The Law on Real Estate Business comes into effect, how to pay for future home purchases?

Article 25 of the 2023 Law on Real Estate Business on payment in the purchase, sale, hire-purchase of houses and future construction works stipulates that payment in the purchase, sale, and hire-purchase of houses, construction works, and the floor area of ​​future construction works can be made multiple times.

The first time must not exceed 30% of the contract value including the deposit, the following times must be consistent with the construction progress but the total must not exceed 70% of the contract value when the house, construction work, and construction floor area in the construction work have not been handed over to the buyer.

In case the seller is an economic organization with foreign investment capital as prescribed in Clause 4, Article 10 of this Law, the total amount shall not exceed 50% of the contract value.

In addition, payment for the lease purchase of houses, construction works, and construction floor area in future construction works is made in installments, the first payment not exceeding 30% of the contract value including the deposit.

Subsequent payments must be consistent with the construction progress until the handover of the house, construction work, and construction floor area in the construction work to the lessee, but the total amount of advance payment to the lessor must not exceed 50% of the contract value for the lease purchase of the house, construction work, or construction floor area in the construction work.

The remaining amount is calculated as rent to be paid to the lessor within a certain period as agreed in the contract.

In addition, the law stipulates that if the buyer or hire-purchaser has not been granted a certificate of land use rights or ownership of assets attached to the land in accordance with the provisions of the law on land, the seller or hire-purchaser may not collect more than 95% of the contract value;

The remaining value of the contract is paid when the competent state agency has issued a certificate of land use rights and ownership of assets attached to the land in accordance with the provisions of the law on land to the buyer or hire-purchaser.

In addition, Article 26 stipulates guarantees for the sale and lease-purchase of future housing, requiring real estate project investors, before selling or leasing future housing, to obtain approval from a domestic commercial bank or a foreign bank branch legally operating in Vietnam to issue a guarantee for the investor's financial obligations to the home buyer or lessee when the investor fails to hand over the house as committed in the contract for the sale or lease-purchase of future housing.

The financial obligations of the investor to the buyer or lessee of the house when the investor fails to hand over the house as committed to the buyer or lessee in the contract for sale or hire-purchase of the future house include the amount the investor has received in advance from the buyer or lessee and other amounts (if any) as agreed in the signed contract for sale or hire-purchase of the future house that the investor is obliged to pay to the buyer or lessee when the investor fails to hand over the house as committed.