Oct 23, 2012

Vietnam - Property market freezing, developers shoot the moon

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VietNamnet Bridge – Not only small real estate developers, but the big guys have also got involved in troubles, when they cannot implement their projects and pay buyers money back.

The big guys summoned to appear in court

The Hanoi Police has recently searched the head office of the Hong Ha Building Material Import – Export Company to clarify the denouncement of “betraying trust, appropriating others’ assets.”

Though the company’s project on developing a residential quarter for the ancient streets’ dwellers to move to and settle down was not approved by the competent agencies, the company still put its projected apartments on sale. To date, the company has received 200 billion dong from buyers paid for the apartments on paper.

Hundreds of customers, who registered to buy La Fontana apartments, developed by the Gia Tue Investment Company, have also decided to withdraw their money form the project. The buyers paid for the registered apartments monthly, which has been used by the company as the capital to execute the project.

While buyers fulfill their commitments by making payment monthly, the developer still has not delivered products as committed before, though the deadline came many days ago.

Finally, the buyers have asked the developer to pay money back to them. However, the investor has been trying to hide themselves to avoid the buyers.

The customers of Ecopark Tuan Chau have also been put on tenterhooks. The site clearance work has not been completed over the last 18 months, while the 1/500 project program has not been approved, and technical infrastructure works have not been set up yet.

The developer of Mekong Plaza project in Geleximco urban area – Mekong Land – is also facing the same problem. Customers, who registered to buy the apartments here, have demanded money back after they realized that no action has been taken by the investor to implement the project.

Tens of buyers have decided to take legal proceedings against Viglacera, after their failed efforts to claim for their benefits.

The customers said Viglacera, which is the developer of the Xuan Phuong project, did not fulfill its commitments made to customers. Meanwhile, ignoring the complaints by customers, the investor keeps quiet and refuses to fulfill its duties. Since the developer has been slow in implementing the project and in delivering apartments, customers say, it has to pay interests for the sums of capital contributed by the customers.

The Hanoi Time Tower project developed by PVCR has also fallen into trouble. The customers said they began contributing capital for the project implementation in 2010. However, the ground floor still had not been completed by September 2012.

A lot of other projects run by the enterprises in the oil and gas sector have also been left “untouched.”

The conflicts between contractors and developers

People believed that there always exists a close relation between developers and contractors, because they were on the same boat. However, even contractors have also been refused to pay money for their works. As a result, contractors have to go to law against the developers.

Some days ago, the Energy Industry Development Company sent a letter to press agencies, denouncing the Song Da Urban Development Company for deliberately delaying the payment of 11 billion dong, which is the pay for the works the company completed for the Song Da project in Ha Dong district.

Meanwhile, the Long Giang Investment and Urban Development Company has sued AZ Land, claiming the payment of 1.8 billion dong. An executive of the company said it has to take legal proceedings to get money back, because they company itself now needs money to pay to its partners.

Nam Phong


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