Project land law is extremely complete and detailed, should be consulted in the US

Project land law is extremely complete and detailed, should be consulted in the US Project Legal Status for Buyers and Sellers

The legal status of a project has always been regarded as a core factor by both buyers and sellers. It is decisive for the “success” of a transaction and is one of the most important aspects to thoroughly research and clearly determine before making a purchase or investment decision.

Project legality refers to all the documents and paperwork that an investment project must have in accordance with legal regulations. Typical examples include the detailed 1/500 zoning approval decision, construction permits, land use right certificates, and so on. These legal procedures are always associated with the project from preparation, implementation, to completion.

Today, Phu Minh Hung will provide you with information about the types of documents related to real estate projects.
Project land law is extremely complete and detailed, should be consulted in the US

Investor’s Real Estate Business License

The real estate business and investment license is issued by competent authorities. This license certifies whether the project investor has the right to conduct real estate business and investment activities. Typically, an entity owning land but without a business license is not authorized to publicly sell commercially. A reputable investor must first be licensed by the relevant authorities for real estate business and investment.

Consequences when an investor lacks a real estate business license:

• Projects under construction or development will be forced to stop when inspected. The investor must complete procedures to resume investment and construction.

• Without the business license, the investor cannot publicly sell to many buyers; such actions are illegal and subject to penalties.

• Authorities may confiscate or seal assets if the license is not presented. Any business or construction activities without permission are illegal.

Residential Land Type

1/500 Detailed Planning Approval

The 1/500 detailed plan, along with the 1/2000 plan, are the two most commonly used planning documents for urban construction projects. The 1/500 plan is a detailed construction plan that concretizes components specified in the 1/2000 plan. These plans must maintain overall consistency.

Through the 1/500 plan, potential buyers can verify the legal status of the land plot they intend to purchase. If discrepancies are found in this plan, further investigation is advisable to minimize future risks.

Specifically, the overall 1/500 plan must fully include indicators such as population, social infrastructure, and architectural space. These elements must be interconnected and consistent, demonstrated through physical features such as fences and pathways.

Projects Without a Detailed 1/500 Plan

• Such projects lack legal design approval. Competent authorities have not yet approved project elements.

• Selling projects without an approved 1/500 plan may expose buyers to risks like changes in property structure, size, layout, or location.

• Projects without a 1/500 plan might lack full legal status—no land use certificates or land allocation decisions—which increases the risk of fake or fraudulent properties.

Construction Permit

A construction permit is a document issued by state authorities authorizing individuals or organizations to build houses or structures within the scope of the permit. Buyers need to carefully check this permit because without it, they risk penalties as described above, and their rights may not be protected.

Conditions for a project to be granted a construction permit:

• Compliance with approved detailed construction planning.

• Construction within cultural heritage or historic preservation zones must ensure density limits, green space, and parking without affecting landscape or environment.

• Maintain required distances from sanitation works, hazardous chemical storage, or other potentially polluting facilities to protect neighboring residents.

• Adhere to regulations on road boundaries, construction boundaries, urban design, and safety for adjacent structures.

• For high-rise or special-grade buildings, underground basement design is usually mandatory unless otherwise specified.
  Project land law is extremely complete and detailed, should be consulted in the US

Land Use Right Certificate (Pink Book)

The “Pink Book” (also called “Red Book”) is the highest legal document certifying land use rights in Vietnam. It serves as the clearest and most transparent evidence of land ownership legality. A project with a land use certificate means the land area has been legally authorized by the state.

Every real estate project must have a land use right certificate. From this certificate, multiple land plots can be subdivided. The certificate must be issued by authorized agencies with specialized official forms. Typically, approval authority is at city or provincial levels.

Foundation Acceptance Document

According to the Real Estate Law dated 15/07/2015, a foundation acceptance report is required before signing sales contracts in real estate projects. This document certifies that the investor has completed the foundation phase of the project and serves as the basis for issuing land use rights certificates to buyers. It also demonstrates the investor’s commitment and increases the legal validity of the sales contract, protecting buyers if problems arise.

Contracts Buyers Should Avoid Due to High Risks:

• Capital Contribution Contracts: These require customers to jointly invest money with the investor to build the project. The risk is high because if the investor goes bankrupt or the project is delayed, the customer's assets may be lost.

• Deposit Contracts: Similar to reservation contracts but with more legal weight. These carry risks as funds may be frozen if the project is delayed or not officially launched.

Bank Guarantee Documents

These documents ensure the investor’s financial obligations for future projects. If the investor fails to build or faces risks, the bank guarantees to reimburse customers. Banks providing guarantees also offer preferential loan programs for purchasing real estate, with loans up to 65–70% of the property value.
Project land law is extremely complete and detailed, should be consulted in the US

Other Documents

• Fire Prevention and Fighting Permit: Recently emphasized due to tragic fire incidents, this permit is an essential legal document for projects. Projects lacking this permit cause concern for buyers.

• Relevant Tax Documents: Taxes are mandatory obligations for investors. Failure to fulfill tax duties or tax evasion can cause projects to be suspended and lead to government enforcement and penalties.