Decree No. 188/2013/ND-CP dated November 20, 2013 of the Government on developing and managing social houses

 THE GOVERNMENT

Decree No. 188/2013/ND-CP dated November 20, 2013 of the Government on developing and managing social houses

Pursuant to the Law on Government organization dated December 25, 2001;

Pursuant to the Law on Housing dated November 29, 2005;

Pursuant to the Law on Land dated November 26, 2003;

At the request of the Minister of Construction;

The Government promulgates a Decree on development and management of social houses,

Chapter 1.

GENERAL PROVISIONS

Article 1. Scope of regulation

1. This Decree specifies the development, management and use of social houses that are bought, rented, or lease purchased by the entities that meet the conditions in this Decree.

2. The management and use of social houses invested by government budget shall comply with legislation on management and use of state-owned housing.

Article 2. Subjects of application

This Decree is applicable to:

1. Vietnamese, foreign organizations and persons, Vietnamese citizens residing overseas that make investments in development of social houses that is sold and leased to the eligible entities specified in this Decree.

2. The households and persons that make investment to social houses that is sold and leased to the eligible entities specified in this Decree.

3. The organizations concerned, the entities allowed to buy, rent, and lease purchase social houses specified in this Decree.

4. State agencies related to social houses.

Article 3. Rules for development and management of social houses

1. Development of social houses must comply with construction planning approved by competent authorities, meet the quality standards and regulations according to legislation on construction, and comply with housing design standards in this Decree. Technical infrastructure and social infrastructure of social houses in projects must be harmonious.

2. Social houses invested by households and persons must meet basic requirements of technical infrastructure and minimum standards promulgated by competent authorities.

3. Social houses in this Decree must be strictly managed. The units assigned to management and operate social houses must ensure that social houses is sold or leased to only eligible entities specified in this Decree. Social houses must not be repurposed without approval by competent authorities.

4. The lawful rights and interests of investors, owners, buyers, and tenants of social houses are protected by law. Violations of legislation on development and management of social houses must be promptly discovered and penalized strictly in accordance with law.

5. Only building materials and equipment manufactured at home may be used for social houses. Imported products may not be used, except for those cannot be produced at home).

6. The Ministry of National Defense and the Ministry of Public Security may run the projects of social houses in accordance with this Decree to provide housing for military officers and professional servicemen (including commissioned officers, non-commissioned officers, and professional soldiers) that belong to the People’s armed forces in a way that suit the conditions of each force, provided each entity only receive support once.

Chapter 2.

SOCIAL HOUSE’S DEVELOPMENT POLICIES

Article 4. Methods of social houses development

1. Social houses means the housing invested and constructed with the support of the State, which is sold or leased to the entities mentioned in Clause 1 Article 14 of this Decree.

2. The methods of social houses development in this Decree include:

a) The State shall directly make investments in social houses with government budget (central or local budget), buy apartments from commercial housing projects, or receive commercial apartments from commercial housing projects transferred by investors under BT contracts to build up the fund of state-owned social houses for lease or lease purchase;

b) The companies that make investments in projects of social houses for sale or for lease from non-public capital, and are supported by the State as prescribed in this Decree;

c) The households and persons that make separate investments in building houses that are sold or leased to the entities mentioned in Clause 1 Article 14 of this Decree, and are supported by the State.

Article 5. Planning social houses development

1. According to local demands for social houses, People’s Committees of central-affiliated cities and provinces (hereinafter referred to as the People’s Committees of provinces) shall make annual, midterm, and long-term social houses development plans that conform with the National housing development strategy approved by the Prime Minister, local socio-economic development plans in the same period, and are ratified by the People’s Councils of provinces.

The People’s Committees of the provinces in pivotal economic regions in the North, the Middle and the Southeast shall send the drafts of social houses development plan to the Ministry of Construction before they are sent to the People’s Councils of provinces. Within 15 working days from the day on which the draft is received, the Ministry of Construction shall provide written opinions.

The social houses development plans made by any province outside pivotal economic regions in the North, the Middle and the Southeast shall be made and assessed by the People’s Committee of the province before they are submitted to the People’s Councils of the province.

The social houses development plan must be developed and ratified concurrently with the socio-economic development plan, government budget plan. The social houses development plan may be integrated into the local housing development program in accordance with legislation on housing, or developed and ratified separately depending on the local conditions.

The People’s Committee of the province shall approve the social houses development plan after it is ratified by the People’s Council of the same province.

2. A social houses development plan must contain:

a) Forecasted number of people that need social houses, the necessary area and quantity of social apartments.

b) The quantity of apartments, the total floor area of social houses that need building, including the houses invested by the State from government budget; the houses invested by companies from non-public capital; the houses invested by households and individuals; the quantity and structure of various types of social houses that suit various entities that need social houses locally.

c) The intended location and land area meant for social houses projects.

d) The list of social houses projects every year and in each stage; the progress of each project.

dd) The demand for capital, capital sources (government budget, capital provided from economic sectors, and other lawful capital sources).

e) Responsibilities of local authorities in running social houses development plans.

g) Other contents related to social houses development.

3. After being approved by the People’s Committees of the provinces, the social houses development plans shall be sent to the Ministry of Construction before October 31 of the year preceding the planned year, then to the Prime Minister.

4. The Ministry of Construction shall take charge and cooperate with relevant Ministries and agencies in making the annual, 5-year plans for social houses development funded by central budget, then send them to the Prime Minister for approval.

Article 6. Land planning and allocation for social houses development projects

1. While making, assessing, and ratifying urban planning, land planning, rural residence planning, planning for economic zones, industrial parks, export-processing zones, and hi-tech zones, the People’s Committee of the province shall allocate sufficient land, instruct competent authorities to determine the location and area of every social houses development plan that is constructed by investors according to Article 9 of this Decree.

2. Allocation of land for social houses in commercial housing projects a new urban area projects:

a) Investors in commercial housing or new urban areas, regardless of land area (including BT and BOT projects) in urban areas class 3 or above, must put aside 20% of the total area of land in the project or the total area of floor plan that is approved by competent authorities and, where infrastructure is available for building social houses.

Investors in commercial housing and new urban areas shall directly make investments in social houses on such 20% land area (unless it is withdrawn by the State to build social houses from government budget and the investor does not wish to invest in social houses, such land shall be transferred to the People’s Committee of the province where the project is situated).

b) If the project for commercial housing or new urban area uses fewer than 10 hectares of land, instead of putting aside 20% of land to build social houses as prescribed in Point a Clause 2 of this Article, the investor may transfer a number of houses, the value of which is equivalent to the value of 20% of land according to the land price bracket imposed by the People’s Committee of the province at that time, to the State as social houses, or pay an amount of money equivalent to the value of 20% of land according to the land price bracket imposed by the People’s Committee of the province in order to build up the local social houses fund.

3. For urban areas in class 4, class 5, and rural areas, the People’s Committee of the provinces shall consider requesting investors in local commercial housing and new urban areas to put aside land for social houses as prescribed in Clause 2 of this Article depending on actual conditions.

4. Allocation of land for building social houses for workers in industrial parks, industrial complexes, economic zones, export-processing zones, hi-tech zones, industrial facilities, and handicrafts facilities, (hereinafter referred to as):

a) If the industrial park is in the process of establishment, the management board of the industrial park or the company that provide infrastructural services for the industrial park shall allocate land and invest in infrastructure of houses for workers in that industrial park in accordance with the planning approved by competent authorities, then transfer it to a selected investor in social houses development plan according to Article 9 of this Decree. The cost of compensation, land clearance, infrastructure of social houses shall be included in the rent for land in the industrial park;

b) If the industrial parks has been established without sufficient housing for workers, the People’s Committee of the province shall make a plan (or adjust the plan), provide compensation, clear up land, and withdraw land and then provide it for the selected investor in the social houses development project according to Article 9 of this Decree. The cost of land clearance is defrayed by the land levy and land rent;

If land of an industrial park is not used up, the People’s Committee of the province shall adjust the construction planning and land use plan, repurpose land, or request the Prime Minister to decide the construction of social houses on such land for workers in the industrial park.

5. If the state uses 20% of land to build social houses from government budget, the investor in commercial housing or new urban areas shall make investments in compatible infrastructure according to the planning approved by competent authorities before such land are transferred to the State.

When transferring this 20% of land to the State, the investor shall have the cost of land clearance, investment in infrastructure, and other lawful expenditures on such land reimbursed (or deducted from the investor’s financial obligation to government budget).

6. Where the State directly makes investments in social houses from central budget, land shall be allocated as follows:

a) If at least 50% investment in the project is funded by central budget, the Ministry of Construction shall take charge and cooperate with the People’s Committee of the province in selection of land for social houses development prescribed in this Article;

b) If less than 50% investment in the project is funded by central budget, the Ministry of Construction shall decide the use of land for social houses development prescribed in this Article;

7. The households and individuals making investments in building social houses must comply with urban planning, land-use planning, and construction planning of rural residences approved by competent authorities, and comply with the licenses for construction issued by competent authorities.

Pursuant to the Law on land, the People’s Committees of provinces shall repurpose farming land to encourage investments in social houses by households and individuals.

Article 7. Design standards for social houses

1. Social houses design standards:

a) If social houses funded by government budget is built in urban areas, housing design standards shall comply with legislation on housing. Low-rise terraced housing may be built in other areas.

b) If social houses funded by non-public capital is apartment buildings, the area of each apartment is from 30 m2 to 70 m2. The number of stories is not restricted but must be conformable with the construction planning approved by competent authorities. The investor may increase the density of construction up to 1.5 times the current standard established by competent authorities.

The area of an apartment of a low-rise terraced house must not exceed 70 m2 and be conformable with the construction planning approved by competent authorities.

c) If the applied standard of social houses design is different from the regulations in Point a and Point b of this Clause, the decisions of the Prime Minister shall prevail.

d) Design of detached houses invested by households and individuals must ensure the quality, conform to planning and minimum requirements imposed by competent authorities.

2. Social houses development projects funded by government budget shall apply the typical designs provided by competent authorities.

3. The Ministry of Construction shall provide guidance on design standards and promulgate regulations on minimum requirements for detached housing invested by households and individuals.

Article 8. Capital sources of social houses development

1. Capital for social houses development invested by the State is raised from the following sources:

a) Local housing development funds established and operated in accordance with legislation on housing (if any); annual local budget decided by the People’s Councils of provinces; municipal bonds, housing bonds; other lawful sources prescribed by law;

b) Direct investments from local budget; capital from government bonds (if any);

c) ODA and other foreign loans (if any).

2. Non-public capital invested by economic sectors in social houses development (including households and individuals):

a) Equity capital of investors, households, or individuals;

b) Loans from confessional loans of the Government;

c) Bonds guaranteed by the Government in accordance with legislation on Government bonds, bonds guaranteed by the Government, and municipal bonds;

d) Loans granted by the credit institution established and operated within the law;

dd) Loans from the local housing development funds that are established and operated within the law;

e) Other lawful capital sources prescribed by law.

Article 9. Investors in social houses

1. Investors in social houses development projects are the persons that own the capital or assigned to mange and use capital to make investments in social houses, including:

a) Central and local state agencies in charge of housing; project management boards established and operated within the law; state-owned companies to manage and use capital from government budget to make investments in social houses projects.

b) Companies from various economic sectors that are licensed to trade in real estate and make investments in social houses projects; the manufacturers and service providers that employ workers and make investments in housing that is sold or leased only to their workers.

2. For the social houses development projects 100% of investment in which is funded by government budget, the projects 30% of investment in which if funded by government budget or more, exclusive of land levies and support for infrastructure (if any), the selection of investors, contractors, the contracts for consultancy, construction, installation, and equipment procurement shall comply with legislation on housing and construction applicable to state-funded projects.

3. Investors in social houses projects invested by non-public capital shall be selected by bidding or appointed in accordance with legislation on land and housing.

4. If the social houses development project uses the 20% land of a commercial housing or new urban areas project mentioned in Clause 2 and Clause 3 Article 6 of this Decree, the investor in the commercial housing or new urban area project is also the investor in the social houses development project.

5. If the investor has the lawful right to use a piece of land that is conformable with construction planning and wishes to run social houses development projects, such investor may invest in social houses development projects.

6. Management boards of local industrial parks or providers of infrastructural services shall be appointed as co-investors in infrastructure of the social houses attached to such industrial parks. After the investment in infrastructure of the infrastructure is done, the primary investor may invest in the construction of social houses or transfer the land together with its infrastructure to the manufacturers or real estate traders in the industrial park (hereinafter referred to as secondary investors) in order to build social houses for workers in the industrial parks.

7. Investors in social houses under BT contracts shall be selected in accordance with Article 10 of this Decree.

8. Social houses invested by households and individuals shall be built by such households and individuals in accordance with legislation on housing and construction.

Article 10. Social houses development under BT contracts

1. Only social houses invested by the State may be developed under BT contracts.

2. Based on the available land for social houses according to the approved plan, the People’s Committee of the province shall:

a) Make a list of social houses development projects under BT contracts.

b) Post that list and the information related to the such projects, the criteria for selecting BT investors on the website of the housing agency so that companies can base on that to apply for BT contracts.

3. The People’s Committee of the province shall sign a consultancy contract or request the provincial housing agency to sign a consultancy contract with a real estate trader to determine the criteria for social houses in the list of projects, select BT investors, and request the People’s Committee of the province to decide.

The BT investor in social houses is a company or cooperative that is licensed to trade in real estate, professionally and financially capable of executing social houses development projects.

4. After being selected by the People’s Committee of the province, the BT investor shall make and submit a detailed drawing scale 1/500 to competent authorities (if no drawing is available), then make and submit a social houses development project to competent authorities for approval.

5. After the social houses development project is approved, the provincial housing agency shall draft a BT contract and request the President of the People’s Committee of the province to sign a contract with the BT investor or sign it themselves if requested by the People’s Committee of the province).

6. The construction of social houses under the BT contract shall comply with legislation on housing and investment under BT contracts.

7. After finishing the investment and acceptance of social houses under the BT contracts, the BT investor shall transfer such housing to the provincial housing agency.

8. The BT investor shall has the investment in the project reimbursed in the form of cash from government budget, or an area of land for capital recovery, or other lawful capital sources and assets.

9. Specific instructions on social houses development under BT contracts in this Article shall be provided by competent authorities.

Article 11. The power to permit investment, make, assess, and approve social houses development projects

1. The power to permit investment in social houses development projects (except for the case in Clause 3 of this Article):

a) The Prime Minister shall decide the investment after the Ministry of Construction makes an assessment in the following cases:

- The land area of the project is 100 hectares or more, regardless of capital sources;

- The project is funded by central budget, regardless of the area of land.

b) The People’s Committee of the province shall decide the investment after reaching a written agreement with the Ministry of Construction in the following cases:

- The land area of the project is from 20 hectares to below 100 hectares (except for the projects funded by central budget mentioned in Point a of this Clause);

- The land area of the project is under 20 hectares but has fewer than 2,500 apartments (except for the projects funded by central budget mentioned in Point a of this Clause)

c) The People’s Committees of provinces shall decide the investment in other projects.

d) The time limit for assessing and making a decision to permit the investment mentioned in Points a, b, and c of this Clause does not exceed 45 days, and written opinions shall be provided within 15 days from the day on which the application for permission to invest is received.

2. The investor shall submit an application for permission to invest to a competent authority mentioned in Clause 1 of this Article before making, assessing and approving the project.

3. If bids are invited to select an investor in a project funded by non-public capital, the application for permission to invest shall be omitted. When inviting bids for selecting an investor, the competent authority shall specify the requirements mentioned in Clause 4 of this Article in the invitation to bid.

4. The decision to permit the investment mentioned in Clause 1 and Clause 2 of this Article must contain:

- The project s name (independent project or project on 20% land);

- The investor’s name;

- The targets and methods of investment;

- The location, land are, boundary, and population;

- Total investment and capital sources;

- Technical and social infrastructure that meet current construction standards;

- Total floor area of the whole project, floor area of every type of housing, including commercial housing (if any); the quantity of every type of apartments of the project;

- Area of public amenities, including parking lots, public spaces, service areas (if any);

- A sale plan specifying the entities entitled to buy, rent, lease purchase social houses, the quantity and area of social houses for sale or for lease;

- The rights and obligations of the investor, the responsibilities of local authority, incentives provided for the project;

- Time and schedule of project execution.

5. An application for permission to invest consists of:

a) A petition for permission to invest;

b) A detailed drawing scale 1/500;

c) A description of the application and drawing;

d) The investments subject to permission.

The Ministry of Construction shall specify the contents of the application and the procedure for applying for permission to invest in social houses projects prescribed in this Article.

6. Social houses development projects shall be made, assessed and approved in accordance with legislation on housing and construction.

7. The households and individuals that make independent investments in social houses might not make a projects, on condition that:

a) Regulations on detached houses, survey, design, and construction of detached houses, detached house quality management are complied with;

b) Social houses invested by households and individuals are conformable with the conditions imposed by the Ministry of Construction;

c) A plan is submitted to the People’s Committee of the province to be provided with incentives for investment in social houses;

d) The People’s Committee of the province shall promulgate specific regulations that suit local condition to encourage households and individuals to make investment in social houses.

Article 12. Incentives for social houses development

1. Benefits of social houses development projects supported by the State:

a) The area of land within the approved project (including the land for building commercial works mentioned in Point 1 of this Clause) is exempt from land levies and land rent;

If the investor has paid land levies upon the receipt of land from the State, or has received the rights to use land what is used for building social houses from another organization, household or individual, or has paid the land levy on the 20% land, they will be returned or deducted from the investor’s financial obligation to the State according to legislation on land.

b) Eligible for preferential VAT rates according to legislation on VAT.

c) Eligible for exemption, reduction of corporate income tax, and preferential rates of corporate income tax according to legislation on corporate income tax.

d) Eligible for support from:

- Loans granted by credit institutions, commercial banks, and financial institutions established and operated within the law.

The credit institutions, commercial banks, and financial institutions must retain an amount of capital (at least 3% of total outstanding loan) for investors in social houses development projects, and for buyers and tenants of social houses to take loans with lower interest rates than market rates and duration that suitable for their solvency.

- Preferential loans from local budget, municipal bonds, Housing Development Fund, and other sources of preferential loans (if any).

dd) The whole investment in infrastructure beyond the perimeter (traffic, electricity supply, water supply and drainage) is reimbursed by government budget; the expenditures on compensation, land clearance, technical infrastructure and social infrastructure within the project are covered, either in whole or in part depending on the local condition.

e) Fundamental design assessment may be omitted if typical designs provided by competent authorities are used; consultancy, construction and installation may be carried out independently if capable (except for the social houses development project funded by government budget).

g) If a manufacturer in an industrial park invests in or buy housing for their workers without collecting rents, or with a rent not exceeding the limit on rents for social houses imposed by the People’s Committee of the province, or rent houses for their workers, then the expenditure on construction, purchase of houses, or rents are considered reasonable expenditures in the producing cost when calculating corporate income tax.

h) Future housing and constructions within the social houses development project may be used as collateral for the loan used for such project.

i) Bonds guaranteed by the Government may be issue in accordance with legislation on bond issuance.

k) Other incentives according to legislation on investment incentives (if any).

l) The investor may put aside 20% of the area of land allocated (even the project is on 20% land) to invest in commercial constructions (including high-rise or low rise commercial housing) to defray the investment, reduce the prices of social houses, the cost of management and operation of social houses after investment.

20% of the floor area of a project may be sold or leased at market prices if the area of land for commercial works is not mentioned in the detailed plan approved by competent authorities.

The commercial works mentioned in this Clause must be included in the social houses development project and ensure maximum profit according to Article 15 of this Decree.

2. Apart from the incentives in Clause 1 of this Article, the social houses funded by non-public capital that is only for lease is also provided with the following incentives:

a) The whole investment in technical and social infrastructure within the project is covered by the People’s Committee of the province from local budget;

b) After 05 years from the beginning of the lease period, the investor may sell the social houses to the tenant (if demanded) at social houses prices at that time.

3. Benefits of households and individuals making investments in social houses:

a) Land levies are exempt when land is repurposed to build social houses.

c) Personal income tax and other taxes related to the sale, lease, lease purchase of social houses are exempt or reduced according to legislation on tax.

c) The support mentioned in Point d Clause 1 of this Article.

d) Future housing may be used as collateral for loans for building social houses.

Chapter 3.

MANAGEMENT AND USE OF SOCIAL HOUSES

Article 13. Sale and lease of social houses

1. Social houses must be sold and leased to eligible entities in accordance with Article 14 of this Decree. Each household and individual may offer one support related to social houses according to this Decree.

The entities mentioned in Point c Clause 1 Article 14 of this Decree shall receive support for buying, renting, or lease purchasing social houses invested by the State, economic sectors, the Ministry of National Defense, or the Ministry of Public Security according to Clause 6 Article 3 of this Decree.

2. The sale and lease of social houses funded by government budget shall comply with legislation on management and use of state-owned housing.

3. The investor in the social houses development project funded by non-public capital must use 20% of floor area of the project for lease. After at least 05 years from the beginning of the lease period, the investor may sell such social houses to the tenant, provided the tenant meet the requirements in Article 14 of this Decree, at the sale prices mentioned in Point a Clause 2 Article 15 of this Decree.

4. Tenants of social houses must not sublet or transfer the housing in any shape or form throughout the lease period under the contract signed with the landlord.

5. The person that buys or lease purchases social houses must not sublet, mortgage (unless it is mortgaged to take loans for buying or lease purchasing the same apartment), or transfer the housing in any shape or form during the period of at least 05 years since the payment is settled of under the contract.

The person that buys or lease purchases social houses may only sell, mortgage, or lease out the housing after at least 05 years since the payment under the signed contract is settled and the Certificate of rights to use land, ownership of land and property on land is issued.

From the time the person that buys or lease purchases social houses is allowed to sell it to another person, 50% of the land levy on the apartment (or 100% if the housing is low-rise terraced house) shall be paid to the State apart from the amounts that must be paid when selling housing. The land prices imposed by the People’s Committee of the province when the housing is sold shall apply in this case.

6. Before the expiration of the 5-year period stated above, the social houses may only be sold to the State (for lease purchased social houses funded by government budget) or to the investor in the social houses development project (for social houses funded by non-public capital), or to the entities eligible to buy or lease purchase social houses mentioned in Article 14 of this Decree. The sale prices of social houses must not exceed the limit on prices of social houses at that time.

7. When social houses invested by households and individuals is bought, rented or lease purchased, the transfer of rights to use land must conform to legislation on land.

8. Guidance on procedure for purchase, rental, and lease purchase of social houses shall be provided by the Ministry of Construction.

9. Pursuant to this Decree and guidance provided by the Ministry of Construction, the People’s Committees of provinces shall establish specific procedures for considering and priority of the entities that wish to buy, rent, or lease purchase local social houses.

10. The Ministry of National Defense and the Ministry of Public Security shall promulgate specific regulations after reaching a written agreement with the Ministry of Construction on criteria for identification of eligible entities, conditions for buying, renting, or lease purchasing social houses according to Clause 6 Article 3 of this Decree.

Article 14. Conditions for allocation of social houses

1. Social houses is meant to satisfy demand for accommodation of:

a) Contributors to revolutions according to the Ordinance on incentives for contributors to revolutions;

b) Officials and civil servants in administrative agencies, communist agencies and associations that are paid by government budget;

c) Military officers and professional servicemen (including commissioned officers, non-commissioned officer, and professional soldiers) that belong to the People’s armed forces and are paid by government budget; the persons working in cipher that are not servicemen but eligible for the same benefits enjoyed by servicemen;

d) Workers in industrial parks, economic zones, export-processing zones, hi-tech zones, industrial factories, handicrafts facilities.

dd) Low earners and members of poor families in urban areas;

e) Beneficiaries of social protection according to legislation on policies on support for beneficiaries of social protection; lonely or homeless elderly people;

g) The persons that have returned public houses after they are no longer eligible for renting public houses;

h) Students of public or non-public universities, colleges, vocational schools, trade schools, and vocational institutions for workers,

i) Relocated households and individuals that are not provided with relocation land or housing.

2. The entitles eligible to buy, rent, and lease purchase social houses funded by government budget are specified by the laws on management and use of state-owned housing.

3. Social houses from the projects funded by government budget may be bought, rented, or lease purchased if the following conditions are satisfied:

a) The applicant does not own a house or the average area of the house is below 8 m2 per person, the house is old, degraded without any support from the State in the form of land or housing.

b) The buyer must have a permanent residence, or a temporary residence with at least one year’s social insurance in a province where a social houses development project is run.

c) In case of lease purchase, the first installment of 20% of the house value shall be paid, and the residual amount shall be paid under the sign contract.

d) Low earners mentioned in Point dd Clause 1 of this Article are the persons that are not required to pay income tax. Members of poor households mentioned in Point dd Clause 1 of this Article are the people classified as poor according to the Prime Minister s regulations. Beneficiaries of social protection mentioned in Point e Clause 1 of this Article must be certified by the People’s Committee of the commune. The entities mentioned in Point h Clause 1 of this Article may be provided with housing in the form of leasing.

4. The permission for relocated households and individuals to buy, rent, or lease purchase social houses to live according to Point i Clause 1 of this Article shall be specified by the People’s Committee of the province without applying the conditions in Clause 3 of this Article.

5. Buyers and tenants of social houses invested by households and individuals are the entities mentioned in Clause 1 of this Article, having permanent or temporary residences in the province where social houses is available.

Article 15. Sale, lease, and lease purchase prices of social houses

1. The sale, lease, and lease purchase prices of social houses funded by government budget are specified by the laws on management and use of state-owned housing.

2. The sale prices, lease prices, and lease purchase of social houses invested from non-public capital are determined as follows:

a) Sale prices of social houses shall be decided by the investor to sufficiently recover capital, including loan interest (if any) and reap a profit of not more than 10% of total investment.

If the sale price of the project is lower than the investment in construction of housing of the same type announced by competent authorities at that time, the profit must not exceed 15% of total investment.

b) Lease and lease purchase prices of social houses shall be decided by the investor to sufficiently recover capital, including loan interest (if any) and reap a profit of not more than 15% of the total investment. The support provided by the State mentioned in Article 12 of this Decree must not be included in the lease and lease purchase prices. The minimum duration of capital recovery is 15 years from the day on which the contract is signed.

When social houses is lease purchased, the tenant shall pay a first installment of 20% of the value of the house. The remaining amount shall be paid by installments under an agreement between the landlord and the tenant. The minimum duration of lease purchase is 05 years from the day on which the house is received by the tenant.

c) The People’s Committees of provinces shall valuate sale prices, lease prices, and lease purchase prices of local social houses funded by non-public capital.

3. Prices of social houses invested by households and individuals shall be decided by the investors, provided they do not exceed the price bracket imposed by the People’s Committees of provinces.

4. The tenant of social houses shall pay a deposit to the landlord under an agreement, which does not exceed six month s rent nor lower than three months’ rent, in order to ensure the fulfillment of the tenant s obligations.

The tenant and the landlord may reach an agreement on a deposit higher than the level mentioned in this Clause, provided such deposit does not exceed 50% of value of the leased house. A reduction in rent or exemption of rent for a certain period of time agreed by both parties may be provided if the tenant pays the deposit mentioned in this Clause.

Members of poor households and the entities mentioned in Points a, e, and h Clause 1 Article 14 of this Article are exempt from paying deposit when leasing social houses.

5. The People’s Committee of the province shall inspect the sale, lease, and lease purchase of local social houses in accordance with this Decree and legislation on housing.

6. Buyers and tenants of social houses may take loans from credit institutions, commercial banks, and financial institutions established and operated within the law to settle the payment for social houses according to Point d Clause 1 Article 12 of this Decree with lower interest rates than market rates and suitable loan term.

Article 16. Contracts for sale, lease, and lease purchase of social houses

1. The sale, lease, and lease purchase of social houses must be made into a contract using the contract form provided by the Ministry of Construction.

2. The sale or lease purchase contract shall be signed between the investor and the buyer or tenant when the construction of the foundation is finished. The seller may collect deposits from their customers under agreements, provided the deposit does not exceed 70% of the house value written in the contract. The lease contract may be sign by the investor, or a company authorized by the investor, and the tenant.

3. The lease contract shall only be signed after the construction is completed, the house is transferred and functional. The maximum duration of a lease contract is 05 years.

4. The lease contract is terminated in the following cases:

a) The tenants no longer wish to keep renting the house when the lease period expires;

b) The termination is agreed by both parties;

b) The tenant unilaterally terminates the lease contract ahead of schedule;

d) The tenant commits breaches that cause the contract to terminate ahead of schedule;

d) The termination is decided by competent authorities.

5. When the contract expires and the tenant is still eligible for leasing social houses, both parties shall sign another lease contract. if the tenant still wishes to rent the house and does not commit the breaches that lead the lease contract to terminate, the tenant is entitled to extend the lease contract or sign a new one.

Article 17. Social houses quality management

1. The management of social houses construction quality shall comply with legislation on management of construction quality of commercial housing.

2. Regulations on urban planning and rural residential areas must be complied with, a license for construction must be obtained, and a written certification of fulfillment of requirements imposed by the Ministry of Construction must be issued by the Service of Construction or a Department in charge of housing management of the district (hereinafter referred to as the People’s Committee of the district) before social houses invested by a household or an individual is made available for lease, lease purchase or sale.

Article 18. Operation of social houses

1. The operation of social houses funded by government budget shall comply with the laws on management and use of state-owned housing.

2. Investors in social houses funded by non-public capital are responsible for its operation.

3. Operation of social houses being apartment buildings shall be managed in accordance with legislation on housing.

Social houses management services are also eligible for the benefits of public services as guided by the Ministry of Finance.

4. Social houses managers are entitled to provide other services within the social houses to defray the costs of management and maintenance, thus reduce the rent.

5. Social houses invested by households and individuals:

a) The owner of the house for lease shall monitor it themselves or hire/authorize a provider of housing management services.

b) During the contractual lease period, the owner of the house may sell it to the tenant if the tenant wishes to buy it and the seller is exempt from land levy when selling the house.

c) Housing owners are entitled to the benefits and must fulfill the obligations attached to their housing in accordance with civil laws and housing laws.

d) The Ministry of Construction shall specify the quality management, operation and management of social houses built by households and individuals for sale or for lease.

Article 19. Rights, obligations, and responsibilities of sellers, landlords, buyers and tenants of social houses

1. Sellers, landlords, buyers and tenants of social houses shall exercise the rights and fulfill the obligations prescribed by housing laws and civil laws. Some notable rights and obligations among which:

a) Rights and obligations of sellers and landlords of social houses:

- Strictly adhere to the agreements in the signed contract for sale, lease, or lease purchase of social houses;

- Terminate the contract under the agreements therein;

- Establish a social houses management board and issue social houses regulations under the guidance of social houses if the social houses is an apartment building;

- The landlord of social houses is entitled to take back the house when the lease contract terminates, but the tenant must be notified at least one month in advance, and the deposit (if any) shall be returned.

- Collect fees for services related to the management and operation of social houses in accordance with the signed contract and regulations on social houses management;

- Do not increase the prices of social houses without approval by competent authorities;

- Comply with the decisions of competent authorities on penalties for violations as well as settlement of complaints and disputes related to the sale, lease, and lease purchase of social houses;

- Other rights and obligations prescribed by law.

b) Rights and obligations of buyers and tenants of social houses:

- Terminate the contract under the agreements therein;

- Adhere to the terms and conditions in the signed contract and the regulations on housing for lease promulgated by competent authorities;

- The buyer or tenant must comply with decisions of competent authorities on penalties for violations as well as settlement of complaints and disputes related to the sale, lease, or lease purchase of social houses, exercise other rights and obligations prescribed by law.

- The tenant must return the house to the landlord under contractual agreements. Where the tenant unilaterally terminates the contract a head of schedule, the landlord must be notified at least one month in advance. If the rent for the whole lease period has been paid by the tenant, the rent for the remaining period as well as the deposit paid shall be returned. The tenant is entitled to buy the leased house if the landlord sells it in accordance with this Decree and relevant housing laws. Do not fix, upgrade the house without permission. Do not use it for other purpose, sublet it, or lend it. Do not transfer the lease contract or swap the leased house without the landlord’s agreement.

2. Pursuant to this Decree, both parties shall reach an agreement, specify the rights and obligations of both parties in the contract, the cases in which the contract terminates, the price, and the payments that must be made by both parties when buying, renting, or lease purchasing social houses.

Chapter 4.

PENALTIES FOR VIOLATIONS, SETTLEMENT OF COMPLAINTS AND DISPUTES RELATED TO MANAGEMENT AND OPERATION OF SOCIAL HOUSES

Article 20. Violations pertaining to management and operation of social houses

1. Breaches of agreements in the contract for sale, lease, and lease purchase of social houses.

2. Violations against the laws on management and operation of social houses.

Article 21. Penalties for violations pertaining to management and operation of social houses

1. If the seller, landlord, buyer or tenant shall be responsible for the breach of agreements in the signed contract. Compensation shall be paid for every damage caused by such breach.

2. If the tenant fails to return the house after the lease period in the lease contract or lease purchase contract (where the tenant fails to settle the payment in full), the landlord may request local authority to enforce the return of the house. The People’s Committee of the province shall organize or authorize a district authority to organize the enforcement in accordance with housing laws and civil laws in order to return the house to the landlord within 05 months from the receipt of the landlord’s request. The enforcement cost shall be incurred by the landlord.

3. The sellers and landlords of social houses that violate this Decree shall incur administrative penalties in accordance with law. The purchase or lease purchase of housing in this case is not valid. The buyer or tenant’s ownership of the house is not recognized by the State and shall not be issued with the Certificate of rights to use land, ownership of house and property on land.

4. Where the tenant sublet the house or transfer the lease/lease purchase contract, or swap the house with another person s, or lend the house without permission, the landlord is entitled to terminate the contract ahead of schedule and take back the house.

5. Other violations pertaining to the sale, lease, and lease purchase of social houses shall incur administrative penalties or face criminal prosecution depending on their nature and seriousness.

Article 22. Settlement of complaints and disputes related to the sale, lease, and lease purchase of social houses

1. Both parties shall negotiate for an amicable settlement of complaints and disputes related to social houses. If both parties fail to reach a settlement, Clause 2 of this Article shall apply.

2. Settlement of complaints and disputes related to social houses:

a) The People’s Committee of the province where social houses is situated shall settle complaints against the fees for social houses management and operation. The decision must be made within 02 months from the receipt of the request of either party. The decision made by the People’s Committee of the province is final.

b) People’s Courts shall settle disputes over the sale, lease, and lease purchase of social houses.

Chapter 5.

RESPONSIBILITIES

Article 23. Responsibilities of the Ministry of Construction

1. Perform the tasks assigned in this Decree and by the Prime Minister.

2. Provide guidance on management and use of investments in social houses from central budget in accordance with the Law on State budget.

3. Provide sample designs and typical designs of social houses; promulgate regulations on the use and operation of available social houses;

4. Take charge and cooperate with the People’s Committees of some provinces where demand for social houses is high in appointing state-owned corporations experienced in housing business to run large-scale social houses projects with sufficient infrastructure and public traffic to improve the housing conditions of the people facing housing difficulties in accordance with National housing development strategy by 2020 and orientation towards 2030 issued by the Prime Minister.

5. Take charge and cooperate with Ministries, agencies, and the People’s Committees of provinces in inspecting the development and management of social houses; assess the implementation of this Decree and suggest amendments to the Government.

6. Other rights and tasks prescribed by law.

Article 24. Responsibilities of relevant Ministries and agencies

1. The Ministry of Planning and Investment shall:

a) Take charge and cooperate with other Ministries and agencies in allocating central budget for building social houses and providing preferential loans for social houses projects; develop social houses projects and request competent authorities to consider including such projects in the projects eligible for preferential loans or investment support according to investment laws.

b) Take charge and cooperate with other Ministries in raising ODA and FDI to support the investment in social houses.

2. The Ministry of Finance:

a) Provide guidance on the incentives related to policies on finance, taxation, credit, method of establishing investment funds in industrial factories, issuance of bonds guaranteed by the Government and municipal bonds for developing social houses according to this Decree.

b) Suggest amendments to the Law on Value-added tax, the Law on Enterprise income tax and the Law on Personal income tax to maximize the incentives for social houses development projects, participants in social houses development and the entities eligible to buy, lease, and lease purchase of social houses according to this Decree.

c) Cooperate with the Ministry of Planning and Investment in allocating central budget for building social houses in accordance with the Prime Minister’s decisions.

d) Specify the method of calculating land levies payable by house seller according to this Decree.

dd) Promulgate or request competent authorities to promulgate regulations on exemption and reduction of VAT, corporate income tax, personal income tax, other taxes, and exemption of land levies; the issuance of bonds guaranteed by the Government and municipal bonds for social houses development according to this Decree.

3. The Ministry of Natural Resources and Environment shall take charge and cooperate with the Ministry of Construction in instructing local governments to plan land use and ensure sufficient land for social houses projects; cooperate with the Ministry of Construction in providing guidance on the issuance of Certificate of rights to use lands, ownership of house and property on land to the entities eligible to buy, lease, and lease purchase social houses according to this Decree.

4. The State Bank of Vietnam shall:

a) Take charge and cooperate with the Ministry of Construction in suggesting credit sources for support of social houses development and request the Prime Minister to decide.

b) Take charge and cooperate with the Ministry of Construction and the Ministry of Finance to instruct credit institutions, commercial banks and financial institutions to grant loans to buyers and tenants of social houses, investors in social houses projects, households and individuals that invest in social houses with lower interest rates according to Point d Clause 1, Point c Clause 3 Article 12, and Clause 6 Article 15 of this Decree.

c) Take charge and cooperate with other Ministries and relevant agencies in promulgating regulations related to the use of housing and constructions that are mortgaged for loans; the procedure and conditions for taking loans to buy or lease purchase social houses.

Article 25. Responsibilities of the People’s Committees of provinces

1. Provide guidance on surveying the demand for social houses to make plan the investment every year, every 05 year or longer.

2. Review and adjust the amount of land for social houses development in the overall planning and local planning; withdraw the land allocated to the investor that fail to run commercial housing development projects on schedule or not at all; withdraw and allocate the unused 20% land belong to commercial housing and new urban area projects to the investors that wish to build social houses.

3. Specify and announce the standards and conditions for buying, leasing, and lease purchasing social houses; monitor the sale, lease, and lease purchase to minimize profiteering.

4. Promulgate regulations on incentives to attract economic sectors to investment in social houses development, regulations on management and operation of local social houses.

5. Carry out inspection, supervision, and impose penalties for the violations related to the purchase, lease, and lease purchase of local social houses.

6. Request investors in local social houses development projects to periodically report the progress of such projects to local housing authorities; summarize and assess the social houses development annually. The Ministry of Construction shall aggregate the reports and send a report to the Prime Minister.

Article 26. Responsibilities of manufacturers in industrial parks

1. The manufacturers in industrial parks must have financial sources to support the social houses development to satisfy demand for housing of their workers, who are facing difficulties in housing.

2. The new companies and the companies that expand their scale must determine the demand for housing of their workers and make a plan for providing sufficient housing for their workers.

Chapter 6.

IMPLEMENTATION

Article 27. Transitional provisions

This Decree shall apply to the formulation, assessment, approval for investment or changes of the projects for housing of workers in industrial parks and low earners in urban areas that have been made under the Decision No. 66/2009/QD-TTg and 67/2009/QD-TTg of the Prime Minister, but have not been approved by the People’s Committees of provinces, or have been approved but then changed by the investors.

Article 28. Effect

1. This Circular takes effect on January 10, 2014.

2. Articles 31, 32, 33, 34, 35, 36, 37, 38, 39 and 40, Point c Clause 4 Article 58 of the Government s Decree No. 71/2010/ND-CP dated June 23, 2010 elaborating and providing guidance on the implementation of the Law on Housing; Section II and Section III Part II of the Government’s Resolution No. 18/NQ-CP dated April 20, 2009, the Prime Minister’s Decision No. 66/2009/QD-TTg dated April 24, 2009 on introduction of some policies on development of housing for workers in industrial parks, and the Prime Minister’s Decision No. 67/2009/QD-TTg dated April 24, 2009 on introduction of some policies on development of housing for low earners in urban areas are annulled.

3. Ministers, Heads of ministerial agencies, Heads of Governmental agencies, Presidents of the People’s Committees of provinces are responsible for the implementation of this Decree./.

For the Government

The Prime Minister

Nguyen Tan Dung