On October 20, 2015, the government promulgated Decree No. 101/2015 / ND-CP (“Decree 101”) regulating the modernization and reconstruction of residential buildings. After six years (2015-2021) of entry into force, the implementation of Decree 101 encountered several difficulties leading to the slow and inefficient modernization and reconstruction of apartment buildings.
In an attempt to remedy the problems, on July 15, 2021, the government issued Decree No. 69/2021 / ND-CP (“Decree 69”) to replace Decree 101. Decree 69 also provides detailed rules for the implementation. implementation of certain articles of the law. on Residential Housing 2014 (as amended and supplemented from time to time) (the “Residential Housing Act”).
Addition of principles for upgrading and rebuilding apartment buildings
To deal with the current situation and resolve the aforementioned difficulties, Article 4 of Decree 69 adds the following principles:
a) Demolition of an apartment building following an incident, natural disaster, fire or explosion when this apartment building has not yet been included in the approved plan improvement and reconstruction of apartment buildings;
b) Realization of investments in stages by investors for the modernization and reconstruction of residential buildings in accordance with Decree 69; and
(c) No longer requires that land intended for the construction of social housing be reserved in accordance with the Residential Housing Act as part of a project for the modernization and reconstruction of apartment buildings.
Cases in which apartment buildings are demolished for reconstruction or for the construction of other works under plans
Since the elements for determining the cases in which residential buildings are demolished for reconstruction under Article 5 of Decree 101 and Article 110 of the Residential Housing Act are not clear, Article 5 of Decree 69 clarified several cases as follows:
a) An apartment building which must be demolished urgently following an incident, natural disaster, fire or explosion in accordance with the law;
(b) When the useful life of an apartment building expires or has not yet expired in accordance with the building law but the provincial residential housing management agency has reached a conclusion after the inspection provided for in article 5.2 of decree 69; and
(c) One of the main load-bearing structures of the building including the foundation, columns, walls or beams is badly damaged and does not meet the requirements for normal use but is not in the category required for construction. demolition in accordance with the above clause, although it is located in the area where there is an apartment building that is to be demolished by Article 110.2 of the Residential Housing Act.
Inspection and quality assessment of apartment buildings
The inspection and assessment of the quality of residential buildings under Article 6 of Decree 101 did not meet the requirements for quality of life and the environment for residents. Consequently, article 1 of chapter 2 of decree 69 provides that in addition to relying on the construction law, the delegated entities must also determine the criteria as stipulated in article 5 of decree 69 to identify the list of apartment buildings that must be demolished to be rehabilitated. construction. This regulation aims to remedy apartment buildings that have been partially damaged, although they can still be used, as these apartments have been severely degraded, no longer guaranteeing the environment and landscape in urban areas. Therefore, it is considered necessary to include these apartment buildings in the list of apartment buildings to be demolished for reconstruction.
Formulation and approval of modernization and reconstruction plans for apartment buildings
Decree 69 makes it possible to carry out the inspection and assessment of the quality of residential buildings after the issuance of the improvement and reconstruction plan for residential buildings. In this case, on a semi-annual basis, the provincial residential housing management agency is responsible for examining and arranging an inspection and assessment of the quality of apartment buildings and preparing a list of apartment buildings. in the category to be improved and rebuilt1, in order to report to the provincial people’s committee for approval and addition to the improvement and reconstruction plans for apartment buildings. This regulation should help local agencies to speed up the implementation of the renovation and reconstruction of apartment buildings.
Zoning of areas where apartment buildings are modernized and reconstructed
Several supplements and changes to the zoning of areas where apartment buildings are modernized and reconstructed have been included in Decree 69 as follows:
(a) The relevant state agency is responsible for organizing the formulation, assessment and approval of detailed zoning for areas where apartment buildings or complexes on the list for improvement and rebuilt must be improved and rebuilt. This regulation guarantees the possibility of drawing up a compensation and resettlement assistance plan, and of arranging temporary accommodation (collectively referred to as the “Compensation Plan”) 2 so that residents can select the investor of the project ;
(b) The formulation, assessment and approval of zoning for areas where buildings or apartment complexes are to be improved and reconstructed can be implemented in conjunction with inspection and assessment of the quality of these apartment buildings and the formulation and approval of the improvement and reconstruction plan for these apartment towers; and
(c) During the zoning formulation process, in addition to collecting the opinions of the residential community and those concerned in accordance with the regulations, the relevant agency may seek the advice of investors who wish to participate in the modernization projects and reconstruction to ensure its feasibility. and compliance with actual circumstances.
Selection of promoters of apartment building modernization and reconstruction projects
Decree 69 allows the selection of promoters of modernization and reconstruction projects for apartment buildings (i) when there is an agreement between the owners and a real estate company, or (ii) in the form of a call for tenders, or (iii) when the State directly implements projects for the modernization and reconstruction of apartment buildings.
(a) Regarding the agreement between owners and a real estate company, the following points should be noted:
- The selection of the contracting authority is carried out by collecting opinions from apartment owners under article 14 of decree 69 instead of holding a building meeting under decree 101;
- There must be at least 70% of the participating apartment owners and the selected company must be approved by at least 75% of the total participating apartment owners;
- If multiple companies apply to be the developer, the company with the highest percentage of owners agreement but not less than 51% of the total number of owners of that apartment building or complex giving their consent is selected as developer3; and
- The selection of the promoter of the project should be recorded in minutes and signed on behalf of the district people’s committee of the locality where the project is located, on behalf of the provincial agency for the management of residential housing, on behalf of the landlords. ‘apartments and by the selected company.
(b) The selection of a developer of a modernization and reconstruction project of an apartment building in the form of a call for tenders as stipulated in this article shall apply in the event of non- selection of the project developer by agreement between the owner and a real estate company. and other cases as stipulated in Article 15.1 of Decree 69. A winning investor according to a decision approving the results of the selection of the contractor is the developer of a project for the modernization and reconstruction of a building of ‘apartments.
(c) The State invests directly in the implementation of a modernization and reconstruction project of a residential building in the category stipulated in article 6.1 of Decree 69 with sources of capital stipulated in Section 36.3 of the Residential Housing Act (as amended in Section 99.6 (a) of the Public-Private Partnership Act 2020).
Compensation, relocation assistance and temporary housing development plans for apartment owners or users (the compensation plan)
Decree 69 defined the principles and content of the compensation plan, in particular4:
a) decide on the compensation coefficient k which is equal to once or twice the used area of an old apartment listed on a certificate issued punctually or to the area eligible for the issuance of the certificate, which is the basis for a developer of formulate a compensation plan;
(b) for owners living on the 1st floor using part of their apartment area for commercial purposes and the project allocates part of the area for commercial, service and commercial purposes in accordance with the approved zoning, then in addition to the right to compensation, if owners need to buy or lease part of the trading floor to do business, they can do so;
(c) for a head office or office accommodation, the owner of the latter is entitled to compensation according to the coefficient k = 1 multiplied by the former surface area of the land;
(d) if an owner is not able to organize the accommodation on his own, the Provincial People’s Committee where the project is located is responsible for leading the coordination with the investor to organize the temporary accommodation of this owner ; and
(e) if the temporary accommodation can be sold and the owner staying in that temporary accommodation wishes to purchase it, then that accommodation can be sold to the owner instead of being relocated.
Article 25 of Decree 69 clearly identified the moment of reclaiming or allocating land, leasing the land or granting an authorization for conversion for use of land to implement is implementing a modernization and reconstruction project for apartment buildings. In addition, Decree 69 also clarified the regulations relating to the exemption of the developer from land use charges, land rent and charges for land use conversion on land earmarked for development. implementation of the project.
Decree 69 also provides rules regarding (a) BT projects currently implemented under the Residential Housing Act of 2014 and Decree No. 101; and (b) the selection of project developers and compensation plans that were approved before the date of entry into force of Decree 69.
Decree 69 takes effect on September 1, 2021.