HOW WILL APARTMENT OWNERSHIP RIGHTS BE ADDRESSED WHEN CONDOMINIUMS ARE RENOVATED OR REBUILT?

The term “time-limited condominiums” removed

Compared with the version submitted to the National Assembly at its first extraordinary session in August, the latest draft removes the term “time-limited condominiums” from the definitions section. Instead, it retains the terms “condominium building” and “old condominium building.”

The change is intended to distinguish between the service life of a building and apartment ownership rights, avoiding the interpretation that an owner’s property rights would automatically terminate once the building reaches a certain age.

Under the draft, the service life of a condominium building is determined and specified in the construction design documents in accordance with construction regulations. The period is calculated from the date the building is put into operation and use.

Once a condominium reaches the service life specified in its design documents, its subsequent treatment will be governed by the Housing Law and relevant construction regulations.

The draft also identifies four groups of cases in which a condominium must be demolished, including buildings damaged by fire, explosion, natural disasters, or hostile acts to the extent that they can no longer safely remain in use.

What rights do apartment owners have when a condominium is rebuilt?

One of the draft’s notable provisions clarifies the rights of apartment owners, except for projects constructed before or in 1994, when a condominium undergoes renovation or reconstruction.

Under the proposed mechanism, owners may continue to exercise their rights over the land associated with the condominium and participate in the renovation or reconstruction by contributing funds toward the construction of the new building.

Each owner’s financial contribution would be determined based on the usable floor area of the apartment multiplied by the new construction investment cost per square meter of residential floor area at the time of demolition.

This mechanism is intended to establish a clearer basis for determining each owner’s financial responsibility in the reconstruction of a new building on the existing site.

What happens if an owner does not contribute to the reconstruction costs?

The draft also sets out a mechanism for cases where an apartment owner does not contribute financially to the renovation or reconstruction.

In such circumstances, the owner would receive compensation for the value of the land-use rights associated with the condominium, based on the owner’s share of land-use rights as determined under land regulations applicable at the time of demolition.

After receiving compensation, the owner would be required to hand the land back to the State, which could then allocate the land to an investor to implement the condominium renovation or reconstruction project.

If the approved planning does not permit the condominium to be rebuilt at the existing location, the owners’ interests would likewise be addressed through compensation for the value of their land-use rights. The compensation would be calculated based on the relevant share of common-use area and applicable land regulations at the time compensation is provided.

The proposed framework therefore seeks to establish mechanisms for addressing owners’ rights in both scenarios: participating in the reconstruction process or receiving compensation if they do not participate.

Distinguishing building service life from ownership rights

According to VARS IRE, managing the lifecycle of buildings and promoting urban redevelopment are necessary and consistent with current development trends. However, it is important to distinguish between the technical lifespan of a building and residents’ lawful property rights.

A building may have a defined technical service life, but this does not necessarily mean that an individual’s property rights automatically terminate when that period expires.

The key issue is to establish a mechanism that can simultaneously ensure building safety and protect the legitimate rights and interests of apartment owners.

Dr. Nguyen Van Dinh, Chairman of VARS, said a more appropriate approach would be to treat the design service life as a management and mandatory inspection milestone, rather than as the point at which apartment ownership rights expire.

Under this approach, once a building reaches its design service life, its structural condition and safety should be reassessed. If the inspection confirms that the building continues to meet technical safety requirements, it could remain in use based on the professional assessment and an appropriate maintenance plan.

Conversely, if demolition becomes necessary, apartment owners’ rights should be converted into specific rights and benefits throughout the renovation or reconstruction process.

Avoiding legal gaps and conflicts

Regarding the ongoing amendments to legislation on land, housing, and real estate business, Prime Minister Le Minh Hung previously emphasized the need to improve the legal framework to remove bottlenecks and unlock resources for development.

Relevant ministries and agencies have been asked to conduct comprehensive policy impact assessments and carefully review transitional provisions. During the public consultation process, the objectives and substance of proposed policies should also be clearly explained to minimize differing interpretations.

This is particularly important to prevent legal gaps or conflicts from emerging during implementation and to safeguard the legitimate rights and interests of both residents and businesses.

By removing the term “time-limited condominiums” and introducing clearer mechanisms for addressing owners’ rights when buildings require renovation or reconstruction, the latest draft of the amended Housing Law seeks to establish a clearer distinction between a building’s service life and property ownership rights.

The draft is expected to be submitted to the National Assembly for consideration and approval at its year-end 2026 session.