Why You Shouldn’t Take The Pink Book…
As you may know, in order to secure as proof of ownership when buying real estate in Vietnam, both locals and foreigners need to get the Sales and purchase agreement (SPA) or Pink Book.
What is the Sales and purchase agreement (SPA)?
This document is the previous form of evidence of the ownership of the property before getting the Pink Book.
What is the Pink Book?
The document is legally called the “Certificate of Land Use Right and Ownership of House and Other Assets on the Land”, but most people just refer to the document as the “Pink Book”.
Both SPA and Pink Book allow homeowners to fully perform the rights from buying the property. For example, you have the right to lease your property or affirm information related to inheritance.
It also allows you to:
- Use the house for your own personal intentions
- Rebuild, demolish, renovate, and more, as approved by the law of construction
- Allows you to sublet, mortgage, or sell the unit
How Pink Book looks like
Which authority issues the SPA?
Usually, the homebuyers get the SPA through the developers who submitted the SPA to the Ministry of Construction for review and approval.
Which authority issues the Pink Book?
The pink book is issued by the Ministry of Environment. Again, the developers need to help you receive the Pink Book.
Whereas receiving the SPA is a normal part of the buying process, for foreigners, receiving the Pink Book faces more issue.
Why do foreigners have issues to receive the Pink Book?
It’s widely known that foreigners have had issues receiving their Pink Books in Vietnam.
The underlying issue here is related to the national security. Foreigners aren’t allowed to own property in locations that play a risk to national security, according to the director of the HCMC Department of Construction.
The Ministries of Public Security and Defense should have issued a list of the areas that are considered sensitive to national security, but such lists haven’t been made yet.
Ho Chi Minh City, for example, is still waiting for further instructions and has contacted the PM.
The next step would be for the authority to create such lists and announce where foreigners are allowed to own property.
National security areas can be along the river bank or closed to military departments
Are there any foreigners got the Pink Book yet?
The answer is: ‘Yes, there are, few, but there are.’
For example: foreign owners of some projects handed-over a long time ago already grasped the hands on the Pink Books like: Saigon Pearl in Binh Thanh District, City Garden in Binh Thanh District and Docklands in District 7, HCMC…
Why You Shouldn’t Take The Pink Book…?
So it seems like those projects that foreigners can get the Pink Books don’t belong to the locations that play a risk to national security.
However, once foreigners with the Pink Books want to transfer the real estate to other foreigners, the process faces the new issue.
The issue here is related to the Ministry of Environment which is in charge of updating the new foreign buyers names on the Pink Books. As lacking of further instructions from government for this particular task, this process now cannot be performed.
The next step would be for the authority to create such instructions where foreigners are allowed to transfer the property with the Pink Book to the new foreign buyers.
Thus, foreigners with Pink Books only have the option to transfer the property to locals, with the local price.
Remember, the SPA is the former form of Pink Book, which is also as strong as an evidence of the ownership of the property
What should you do here?
Well, while waiting for the authority to create the instructions where foreigners are allowed to transfer the Pink Books to the new foreigners, once the developers call you for the Pink Book application, simple postpone or deny it.
Getting the SPA still secures the proof of ownership and can maintain the transfer to the next foreign owners at foreigners’ price easily.
Realtique Co., LTD