Condotel in Vietnam: legally problematic transactions, law on condotel in Vietnam, condotel in Vietnam, condotel law in Vietnam, Buying Condotel in Vietnam

Buying Condotel in Vietnam: legally problematic transactions

Condotel maybe not a novel term anymore, but such definition only arrive in Vietnam recently. Since 2017s, Condotel has been a trending topic for real estate, many projects have been deployed such as Havana Nha Trang, CocoBay Da Nang, Condotel Grand World Phu Quoc,… However, Condotel transactions are problematic as Condotel itself has not been legally defined in Vietnamese law system.


A condo-hotel hybrid model of building, condotel serves both as a lodging services provider and other relating services. Furthermore, this model allow “possession” just like a condo; which means instead of only one owners for the whole building, each room belong to different owner. Condotels are often constructed in large cities or resorts. Thus makes them ideal for any person who is in search of luxury lodging services for the holiday. Even more so, the condotel owner will never have to worry about vacancy, which is a huge concern in holiday.

Because of such unique characteristics, condotel requires special legal framework on order to function. However, being able to function as both condo and hotel does not equal with regulating this model to the legal framework of neither condo nor hotel, or any other type of related real estate.

The problematic transactions

As mentioned earlier, one to fully own a condotel; which means this can be stated as one of the property in real estate. Condotel can be used in transactions such as sale, lease purchase, gifting, mortgage, or capital contribution fully to the owner’s will. However, which requirement condotel must met to do such transactions? Condotel serves as a hotel, which makes it obvious that such model can be stated as “tourist accommodation service business”; then it must be reasonable to follow Article 49 about “Conditions for tourist accommodation service business”, Law on Tourism 2017.

In the other hand, should it be reasonable to follow Article 118 about “Requirements applied to houses entered into transactions”, Law in Housing; since condotel also functions as property for housing? Or should we just consider this model as real estate, and regulate it in accordance to Article 9 about “Requirements in terms of real estate to be put on the market”, Law on Real estate trading 2014?

Or is it just better off following all three regulations?

What also is questionable is whether the sale of condotel in the future require bank guarantee as accordance to point 1, Article 56 about “Guarantee on off-the-plan building sale or lease purchase”?

The problematic rights over owners, buyers

The flaw just does not stop there! As each condotel can be own separately, owners must have certain rights over their porperties.

Regarding to ownership, whose ownership is it? There have already been regulations about who can buy, own or sell real estate. This is specifically regulated in point 2, Article 14 about “Entities entitled to purchase, receive, rent, or lease purchase real estate from real estate enterprises”, Law on Real estate trading. Accordingly, such entities can be oversea Vietnamese or foreign entities. However, since condotel is not yet legally categorized as house, tourism service or real estate, then shall such rights be retained when purchasing condotel?

Relating about rights and ownership, how much can one possess condotel? As accordance to point 2, Article 161 about “Rights of foreign entities as homeowners”, Law on Housing; “entities may not buy, rent and purchase, receive, inherit and own more than 30% of apartments in an apartment building; or more than 250 houses regarding separate houses including villas, row houses in an area whose population is equivalent to a ward-administrative division”. What if 30% of the condotel includes more than 250 houses? Does this regulation still count? Can one purchase more than 30% of condotel?

More importantly, how is certificate of ownership granted when it comes to condotel? Should it is granted, how long will it last? In reality, some investors make claims that granting long-term condotel ownership certificate is possible. However, should condotel not be considered housing constructed on residential land, it would be impossible to register permanent ownership; or ownership period that is longer than that of the construction. Which means it is only acceptable to register rental period of the commercial land service.

Problematic transactions not only for individuals…

Even if all the problematic transactions solved, there would still be confusing matters after the transactions.

For example, can condotel in a resort be place of residence? Theoretically, yes it can. “The place of residence of a citizen means a lawful domicile where such person regularly lives. “The place of residence of a citizen may be a place of permanent residence or a place of temporary residence.” As described in point 1, Article 12 of the Law in Residence. However, authorities have not yet approved such matter in reality. So, if one purchase a condotel for housing, registering his/her place of residence may be troublesome.

But also the authorities

As mentioned in the example above, authorities will face many difficulties when it comes to any transactions or registrations relating to condotel.

Another troublesome aspect may be the fire fighting and prevention. How can such procedure be executed? Following the regulations at point 1, Article 17 about “Fire prevention for dwelling houses and population quarters” or at Article 27 about “Fire prevention for hospitals, schools, hotels, rest houses, dancing halls, theatres, cinemas and other crowded places”, Law on fire prevention and fighting 2001?

Such matters make condotel transactions unattractive in Vietnam. Nevertheless, its huge potential of investment and profit making is undeniable. In order to make condotel show its true potential, a solid legal framework must be built.

ASL LAW is the top Vietnam real estate law firm. If you need any advice, please contact us for further information or collaboration.


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