HOUSING INVESTORS MUST GET BANKS GUARANTEE: CIRCULAR

The new SBV document affirmed the Law on Real Estate Business, which will take effect on July 1, 2015.

The law stipulates that property investors can sell or rent houses which form in the future only on the basis of a guarantee from commercial banks in order to protect the rights and interests of the buyers. It tasks the SBV with creating a list of banks that are capable of providing adequate assurance.

The central bank has not yet provided this list but said in the circular that cooperative banks and certain financial companies, along with foreign banks' branches, could also provide these guarantor services.

It said the guarantors would have to pay the buyers or renters the money they had advanced to the investors if the investors failed to transfer the property on schedule.

The investors can be issued a guarantee if they prove their civil capacities are adequate in conformity with the law, their transactions are legal, and they are capable of refunding the money to the guarantors.

Circular No. 07 will replace Circular No. 28/2012/TT-NHNN, issued in October 2012, on banking guarantees.

Source: VIR