The Vietnamese version is available here.

One year after the Land Law 2024, the Real Estate Business Law 2023, and the Housing Law 2023 came into effect, Vietnam’s real estate legal framework has begun to show both its reform momentum and the challenges of implementation.

Vilasia, in collaboration with The Saigon Times, is pleased to present a series of analytical articles by Vilasia’s Nhung Nguyen, offering a one-year review of how these landmark laws are being implemented in practice. Through real cases and regulatory analysis, the series highlights key issues emerging in areas such as land financial obligations, project transfers, delayed projects, commercial housing development, and project implementation models. The series will aim to provide practitioners, investors, and policymakers with a clearer picture of where the new legal framework is working as intended and where further clarification and adjustment may be needed.

The series focus on five main topics:

(i) Land-Related Financial Obligations: The Strain of Balancing Interests;
(ii) Transfers of Real Estate Projects: Practical Bottlenecks in Implementation;
(iii) Delayed (“Suspended”) Projects: Responsibility Cannot Be Placed Solely on Investors;
(iv) Development and Management of Commercial Housing: Bright Spots and Persistent Bottlenecks; and
(v) Apartment Building Governance: Maintenance Funds Remain a “Hot Spot”.

Below is the third in the series entitled “Delayed (“Suspended”) Projects: Responsibility Cannot Be Placed Solely on Investors”, originally published in Vietnamese in The Saigon Times on August 27, 2025. The digital version is available here.

Delayed (“Suspended”) Projects Responsibility Cannot Be Placed Solely on Investors

Lawyer Nguyễn Thị Nhung (*)

(The Saigon Times) – LTS: After one year in effect, the new laws — the Land Law 2024, the Real Estate Business Law 2023, and the Housing Law 2023 — have gradually come into practice.

However, reality shows that many obstacles remain, stemming both from inconsistencies in the law and from divergent interpretations and applications by government authorities. The Saigon Times presents a series of articles analyzing key issues in the implementation of these laws.

The failure of real estate projects to meet their registered investment schedules has become prevalent nationwide. Many projects have repeatedly sought extensions and been required to pay additional land-use fees due to delayed implementation, while quite a number now face the risk of land recovery.

Project delays cause damage not only to the State and society by wasting land resources and compromising urban aesthetics but also to enterprises, as they must bear additional maintenance, operational, and financial costs throughout the waiting periods, including the supplemental fee for land-use extension.

A Strict Legal Framework

Article 81 of the Land Law 2024 clearly specifies two instances where land may be recovered due to failure to put it into use on schedule:

• Non-use of land: When project land fails to be put into use within 12 months of the on-site handover date.
• Delayed use of land: When land use lags 24 months behind the schedule registered in the investment project.

In essence, regulations on land recovery for delayed use are not new. Given the severity of such violations, similar provisions have consistently appeared in the Land Laws of 1987, 1993, 2003, and 2013. However, the Land Law 2024 introduces several adjustments:

First, the new regulation expands the scope of application to better reflect reality. Specifically, it adds cases involving the conversion of land-use purposes and the recognition of land-use rights, in addition to the previously regulated cases of State land allocation or lease for investment projects. Notably, transferees of real estate projects are also subject to the supplemental fee requirement, even when they acquire the land through project transfer from another investor rather than directly from the State (in cases where the transferee is a domestic enterprise).

Second, the new regulation clearly distinguishes the starting point for determining delays in land use in each case. Specifically, the period for “non-use” is calculated from the date of on-site land handover, whereas “delayed use” is measured against the schedule recorded in the investment project. Under previous regulations, both cases were ambiguously tied to the “schedule in the investment project” and the requirement to “put land into use upon on-site land handover date” which led to inconsistent interpretations and applications in practice.

Regarding the formula for calculating the supplemental fee, previously, it was not until two years after the Land Law 2013 took effect that Circular 332/2016/TT-BTC on land use levies and Circular 333/2016/TT-BTC on land rent were issued to introduce the formula for this additional payment.

Regarding the new law’s guidance, Decree 103/2024/ND-CP on land rent and land use levies (Decree 103), which took effect simultaneously with the Land Law 2024, has clarified the calculation method for the amount payable in cases of land-use extension, rather than waiting for circulars to be issued as in the past. Accordingly, Decree 103 establishes a unified calculation method applicable to all land-use extension cases (regardless of whether the project pays annual land rent, one-off land rent, or land use levies). Specifically, the calculation is as follows:

Supplemental fee = Extended Land Area × Land Price in the Land Price Table at the time the competent authority issues the land-use extension decision × 2% × (Extension Period in months / 12)[1].

Thus, this amount is calculated based on the land price in the Land Price Table at the date of the land-use extension decision. In contrast, under the previous regulations, this supplemental fee might have been based on the land price in the Land Price Table or calculated according to annual land rent prices determined by comparison, subtraction, or residual methods, depending on the specific case[2].

Current regulations apply only to cases where the investor is granted a land-use extension. There are no specific provisions for instances where the delay is not approved or where an extension has not yet been sought. In contrast, under previous rules, investors faced both land recovery by the State without compensation for land or assets and the obligation to pay a supplemental fee for the period of delay.

Regarding force majeure cases where investors are exempt from the supplemental fee or land recovery, Decree 102/2024/ND-CP detailing the implementation of a number of articles of the Land Law 2024 (Decree 102) has added several cases compared to the previous regulations in Decree 43/2014/ND-CP and Decree 10/2023/ND-CP, including:

• Cases where competent authorities apply provisional emergency measures, distraint, or freezing of land-use rights and assets attached to land in accordance with the law, but the land user is subsequently permitted to continue using the land;
• Administrative decisions or administrative acts by competent authorities that constitute objective obstacles not attributable to the fault of the land user and directly impact land use[3].

These provisions represent a significant advancement in legislative thinking toward protecting investors, as for the first time, land laws clearly stipulate situations where investors bear no responsibility and are therefore not subject to financial sanctions or land recovery. This serves as an important legal basis enabling enterprises to be exempted from liability when the cause of delay is due to objective factors, particularly in cases of legal disputes or delays caused by state competent authorities.

The Reality: Many Hidden Corners

According to practical surveys, the causes of real estate project delays can be categorized into two main groups:

Group of weak enterprises or those with ulterior motives for intentional delay: After receiving project and land allocation, many investors lack the financial or technical capacity to implement the project on schedule. Others intentionally delay progress to hoard land, waiting to transfer it or hoping for price appreciation.

In these cases, land recovery is both necessary and appropriate. With current clear regulations, state competent authorities can and absolutely must impose strict sanctions, particularly for projects that have been delayed for years without commencing construction or those left unfinished, which mar the urban landscape.

Group of projects “stuck” in administrative bottlenecks: In many cases, investors genuinely wish to expedite project implementation but become entangled in procedures related to planning, land, investment, design, or construction and related matters.

Some projects require only minor adjustments to spatial layout or architectural landscape, and although these do not alter planning criteria, they still necessitate planning adjustment procedures. This process often lasts for months even if the investor is proactive. For larger changes such as the subdivision or merger of works, the processing time can extend into the second year from the date of dossier submission. Another significant bottleneck is the determination of land-related financial obligations. For instance, a housing project in Hanoi was allocated land in November 2023, yet it was not until February 2025 that the land price was approved for calculating the land use levy. In such situations, investors need to review the entire administrative procedure process. If there are grounds to prove that the delay was caused by state competent authorities, they can prepare an explanatory dossier to request consideration for the exclusion case as prescribed in Clause 1, Article 31 of Decree 102.

Delays frequently stem from the interdependence of administrative procedures across different authorities, which causes the entire licensing process to grind to a halt. For instance, a project might exceed its registered investment timeline while undergoing planning adjustment procedures. Consequently, the planning authority suspends the adjustment process and requires the investor to contact the investment management authority to extend the project schedule. This extension requires opinions from multiple relevant authorities and can last from several months to a full year, and only upon completion can the investor return to the planning adjustment process. In another case, the land management authority suspended land allocation procedures to await confirmation from the investment authority regarding whether previous planning changes necessitated an adjustment to the investment policy approval. Although the answer was negative, the investor still lost several additional months before the land allocation dossier could be processed further.

For projects stalled due to a lack of clear guidance or overlapping and conflicting laws, it is difficult for investors to justify their situation to qualify for any force majeure cases under Clause 1, Article 31 of Decree 102 to avoid supplemental fees or land recovery. A typical example is the EIE Commercial Center project in Hai Phong City. Although the investor explained a series of obstacles encountered over many years of administrative procedures, the project was still recovered, which caused significant damage and led to serious frustration for the investor[4]. In such situations, legal support must be considered a priority to avoid creating further barriers and stifling investment motivation. Handling measures (whether project recovery or mandatory supplemental financial obligations , or other relevant measures) should only be applied in cases where there are sufficient grounds to determine that the delay is solely due to the subjective fault of the investor.

Thus, the efforts of law-making authorities to amend and supplement regulations have contributed to making the legal system increasingly clear and closer to the reality of project implementation. However, to comprehensively resolve bottlenecks, it remains necessary to continue refining the legal framework. More importantly, implementation must be reformed across all levels and sectors to ensure that new regulations are interpreted and applied consistently, with a spirit of removing difficulties and supporting investors. Only then can the investment environment, particularly in real estate, be truly revitalized to create a foundation for sustainable recovery and development.

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(*) Vilasia Law Firm

[1] Decree 103/2024/ND-CP, Article 15.

[2] Circular 332/2016/TT-BTC, Article 1 and Circular 333/2016/TT-BTC, Article 2.

[3] Decree 102/2024/ND-CP, Article 31.1.

[4] Read: “Why EIE Company did not ‘wholeheartedly accept’ the land recovery by Hai Phong City?” danviet.vn, https://danviet.vn/vi-sao-cong-ty-eie-khong-tam-phuc-khau-phuc-khi-bi-thanh-pho-hai-phong-thu-hoi-dat-d1337126.html (last accessed on August 3, 2025).