Risks of depositing land for projects in Dong Quang and Duc Xuong (Gia Loc)

"Blind eyes" investment

Hai Duong Newspaper received information from Ms. NTN in Thanh Mien town. In early April 2024, she and her husband learned about the investment project to build a new residential area in Dong Quang and Duc Xuong communes (Gia Loc) invested by Phu Thanh Investment Group Joint Stock Company located in Trung Hoa ward, Cau Giay district, Hanoi (Phu Thanh Company).

On April 14, 2024, Ms. NTN and her husband signed the "registration of wishes", which included information about the land lot, total value of the land lot, deposit amount, and content about the contract signing period to pay 20% of the land lot value. The registration includes the confirmation of Phu Thanh Company with the company seal, title seal, and signature of Mr. Nguyen Dinh Toan, Director of the company.

According to our research, the above “aspiration registration form” is actually a deposit by people to reserve a place. The registration form states: By April 29, the contract will be signed and the exact 20% of the land value (including the deposit) will be paid. In case the registrant does not come to sign the contract and pay the company as committed, the deposit will be lost.

On May 7, 2024, Ms. N. and her husband went to the company office to sign the contract and were ready to pay 20% according to the content of the above registration of wishes, but instead of providing a sales contract, Phu Thanh Company's office provided a "loan contract". The content of this contract only mentioned that Phu Thanh Company borrowed money to "serve production and business activities", along with some content about interest rates, loan terms, and there was absolutely no mention of the above real estate or real estate project. Therefore, Ms. N. and her husband did not agree to sign this contract and requested to return the deposit for the 2 plots of land. According to the documents provided by Ms. N., the amount of money she and her husband deposited was 255 million VND.

Legal risks

Read the content in the "Application for registration of wishes", in the confirmation section of Phu Thanh Company, it is stated that "The Company will carry out the above registration procedures to include it in the registration list and carry out the following procedures for the registrant according to the provisions of law when the project is eligible for real estate transactions". That means when the project is eligible for transactions, Phu Thanh Company will carry out the next steps.

But according to some documents we have collected, on May 15, 2024, the Department of Construction sent a document to the People's Committee of Gia Loc district regarding the inspection and verification of information related to the investment project to build a new residential area in Dong Quang and Duc Xuong communes. The Department requested Gia Loc district to organize the inspection, verification of information and promptly and strictly handle organizations and individuals who sell goods and mobilize capital in violation of the law. The investor is required to have a written commitment not to mobilize capital or conduct business without meeting the conditions, and to have a notice board at the project stating that the real estate product has not been put into business.

One day later, on May 16, 2024, Gia Loc District People's Committee sent a document to the District Economic and Infrastructure Department, the People's Committees of Dong Quang and Duc Xuong communes and Phu Thanh Company, requesting the company to be responsible before the law if it sells goods without meeting the conditions, illegally mobilizes capital, and at the same time requires this company to install a notice board in the project implementation area by May 23, 2024 at the latest to clarify that the company has not put real estate products into business without meeting the conditions.

But by the afternoon of August 26, 2024, when we were present at the project site, we did not see any notice board showing the content according to the above requirements, including in front of the office area of ​​the Management Board of the new residential construction investment project in Dong Quang and Duc Xuong communes. In the role of a person in need of buying land, I contacted the phone number 097.959.xxx published on the sign at the project gate and still received the information: "We are the project investor, we have been selling for 3 months now. We currently have a discount for customers, but it only lasts until the end of this month" from the other end of the line replied.

We called the phone number 039.2050.xxx listed on the business registration certificate (information extracted from the National Business Registration Portal), but received the answer that this phone number does not belong to Phu Thanh Company or the Director of this company!?

At the Management Board of the new residential area project in Dong Quang - Duc Xuong communes (Phu Thanh Company), we were welcomed by an employee named NHT, but could not meet anyone who could answer the press. After providing preliminary information about the people's reflection "having deposited to buy land of the project but having related problems and not being able to get the deposit back", Mr. T. said that he would report to the company's leaders and notify us of the meeting schedule. However, after more than 5 days, we did not receive any specific information about the work schedule.

According to the Department of Construction, by August 30, 2024, the new urban area project in Dong Quang and Duc Xuong communes (Gia Loc) has not met the conditions for commercial operation. Therefore, any business activities at this project are illegal.

Lawyer Nguyen Kieu Dong, Head of A Dong Law Office (Hai Duong City) said: "If there is a receipt and the content of that receipt matches the registration of wishes, it can be concluded that the investor of the above project violated the provisions of the law on investment and real estate business, because it collected a deposit when the land use rights of the project did not meet the conditions for transaction. On the contrary, if there is no receipt or there is a receipt but the content of the receipt does not clearly state the collection of money according to the registration of wishes, it cannot be concluded that the investor violated the law," said lawyer Dong.

In cases like NTN’s couple, if there is no receipt for payment according to the registration of wishes, they need to meet with the investor to request a refund. If the investor does not pay, they can request the competent authority to consider according to the provisions of the law, or file a lawsuit in court.