According to the Circular, foreign bank branches are added as guarantors for off-plan housing.
Procedure for guarantee for off-plan housing in Vietnam from December 10, 2024
- Based on the request of the investor or the counter-guarantor, the commercial bank or foreign bank branch shall consider, appraise, and decide to issue a guarantee to the investor;
- The guarantor and investor shall conclude the agreement on guarantee issuance in compliance with Article 26 of the Law on Real Estate Business 2023 and Clause 12 Article 3 and Article 15 of Circular No. 11/2022/TT-NHNN ;
- Based on the concluded agreement on guarantee issuance, the guarantor shall issue a written commitment to issue the letter of guarantee to the investor for the investor to send copies to the buyer after concluding the purchase or lease-purchase contract for housing;
- After the conclusion of the purchase or lease-purchase contract for housing, which stipulates the financial obligations of the investor, the investor shall send the contract to the guarantor to request the guarantor to issue the letter of guarantee to the buyer;
- The guarantor shall issue the letter of guarantee and send it to the investor for provision for the buyer according to the purchase or lease-purchase contract for housing, agreement on guarantee issuance, and written commitment to issue the letter of guarantee.
Rights and obligations of guarantors for off-plan housing in Vietnam
- The guarantor for off-plan housing may:
+ Refuse to issue the letter of guarantee to the buyer if the purchase or lease-purchase contract for housing is unconformable with relevant laws or after the termination of the agreement on guarantee issuance;
+ Refuse to issue a guarantee for amounts not subject to the financial obligations of the investor or amounts overpaid by the buyer exceeding the rate prescribed in Article 25 of the Law on Real Estate Business 2023 or when the buyer fails to present the letter of guarantee that the guarantor issued to the buyer.
- The guarantor for off-plan housing shall:
+ Issue the letter of guarantee before the deadline for housing delivery prescribed in the purchase or lease-purchase contract for housing when receiving the valid purchase or lease-purchase contract for housing and send it to the investor;
+ Where the guarantor and the investor conduct the premature termination of the agreement on guarantee issuance, by the next working day, the guarantor shall make a public announcement on its website and provide written notice for the provincial housing management authority where the housing project of the investor takes place, specifying that the guarantor will not issue the letter of guarantee to the buyer with the concluded purchase or lease-purchase contract for housing with the investor after the guarantor terminates the agreement on guarantee issuance with the investor.
Regarding the letters of guarantee issued to the buyer previously, the guarantor shall continue to carry out the commitments until the end of the guarantee obligation;
+ Fulfill the guarantee obligations in respect of the sum paid corresponding to the investor’s financial obligation, determined under the application for fulfillment of the guarantee obligation submitted by the buyer in conformity with the conditions for fulfillment of the guarantee obligation set out in the letter of guarantee.
Circular No. 49/2024/TT-NHNN comes into force as of December 10, 2024.
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