ISSUANCE OF OWNERSHIP CERTIFICATE IN CONDOTEL CONSTRUCTION

The apartments in the condotel are shared between the owners and can be rented out as a hotel, providing income benefits to the owners. However, the condotel project is facing many controversies and legal obstacles, especially in the management, operation and distribution of profits among owners.

1. The concept of Condotel:

Condotel is a type of real estate combining apartments and hotels. The name condotel is composed of two words "condominium" (apartment) and "hotel" (hotel). The apartments in the condotel are shared between the owners and can also be rented out as a hotel. This benefits those who own apartments when it is possible to earn income from subletting it to tourists.

Hotel services and facilities are also provided in the condotel such as swimming pool, gym, restaurant, bar, spa and other leisure activities.

2. Conditions for issuance of certificates:

Decree 10/2023/ND-CP has supplemented Clause 5 Article 32 of Decree No. 43/2014/ND-CP as follows:

"5. For construction works used for tourist accommodation purposes in accordance with the law on tourism on commercial land or services, if satisfying all conditions prescribed by the law on land, the law on construction and the law on real estate business shall be certified for ownership of construction works attached to land according to commercial land use purposes and services;..."

According to Clause 3, Article 125, Clause 1, Article 128 of the Law on Land, the condotel building will be certified for ownership with the ownership term of the condotel apartment depending on the land use purpose, this term must not exceed 50 years according to the term for land allocated by the State, lease for commercial or service use. Therefore, buyers can only use land and own apartments during the remaining land use period of the investor, not long-term stable use like residential land.

3. Order and procedures for registration and issuance of certificates:

Decree No. 10/2023/ND-CP is also amended, supplementing Article 72 of Decree No. 43/2014/ND-CP stipulating the order and procedures for registration and issuance of Certificates of land use rights and housing ownership. 

Accordingly, after completing the project, the investor shall send to the Department of Natural Resources and Environment the following documents:

For housing development projects:

Certificate or decision on land allocation or land lease by a competent agency; Documents on fulfillment of financial obligations of the project investor.

Built house and land plan means a completed ground plan drawing or a plan design drawing with dimensions of the sides of each sold apartment in accordance with the current construction status and signed contract; Building permits (if any); Notification of specialized construction agencies allowing the investor to accept the work or approve the results of acceptance and completion of the work put into use in accordance with the provisions of the law on construction; list of apartments, constructions,...

For real estate business projects other than housing development projects:

Certificates of land use rights, ownership of houses and other assets attached to land; documents of fulfillment of financial obligations of the project owner; Site design drawings in accordance with the current construction status and signed contracts; Notification of specialized construction agencies permitting investors to accept work items or works or approve results of acceptance and completion of work items or works put into use in accordance with the provisions of the law on construction; The list of assets includes information about the name of the property, land area, common construction area, private use of each asset,...

After the Department of Natural Resources and Environment completes the inspection, the investor of the housing project is responsible for submitting 01 set of registration dossiers, issuing Certificates of land use rights, ownership of houses and other assets attached to land to the Land Registration Office on behalf of the transferee or providing documents to the buyer for self-registration. 

- An application for registration of land, property attached to land, issuance of certificates of land use rights, ownership of houses and other assets attached to land;

- Contracts on transfer of land use rights, purchase and sale of houses or non-residential construction works as prescribed by law;

- Minutes of handover of houses, land and non-residential constructions.

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For more information, please contact:

Hoang Pham (James) / Managing Partner at: hoang.pham@vselawyers.com

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Attention: This legal update is not an advice and should not be treated as such.