Recognize condotel in accordance with the nature of tourist accommodation service business

If condotel is recognized as a real estate, a product in real estate business must implicitly be granted a house ownership certificate, while this is a product of tourist accommodation service business.

In the afternoon session of June 4, before the question of QAQ on the legality issue of condotel, Construction Minister Pham Hong Ha said that the revision of relevant standards and regulations, promulgated management regulations operating to new types of real estate (condotel,...) would be completed in 2019.

Lawyer Truong Anh Tu

Commenting on the above problem, Lawyer Truong Anh Tu - Director of TAT Law Firm said that when hearing the National Assembly deputies questioning Minister Pham Hong Ha, I found that most of the questions only Concerned about a problem when completing the policy mechanism for the condotel and not mentioning the implications of that as well as giving their opinions on this type of real estate. Therefore, the Minister answered that the Ministry of Construction will develop a regulation on condotel management in 2019.

"As I have previously commented, the management rules for management of certain condotel must be handed to the Ministry of Culture, Sports and Tourism, which has functions, authority and management experience towards tourism. Thus, the Ministry managed the condotel" said Lawyer Tu. Lawyer Tu also expressed his views: "First of all, we need to understand what products are in the real estate market? In my view, the real estate market includes land, villas, townhouses, apartments, residential land...

If the real estate market only includes these components, it is clear that the legal corridor of the condotel will not affect. Because condotel is essentially a tourism product, it is a resort activity, a hotel stay activity, one of the services of the tourism industry.

We need to separate condotel, which is not a real estate product, so the State's policy and legal mechanism with this product will not affect the market. However, this long time, people are still exchanging the concept that makes us misunderstand.

Condotel at Phukhet, Thailand

Besides, Mr. Tu also commented: "I think that, if from the Ministry of Construction's perspective, the construction of condotel can go towards the "shaping" condotel as a real estate product. And if this is a real estate product, it will lead to the following consequences:

Firstly, about land, infrastructure and population planning. As we know, before building a residential area or a tourist service business area, the central competent authorities or the provinces and cities have to develop specific development plans. The Condotel has the nature of this type of business and service, so when it is built, it must be in accordance with the construction plan to develop tourism in each locality and in accordance with the land fund for this development. If condotel is recognized as a real estate, a product in real estate business must implicitly be granted a house ownership certificate, to confirm ownership of long-term housing property for the owner. In case of issuing house ownership certificate for condotel apartments, it will "destroy" the overall planning of the locality, greatly affecting the management, planning, land use plan and following population.

Secondly, there is a potential for arising disputes. If the land use right certificate for condotel apartments is issued while these apartments are used for the purpose of staying and there is a great attachment to the investor, it is easy to create disputes. Disputes between investors and "buyers" in the process of managing and using management costs. The risks of ownership ownership are shared separately between the investor and the condotel buyer. In addition, there are potential risks when investors use apartments to mortgage banks without the ability to pay debts and risks arising when investors do not comply with commitments on profits...

Thirdly, on management and use. Who will be responsible for repairing and maintaining the apartment when degraded. Who will be obliged to pay the management and service fees of the apartment. What if the owner wants to stay in condotel for a long time and turn the hotel into a residential area... A series of problems for this type of mixture is difficult to solve, if the law is amended to consider the condotel hiring to buy and sell hotel apartments to grant house ownership certificate for condotel. 

“I think that the law needs to adjust the condotel according to its nature, in the direction of positioning this type of tourism accommodation service business. At the same time, adjust the contract of "buying and selling apartments" as the investor does today into an apartment-hotel lease contract. We should not because of the mandatory situation but add conflicting concepts such as "uninhabited residential land", Lawyer Tu said.

According to Tien Anh