New regulations on handling administrative violations in construction activities

On 24 April 2018, the Ministry of Construction issued Circular No. 03/2018/TT-BXD ("Circular 03") elaborating on a number of articles of the Government’s Decree No.139/2017/ND-CP dated 27 November 2017 on penalties for administrative violations against regulations on investment and construction; extraction, processing and trading of minerals used in construction, production and trading of building materials; management of infrastructural constructions; real estate business, housing development, management and operation of apartment buildings and office buildings (“Decree 139”).

Of note, Circular 03 regulates suspension of the Construction Permit of organizations and individuals committing acts of violation in the field of construction investment from twelve (12) months prescribed in Article 15.9 of Decree 139 to various periods ranging from three (03) months to twelve (12) months, depending on the types of construction violation. Accordingly, violating individuals, organizations are not allowed to organize construction during the suspension of their Construction Permit.

In addition to penalty for administrative violation, Circular 03 also details measures to demolish the construction work or work items built inconsistently with law regulations. Such demolition must be carried out according to the approved demolition plan or solution until the bearing capacity of the remaining work item is ensured when it is put into operation. The investor must prepare, appraise, submit for approval and implement the plan or solution for demolition of such construction work or work items as prescribed by law regulations. If the investor is not proactive in demolishing such construction work or work items, enforcement measures will be taken. The investor then is obliged to pay all costs of taking enforcement measures for demolishing the construction work or work items built inconsistently with law regulations, including costs of preparing, verifying, granting approval and implementing the demolition plan or solution.

Circular 03 will come into effect on 12 June 2018.