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Currently, project land is a type of investment that many investors are interested in, and the purchase and sale of project land are very exciting in the real estate business market. So, in order to prevent risks when making transactions related to the above real estate, what should the Investor pay attention to? Here, LS Law Firm would like to share basic information on the above issue as follows.

Currently, the law has not specified the name "ground land" or "project land". This name is the term used in practice, can be understood: The ground is simply the term used to refer to the vacant land, which has not been carried out construction works. Based on the purpose of land use, ground land is classified into 3 types: project land, residential land and adjacent land.

The project land is the term used to refer to the areas that have been subdivided by the investor, are in the planning and are being prepared by the investor for construction work. However, the project land is still unbuilt. Project land usually has to have a clear plan and must be approved 1/500, with attached utilities, a convenient transportation system,… to build residential areas, urban areas, industrial areas,…

The legality of the project land

For project investors, the issue they are interested in is when the land plot project is eligible to be sold on the market. On the contrary, for the buyer, whether the land traded is legal or not, how is the law regulated?

In order for a land plot project to become a subject of transactions, the law stipulates that these land projects must be created by the investor in connection with housing development as prescribed in Clause 2, Article 17 Law on Housing 2014 amended and supplemented in 2020: “2. Housing construction investment projects prescribed in this Law include:

a) Investment project on new construction or renovation of an independent house or a cluster of houses;

b) Investment project on the construction of a housing area with synchronized technical and social infrastructure systems in a rural area;

c) Construction investment project using mixed types of lands, parts of which are used for the construction of houses;

d) Investment project on construction of buildings for mixed residential business purposes.”

Accordingly, for the type of land plot project, the investor must develop and build the ground land associated with the housing development under the project to be allowed to trade.

Conditions for project land to be allowed to be implemented in the transfer transaction

First of all, the Land Plot Project to be put into business must satisfy the conditions specified in Article 9 of the Law on Real Estate Business 2014. Requirements for real estate to be put on the market: “1. A house or building to be put on the market must meet all of the following requirements:

a) There is a certificate of land use rights covering the registered ownership of the house or building on the land. For an existing house or building in a real estate investment project, only the certificate of land use rights issued in accordance with regulations of the Law on land is required;

b) There is no dispute over the land use rights or ownership of the house or building on land;

c) The house or building is not distrained to serve the judgment enforcement.”

In addition, in the future, the land plot project may be residential areas, urban areas, industrial areas... Therefore, the investors who want to transfer the above real estate must meet the prescribed conditions defined in Clause 1, Article 55 of the Law on Real Estate Business 2014: "Documents proving land use rights, project dossier, construction drawing approved by a competent authority, construction permit, and documents about acceptance of infrastructure facilities finished according to the project’s progress must be available. In the case of an off-plan apartment or mixed-use building, the written record of acceptance of finished the foundation of such building must be available.; ….”

Next, the conditions for transferring land plots projects in the form of housing investment projects and infrastructure construction investment projects are specified in Clause 1, Article 194 of the Land Law 2013:

“1. The transfer of land use rights in investment projects on construction of and trading in houses must be conducted in accordance with the following provisions:

a) The provincial-level People’s Committee may, based on the Government’s regulations on conditions and types of urban centers, permit investors of projects on construction of and trading in houses to transfer land use rights in the form of dividing land parcels upon completion of the infrastructure construction and fulfillment of financial obligations related to land…..”

This is specifically guided in Article 41 of Decree 43/2014/ND-CP dated May 15th, 2014 detailing the implementation of a number of articles of the Land Law, providing:

"1) Conditions for investment projects on construction of houses for sale or combined sale and lease to transfer land use rights in the form of dividing land parcels for sale include:

a) The projects comply with district-level annual land use plans;

b) Project investors shall complete the construction of infrastructure facilities including service, technical and social infrastructure facilities under the approved 1:500 detailed master plans, ensuring the connection with the common infrastructure systems of the areas before transferring land-use rights to people for building houses, and ensuring the provision of essential services of electricity and water supply, water drainage and garbage collection;

c) Projects investors shall fulfill all financial obligations related to the projects’ land, such as land use levy and land rental; and land-related taxes, charges (if any);

d) The projects are implemented in areas or urban centers of the types eligible for transfer of land use rights in the form of dividing land parcels for sale as prescribed in Clause 2 of this Article.

2) Investors of projects on construction of houses for sale or combined sale and lease may transfer land use rights in the form of dividing land parcels for sale into the areas outside the inner districts of special urban centers; areas with strict requirements on landscape architecture, central areas, and around buildings that are prominent architectural points in urban centers; the frontages of regional- or higher-level roads and main landscape roads in urban centers.….”

Therefore, in order for the land plot project to be traded, the Investor must meet the above conditions.

However, in order to avoid the case that buyers are scammed, lose money to invest in "ghost land projects", or "land on paper" drawn by the investor themselves...; Buyers need to find out, verify information about the project, consider, calculate and check the feasibility and completion capacity of the project by asking the Investor to provide test documents. collection of infrastructure and documents for the fulfillment of tax obligations for the land plot being traded, etc. Buyers, should not buy land for projects with unclear legality to avoid facing difficulties later on. On the contrary, the seller - The investor of the land plot project also needs to have a certain understanding and compliance with the law when transferring the land to avoid unnecessary risks.

Recommendations of LS & Associates Limited Liability Law Company (“LS Law Firm”)

Above are the basic contents of the project land based on legal regulations at the time of writing this article. If you need advice on the above issue or are interested in other legal services, please contact LS Law Firm immediately via Email: lslawfirm2014@gmail.com for timely support.

Note: The article is for reference only, any copying and use of the article for personal evidence, in any case, is not allowed./.