Resolving disputes arising from housing contracts must strictly comply with the provisions of the law. These disputes are among the most frequently encountered in society, often revolving around matters such as deposits, purchase and sale agreements, and procedural deficiencies where legal conditions of the contract have not been properly met.
In this article, NPLAW provides legal advice on issues related to the resolution of disputes over housing contracts.
I. Current situation regarding housing contract disputes
Currently, disputes over housing contracts have become increasingly common in Vietnam. These disputes frequently arise during the negotiation, performance, or transfer of contractual agreements between parties, including developers, construction contractors, and purchasers. The disputes may relate to issues such as ownership rights, construction quality, handover timelines, contract value, and other financial obligations.
Common causes of disputes over housing contracts include:
- Substandard construction quality: One of the most prevalent causes of dispute is that the construction quality fails to meet the standards or commitments stated in the contract. Purchasers often encounter problems such as deteriorating structures, construction defects, or deviations from the original design drawings.
- Failure to meet handover deadlines: Delays in the handover of the property significantly impact the purchaser’s living arrangements and may result in substantial financial losses, thereby becoming a major source of dispute.
- Ambiguous contractual terms: Disputes frequently stem from vague or poorly defined provisions, particularly those relating to the rights and obligations of the parties, payment methods, warranty clauses, and remedies for contract breaches.
- Violations of ownership and transfer procedures: Disputes may also arise due to unclear ownership status, missing legal documentation, or improper transfer of property rights.
- Disagreements over contract value and payments: Discrepancies in the contract price, payment terms, or unanticipated additional costs during contract execution are also typical grounds for dispute.
II. Legal provisions related to disputes over housing contracts
1. What is a dispute over a housing contract?
A house is a type of construction used for residential purposes, serving the daily living needs of individuals and families. Houses may be used for residential and certain non-residential purposes, provided they are not prohibited by law. Transactions involving housing may include sale, lease-purchase, lease, donation, exchange, mortgage, capital contribution, lending, accommodation without rent, or authorized management, collectively referred to as “housing contracts,” as outlined in Article 163 of the Housing Law 2023.
Definition: A dispute over a housing contract refers to a conflict or disagreement between parties arising from contractual transactions related to the sale, lease-purchase, lease, donation, exchange, mortgage, capital contribution, lending, accommodation without rent, or authorized management of housing.
2. What dispute resolution methods are available?
Under Article 194 of the Housing Law 2023, dispute resolution methods include:
1. The State encourages parties to resolve housing disputes through conciliation.
2. Disputes concerning ownership, usage rights, or transactions relating to housing, as well as disputes over the management and operation of apartment buildings, shall be resolved by the Court or commercial arbitration in accordance with the law.
Therefore, in the event of a housing contract dispute, the parties may choose the following dispute resolution methods:
- Negotiation and Mediation;
- Arbitration;
- Court proceedings.
3. Which authorities are competent to resolve housing contract disputes?
Competent authorities to handle housing contract disputes in Vietnam include:
- The People’s Court: Has jurisdiction to resolve disputes when parties are unable to reach a resolution through negotiation or other means.
- Arbitration Council: Arbitration is a non-judicial dispute resolution method and is applicable when parties have agreed to resolve disputes through arbitration.
- Provincial People’s Committee: Has jurisdiction over disputes involving local-managed housing (i.e., public housing management or use).
III. Questions regarding housing contract disputes
1. In what situations do housing contract disputes commonly arise?
Housing contract disputes typically arise in situations where parties disagree over rights or obligations. Common cases include:
- Delay in property handover: Developers or contractors fail to deliver the property within the agreed timeline.
- Construction quality issues: Buildings do not meet contractual quality standards or fail to comply with applicable construction regulations.
- Disputes over contract value and payments: Disagreements on contract value, payment schedules, or unexpected additional costs.
- Ownership and legal document issues: Unclear property ownership or legal documents, and improper or incomplete transfer of ownership rights.
- Warranty and repair obligations: Failure of the developer or contractor to fulfill warranty obligations or perform necessary repairs.
- Issues related to issuance of ownership certificates: Disputes may arise when developers fail to complete legal procedures for registering ownership in favor of the purchaser.
- Disputes over area and property valuation: Conflicts over discrepancies between actual usable area and contractual terms.
2. Does the lack of notarization or certification cause the contract dispute?
Under Article 164 of the Housing Law 2023, transactions involving sale, lease-purchase, donation, exchange, capital contribution, or mortgage of housing must be notarized or certified, except in the following cases:
- Housing donated by organizations as part of social welfare programs (e.g., for the poor or veterans);
- Sale or lease-purchase of public assets, including public housing and housing designated for social use or resettlement;
- Capital contribution transactions involving housing where at least one party is an organization;
- Housing transactions involving lease, lending, accommodation without rent, or authorization of management.
Therefore, most housing contracts are required to be notarized or certified. The absence of notarization or certification may lead to disputes and entails significant legal risks, such as:
- Lack of legal enforceability: Contracts lacking notarization may not be legally recognized by competent authorities, making enforcement difficult during a dispute.
- Challenges in litigation: One party may challenge the contract on the grounds that it was not validated by a competent notary or certification body, thereby undermining its evidentiary value.
- Verification of voluntariness: Notarization confirms that the contract was entered into voluntarily by competent parties without coercion, deception, or undue influence.
3. What is the statute of limitations for initiating a lawsuit in housing contract disputes?
According to Article 429 of the Civil Code 2015:
- The statute of limitations for initiating legal action concerning contractual disputes is three (03) years from the date on which the entitled person knew or should have known that their lawful rights or interests were infringed.
Thus, the statute of limitations for initiating legal proceedings over a housing contract dispute is three (03) years from the date on which the injured party became aware or should have become aware of the infringement of their rights.
IV. Should you consult a lawyer in the event of a housing contract dispute? How?
Consulting a lawyer is strongly recommended when involved in a housing contract dispute. A qualified legal professional can help you navigate the legal process effectively, ensure compliance with applicable laws, and protect your legitimate rights and interests, especially in complex or prolonged disputes.
NPLAW is a law firm that provides legal consulting services to clients regarding the resolution of housing contract disputes. For inquiries or assistance, please contact us using the following details:
