Real estate law governs brokers, appraisers

Talking Law - (02-08-2006)

The National Assembly passed the Law on the Real Estate Business on June 21. Under the law, to take effect on January 1, 2007, individuals, organisations, foreigners and overseas Vietnamese will be authorised to offer real estate services including brokerage and agency, appraisal, marketing, and consultancy.

In the past, apart from regulations pertaining to auctioneers contained in Government Decree No 05/ND-CP of January 18, 2005, and Ministry of Justice Circular No 03/2005/TT-BTP of May 4, 2005, there were no provisions in Vietnamese law pertaining to individuals and organisations conducting real estate business or providing real estate services.

The new law sets conditions and legal requirements that apply equally to Vietnamese and foreigners for the licensing of brokerages and appraisers.

Under Article 8, in order to offer brokerage services, individuals and organisations are required to have at least one broker with a licence granted by a competent authority, while the condition for providing real estate appraisal services is to have at least two licenced appraisers on staff. The law provides for the operation of a real estate trading floor by an enterprise with at least two certificated brokers and two certified appraisers on staff.

Article 50 provides that an individual who wants to be granted a broker’s licence shall (i) have full civil act capacity, (ii) be trained in real estate brokerage, and (iii) submit a dossier to the provincial People’s Committee.

The requirements for becoming licensed as a real estate appraiser are higher, including: (i) full civil act capacity, (ii) training in real estate appraisal, (iii) a college or university degree, and (iv) submission of a dossier to the provincial People’s Committee.

In the dossiers for applying for the broker’s or appraiser licence, it is required that the application for the licence be certified by the district People’s Committee.

The law indicates that the Government will issue additional regulations on the training courses required for brokers and appraisers (Clause 4, Article 50, and Clause 4, Article 55) and on granting and revoking licences. With such regulations, it may turn out that licences granted by foreign authorities and training courses organised by foreigners may not be accepted. Foreign brokers licensed by foreign authorities may be required to apply for an additional licence through the provincial People’s Committee in Viet Nam, even possibly be required to attend additional training courses as stipulated by the Government.

While requirements such as these would satisfy the need for clarity and transparency important for Viet Nam’s accession to the WTO, they could have a discouraging effect on foreign professionals seeking to work in Viet Nam.

The new law is expected to make the real estate market more ordered and professional and help end the current freeze in the nation’s real estate market, but it remains to be seen how the Government will flesh out the law with implementing regulations.