The revised Land Law was finally passed by the National Assembly last week.
David Lim, a partner of Zico Law firm and also head of the Vietnam Business Forum’s (VBF) Land Subdivision, told VIR that the new law had made an effort to remove unintentional inconsistencies in the use of terminology which has caused confusion in the past.
“There is greater clarity on the rights of foreign investors and foreign invested companies. Compensation for land is also intended to be extended to cover more scenarios involving foreign investors,” Lim said.
He further commented that in terms of land prices, there were provisions to more clearly define valuations which would reduce the uncertainty faced by land users. “This will give more confidence to investors to determine the financial viability of their projects,” he added.
Regarding the mortgaging of land, the requirement that land could only be mortgaged to raise funds for production or business purposes alone was also expected to be removed. “This will expand the right of land users to raise funds by using their land as collateral,” Lim added.
The revised Land Law which was passed last Friday was long overdue. The Land Law was first passed in 2003 and was subsequently amended in 2008, 2009 and 2010.
“Based on the drafts circulated prior to today, tremendous efforts have been invested in streamlining the law with the developments in the real estate sector and the use of land over the years,” Lim said.
Chau Thi Thu Nga, a deputy from Hanoi said that the law would have a positive impact on the estate market. “This law is will be welcomed by the public and domestic and foreign investors,” Nga said.
Nga explained that the law clearly identified land compensation payments and regulations related to repossessions which had been a concern for many years.
“The law in combination with the new Constitution will synchronise the legal framework regarding land management and financial mechanisms for investors and real estate funds and it should encourage investors,” Nga said.
The new land law adds regulation for land repossessions in some specific cases such as national defence and education.
The law also assigns the government to issue detailed regulations on the process and procedures to repossess land for public use and how compensation would be paid.
One of the most important changes in the new land law was the participation of an independent consultant to adjudge land prices, in order to have the more exact and fairer evaluations made on a case-by-case basis.
The draft received seven rounds of consultation with input from the public, organisations and agencies prior to its compilation.
The newly passed land law combined 14 chapters with a total of 212 articles and will be implemented from July 1, 2014.
By Bich Ngoc