Nguyen Phuong Thao – Senior Associate

Tran Thi Nhu Quy – Junior Associate

Nguyen Thi My Duyen – Paralegal

Law on Real Estate Business No. 29/2023/QH15 (“Law on Real Estate Business”) has prescribed the principles of using model contracts for real estate project investors and real estate businesses when establishing real estate business contracts. The regulation on applying model contracts is a solution to protect consumers, inheriting the provisions of the Law on Consumer Protection, ensuring the purpose of publicizing information on real estate transactions and markets.

The scope of this article will cover key provisions in the sale and purchase contract for apartment buildings according to Article 44.1 of the Law on Real Estate Business 2023 and Article 12 of Decree No. 96/2024/ND-CP detailing a number of articles of the Law on Real Estate Business (“Decree 96”).

1.      Contents of the Model Contract applicable in the purchase and sale of apartments

Due to the intrinsic differences between sales and lease-purchase, clearly shown through the terms of payment and transfer of contractual rights, Decree 96 no longer combines a single contract form for sales and lease-purchase of apartments similar to Decree 02/2022. Instead, Decree 96 has separated 02 separate contract forms for sales and lease-purchase of apartments.

According to Template no. Ia Appendix I issued with Decree 96, the Model Contract applicable to the purchase and sale of apartments includes 19 clauses with the following contents:

-        Seller information, buyer information

-        Terms and conditions:

Article 1. Interpretation of terms

Article 2. Characteristics of apartments for sale

Article 3. Sales price/Apartment Buyer’s price, maintenance fee, payment method and term

Article 4. Quality of the housing project

Article 5. Rights and obligations of the Seller

Article 6. Rights and obligations of the Buyer

Article 7. Taxes, fees, and related charges

Article 8. Delivery and handover of the apartment

Article 9. Warranty of the apartment

Article 10. Transfer of rights and obligations

Article 11. Private ownership, common ownership and use of apartments in apartment buildings

Article 12. Responsibilities of both parties and handling of contract violations

Article 13. Representation and warranties of the parties

Article 14. Force majeure events

Article 15. Termination of contract

Article 16. Notification

Article 17. Miscellaneous

Article 18. Dispute resolution

Article 19. Validity of the contract

When establishing, signing and implementing a model contract in real estate business, the enterprise doing real estate business must comply with the following principles:

• Real estate business contracts may be used for signing upon publication in accordance with Article 6 of the Law on Real Estate Business 2023 ;
• Comply, execute with the inspection, supervision activities of the competent authority managing real estate business in implementing regulations and principles on publication, usage, establishment, conclusion and implementation of model contracts in real estate business according to the regulations on real estate business;
• Real estate business enterprises are obliged to fully comply, prohibited to change the contents of real estate business contracts issued with the attached template in the Appendix prescribed in Decree 96.

2.       Additional terms that may be supplemented (optional)

Below are some principles for determining clauses, issues that can be added to a Model contract:

• The content of the additional clause must ensure compliance with the principle of non- contravention  of legal prohibitions, non-violation of social ethics, non-inconsistency or contradiction with mandatory provisions in the model contract;
• Ensure that the additional clause reflects the parties’ intent and maintains a balance of rights and interests of the parties. If an additional clause contains provisions unfavorable to the Buyer, pursuant to Article 404 of the Civil Code, in the event of a dispute the agreement shall be interpreted in favor of the other party. Accordingly, this is also an important principle to be observed when drafting optional clauses.
• In case of amendments or supplements to the content of a publicized real estate business contract, the real estate business enterprise shall be responsible for both publicizing the amended or supplemented contract in accordance with the provisions of Article 4 of Decree 96 before using it to sign the contract;

Compliance with the principles of implementing the model contract is very important. In case of violation, investors and real estate businesses may be subject to administrative sanctions with fines ranging from VND 100,000,000 to VND 120,000,000 according to Article 58.1 of Decree 16/2022, remedy to consequences by re-establishing the contract following to the Model Contract, and are responsible for compensating for damages incurred by customers who have signed the contract due to their violations.

The Law on Real Estate Business 2023 and Decree 96, with effect from 01 August 2024, have contributed to further improving the legal framework governing contracts in the real estate sector, with the aim of clearly distinguishing types of agreements, enhancing transparency, and protecting the rights and interests of the parties.

Here is our article about KEY PROVISIONS IN REAL ESTATE BUSINESS CONTRACT UNDER THE LAW ON REAL ESTATE BUSINESS. If you are interested or require legal support regarding electronic identification procedures for enterprises, please visit our DIMAC Website and explore the News Category to stay updated with the latest legal insights and shared market experiences.