As of 2020, the regulations on the conditions for transferring the real estate projects as regulated in the Law on Real Estate Business 2014 have been implemented for more than five (05) years. Accordingly, besides opening up the opportunities for the investors to transfer the real estate projects ("Projects"), these regulations have not been enforced in reality, due to the legal obstacles related to the issues, as follows:

1. The conditions on compensations, site clearance

According to the experts, the conditions on (i) the project, a portion of transferred project have to finished the compensation, site clearance; and (ii) with regard to the case of transferring the entire investment project to build the infrastructure constructions, it is required to finish the building of the technical infrastructure constructions according to the schedule as recorded in the approved project, which is a barrier for investors. Due to the lack of costs to conduct the compensation, site clearance, and build the infrastructure constructions is one of the reasons that lead to the investor's decision to transfer the project.

2. The condition on the Certificate of land use right of the transferred project

For being conducted the transfer, the transferor must have the Certificate of land use right in respect to entire or a portion of the transferred project (the “Certificate”)

However, as analyzed above, the reason for transferring the project usually comes from the lack of the capital. Accordingly, this regulation causes many obstacles for the transferor since the Investor has to pay the land use fees to be granted the Certificate.

3. The condition on the Project which is not disputed or distrained

In addition to the two analyzed issues mentioned above, the requirement of the Project which is not disputed, distrained also causes the barriers to the implementation in reality. Because the concept of a dispute has not been uniformly understood in any particular form, such as a dispute is when the authorized court accepts a dispute over the project's land use right or just the administrative complaint or lawsuit regarding the decision on compensation and land recovery. In fact, there have been cases that the individuals submit the complaint letter, petition letter lasting in respect of the investor of the Project, causing the Project to fall into a dispute and thus not meeting the conditions for transfer.

4. The conditions for the transfer of a part of the Project do not clear

In case when a part of the Project has completed with some the conditions such as (i) compensation, site clearance, (ii) construction of basic infrastructure, (iii) fulfillment of the obligation to payment the land use levy for a part, in which the project transferred of a part of the Project or forced for the whole project need completing is also ambiguous that transferring a part of the Project faces to many difficulties when being implemented in practice accordingly.

If the legal issues are not resolved as mentioned above that the transfer of the Project will have many entanglements and it will be difficult to apply into practice settling this case in the future. Accordingly, we find that to clear problems, it is hereby advised that:

Firstly, it is necessary to allow cases the transferor that (i) is unable to complete the compensation, site clearance or (ii) complete the construction of technical infrastructure works in Project in which can be agreed in contract with the transferee wishing to re-purchase, hereinafter, the transferee is entitled to inherit the obligations and continue carrying out investment and construction procedures which is unfinished. As a result, state agencies can consider the project's capacity and the Agreement for transferring the project to resolve the projects last long for the years by transferring for more capable and experienced investors.

Secondly, in terms of the cost of paying land use levy to apply for granting the Certificate for the Project, this issue can be resolved under the agreement of the parties. Accordingly, after transferring, the transferee can inherit and fulfill the obligations to pay the land use levy to the competent authorities. With regard to the state management, the obligation of paying the land use levy are still implemented fully by the transferee with better financial resources.

With the analysis and proposals mentioned above, we hope that in the coming time, the law on real estate business will be strictly adjusted and follow the reality, in order for the regulations on project transfer will be applied into practice, thereby, maintaining the development of the real estate market in Vietnam in general.