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Sunday, June 16, 2024

Timing for deposit contracts

By PhD Duong Thi Chien – JD Nguyen Thi Hoan

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The National Assembly is currently considering two proposals regarding the time when property developers can enter into deposit agreements with prospective buyers. The first proposal advocates that property developers should only be allowed to collect deposits from buyers when the residential property or construction project meets all the conditions necessary for commercial operation. Conversely, the second proposal suggests that property developers can accept deposits based on mutual agreements with customers once the project has an approved foundational design and the developer holds any of the required documents specifying land use rights, as stipulated in Article 24 of the draft Real Estate Business Law. This approach would also require that the deposit agreement clearly specify the selling price or rent for the property or construction project. Furthermore, the maximum deposit amount would be regulated by the Government, ensuring it does not exceed 10% of the property’s selling price or rental cost and keeping it in line with the prevailing economic and social development conditions for each specific period and type of real estate. The key distinction between these two proposals lies in the time when property developers can engage in deposit agreements with customers. The first proposal requires that the project […]
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