Ho Chi Minh City, 27 March 2025
Last week, on 19 March 2025, Mr. Pham Viet Tuan, Partner | Head of Litigation & Dispute Resolution, Real Estate & Construction, participated as a key speaker in the webinar titled “Key Considerations in Real Estate and Construction Projects” where he discussed the legal risks in property transactions for buyers in Vietnam. Joining alongside esteemed speakers from organizations such as Avison Young Vietnam and Bao Minh Insurance Company, Mr. Tuan outlined the legal framework in Vietnam and addressed key legal risks buyers face and provided practical guidance on ownership verification, foreign ownership restrictions, contract performance, and regulatory compliance.
As Vietnam’s real estate market continues to attract both foreign and domestic investors, the webinar served as a valuable platform for buyers and investors to gain expert perspectives, raise concerns, and seek guidance on navigating legal complexities in property transactions.
Key Insights from Mr. Tuan’s presentation include:
Legal Framework Governing Property Transactions in Vietnam
Vietnam’s real estate market is governed by multiple overlapping laws, making compliance complex. Mr. Tuan highlighted the importance of understanding key legal instruments that regulate property transactions, including:
- The Civil Code, which governs contract rights and obligations.
- The Land Law, which regulates land use rights and ownership.
- The Law on Real Estate Business, which governs real estate trading and business operations.
- The Housing Law, which regulates foreign ownership and housing development.
Understanding these legal frameworks is crucial for ensuring secure property transactions.
Key Risks for Property Buyers
During the discussion, Mr. Tuan outlined common risks that buyers, both individuals and corporate entities, should be aware of:
- Title and Ownership Issues
Many properties lack proper ownership certificates (Red Book) or contain outdated legal information, which can lead to disputes. Some properties may also be tied up in ongoing legal proceedings, enforcement actions, or pledged as collateral to banks.
- Foreign Ownership Restrictions
Foreign buyers cannot own land in Vietnam but can purchase residential properties in approved developments. However, under Vietnamese law, foreign individuals can only own up to 30% of apartments in a project or 10% of houses in a specific residential area. Unregistered or unofficial ownership arrangements pose serious legal risks.
- Contractual Risks
Poorly drafted contracts often favor developers, containing vague terms, unfavorable clauses, or improper compliance with notarization and payment regulations. Buyers who make advanced payments beyond legal limits risk financial losses, particularly in off-plan transactions.
- Regulatory Changes
Vietnam’s real estate laws are subject to frequent amendments, which can significantly impact ownership rights, contract obligations, and investment structures.
Strategies to Protect Buyers in Property Transactions
To mitigate legal risks, Mr. Tuan emphasized the importance of thorough due diligence before entering into any property transaction. He provided several recommendations:
- Legal Due Diligence
Buyers should verify ownership rights, check for any disputes, and ensure that all necessary permits and approvals are in place.
- Contract Review
Ensuring that contract terms are fair, legally sound, and compliant with Vietnamese law is essential to protecting buyers’ interests.
- Negotiation and Legal Support
Engaging experienced legal counsel can help safeguard investments by negotiating better contract terms and identifying potential legal risks.
- Monitoring Payment and Handover Schedules
Tracking developer obligations and ensuring compliance with contractual timelines is crucial, especially in off-plan property transactions.
During the discussion, Mr. Tuan also advised that if disputes arise, buyers should prioritize negotiation and mediation, as litigation and arbitration should only be a last resort due to the costs and time involved.
As a leading law firm in Vietnam, Indochine Counsel is committed to advising and protecting investors and buyers in real estate transactions. Our firm is dedicated to provide comprehensive legal support, helping clients navigate the complexities of Vietnam’s real estate market while ensuring compliance with regulatory requirements.
—–
For more information on legal risks in property transactions or to seek legal guidance, contact the team at Indochine Counsel via [email protected] or +84 28 3823 9640.
For media inquiries or collaboration opportunity, please contact our Marketing team at [email protected] or +84 28 3823 9640.
Point of Contact: Ms. Nguyen Khanh Thanh Vi, Head of Marketing & Business Development
