On 20 May 2020, the Ho Chi Minh City Department of Construction (the “DOC”) has issued the Official letter No. 5290/SXD (the “Official letter No. 5290”) to propose steps of the legal process for implementation of commercial residential houses projects, submitting to Ho Chi Minh City People’s Committee (the “People’s Committee”) and relevant authorities for discussion and comment. This is the second official letter following the Official letter No. 2363/SXD-PTĐT dated 06 March 2020 addressing problematic legal procedures applied to commercial residential housing projects, and in part promoting the real estate market adversely impacted by the Covid-19 pandemic in Ho Chi Minh City.

It could be seen that in the Official letter No. 5290, the DOC has acquired comments of Ho Chi Minh City Real Estate Association (the “HOREA”), specifically (i) the reduction of implementing procedure from 5 steps to just 4 steps by allowing enterprises to simultaneously conduct some procedures, and (ii) the adjustment to conduct the procedure of “paying the land use fee and other financial obligations” after the enterprises has been recognized as project developers under the laws on residential housing. These adjustments are in line with the actual status of project implementation and capital management of real estate enterprises.

However, the steps set forth in the Official letter No. 5290 has not yet been consented to by some agencies, namely HOREA, since:

1. Though the process is proposed to be only 04 steps, as the matter of specialized laws, the procedures therein required to be step-by-step, not simultaneously, conducted. Hence, the merger of procedures is still impractical; and

2. The timeline set forth in the Official letter No. 5290 only includes those applied to procedures at the DOC, and providing that the feedback/result is timely issued, according, excludes timelines for procedures at the Department of Natural resource and Environment, the Department of Finance, and the Tax Department. Hence, the timeline for the whole process, in principle, remains unchanged, without any reduction [1].

The proposal is currently commented and discussed by relevant authorities and agencies, yet it draws an optimistic sign showing the People’s Committee has listened the opinions of enterprises and HOREA, and accordingly, shall instruct relevant authorities to soon introduce the unified collaborating process for implementation of legal procedures applied to commercial residential housing projects, which promotes the real estate market.

[1] https://nld.com.vn/kinh-te/rut-ngan-quy-trinh-du-an-nha-o-van-mat-hon-18-thang-de-xin-cap-phep-20200609110958616.htm