buying, selling and transferring real estate through the floor.

This does not include the real estate exchanges in the past time set up mainly to sell real estate to the business that established that floor. Therefore, this is not guaranteed to protect the legitimate interests of the people.

Ms. Nguyen Thi Nga believes that, when comparing the business operations of entities operating on the real estate exchange with notarization, the notary publics are formally trained with strict requirements for input/output standards. As such, their operations are more secure and reliable than those of employees working on the real estate exchange.

Sharing the same view, the Chairman of the Notary Association of Vietnam Nguyen Chi Thien said that Article 167 of the Land Law and Article 122 of the Housing Law regulate contracts and transactions related to the transfer of land use rights and house ownership such as purchase, sale, donation, capital contribution, etc., must be notarized and authenticated to ensure legal safety, legal rights and benefits of individuals and organizations because this is a group of contracts, transactions contain many risks, disputes can occur at any time.

According to Clause 2, Article 17 of the current Law on Real Estate Business stipulates that a real estate business contract must be made in writing.

The notarization and authentication of contracts shall be agreed upon by the parties, except for contracts on purchase and sale, lease purchase of houses, construction works, and contracts on the transfer of land use rights in which the parties are households or individuals specified in Clause 2, Article 10 of this Law must be notarized or authenticated.

Mr. Nguyen Chi Thien said that such regulation is not consistent with the policy of developing a public, transparent, stable and sustainable real estate market. This can be a “backward step” to create privileges and benefits for real estate trading floors.

The provisions in Clause 3, Article 45 of the current draft Law on Real Estate Business are not appropriate which should regulate that “real estate business contracts, real estate service business contracts must be made in writing. The notarization and certification of contracts for real estate business contracts must comply with the law on notarization”.

Such regulation will clearly delineate, the scope and boundaries of the Law on Real Estate Business, the Law on Notary and other relevant laws. The Law on Real Estate Business regulates the issues of real estate business, and the Law on Notary regulates the issues of notarization.

The real estate trading floor should not be used to replace the notarization and certification

The draft Law on Real Estate Business stipulates that notarization and authentication are not required for transactions, purchase, sale, or lease-purchase of houses in which one party to the transaction is a real estate business enterprise of the draft Law on Housing (modified). This transaction will also have many potential risks, disputes may occur at any time, does not guarantee the rights and interests of the parties to the transaction, is not legal, and harmonizes benefits of the State, businesses and people.

Therefore, Mr. Thien suggested that the regulation that is not required to be notarized and authenticated for contracts in the real estate business clearly does not guarantee the rights and interests of the parties and legal safety. If there are risks happening, home buyers are often weaker than businesses.

In addition, some delegates said that the above regulation shows the unfairness between entities when participating in transactions.

Specifically, for individuals receiving real estate transfer, donation or inheritance, the contract must be notarized and authenticated, while individuals dealing with real estate business organizations being enterprises are not required to notarize and authenticate. It would be not fair and does not guarantee legality when performing real estate transactions.

Prof. Dr. Phan Trung Ly, former Chairman of the National Assembly’s Legal Committee, suggested that the drafting committee and relevant agencies review the legal system, especially the Land Law, the Law on Real Estate Business, and the Law on Housing, the Law on Notarization aims to ensure legal protection, protect property rights, human rights and citizens’ rights, ensure the constitutionality, legitimacy of the law, and fairness among subjects participating in real estate transactions as well as to protect the weak side of real estate transactions.

“The real estate trading floor should not be used as a substitute for notarization and authentication”, Prof. Dr. Phan Trung Ly said.

                                      Source: Le Son – Government Electronic Newspaper