REAL ESTATE LEGAL REFORM: REMOVING BOTTLENECKS — WHAT WILL BUSINESSES NEED TO CHANGE?

1. THE BIG PICTURE: STREAMLINING PROCEDURES WITHOUT COMPROMISING SAFEGUARDS

The 2023 Law on Real Estate Business and the 2023 Law on Housing have established the current legal framework for the market. Following their implementation from August 1, 2024, practical experience has highlighted areas where further refinement is needed to meet new development requirements, adapt to changes in the organization of local government, and ensure consistency with related legislation. Against this backdrop, the drafting authorities are preparing amendments to the laws, with a focus on reducing compliance costs, simplifying procedures, and strengthening decentralization and delegation of authority.

By early October 2026, the draft Law on Real Estate Business (amended) had been reviewed by the Standing Committee of the National Assembly and examined by the Economic and Financial Committee. Key areas under consideration include resolving obstacles related to component projects and BT projects, conditions for putting off-plan real estate into business, project transfers, real estate identification codes, administrative reform, and digital transformation.

Meanwhile, the draft Law on Housing (amended) is also being developed toward greater delegation of authority to local governments, the reduction of business conditions, and the simplification of administrative procedures.

The current reform process can be viewed through three main pillars:

First, stronger decentralization while maintaining clear lines of authority

The draft Law on Real Estate Business (amended) proposes transferring the authority to approve the transfer of all or part of a real estate project from the Prime Minister to provincial-level People’s Committees. However, this remains a proposal under the draft law and should not be interpreted as meaning that all project transfers would automatically fall entirely under provincial authority.

Second, streamlining administrative procedures and business conditions

The draft Law on Real Estate Business is structured into 10 chapters and 61 articles, compared with the 2023 Law on Real Estate Business. The draft also proposes eliminating 4 out of 12 administrative procedures and 9 out of 31 business conditions, while simplifying a number of the remaining procedures. According to the drafting authority’s assessment, these changes could significantly reduce the time required to process administrative procedures.

For the draft Law on Housing (amended), the proposed legislation comprises 13 chapters and 132 articles, 66 fewer articles than the 2023 Law on Housing. It also proposes delegating 20 out of 21 procedures currently under central-government authority to local authorities.

Third, reducing procedures while strengthening transparency and buyer protection

The reform is not simply about making procedures faster. The draft Law on Real Estate Business also seeks to refine regulations on transactions, market data, and mechanisms to secure the remaining 5% of the contract value.

 2. KEY DATA POINTS

The 2023 Law on Real Estate Business comprises 10 chapters and 83 articles, while the 2023 Law on Housing comprises 13 chapters and 198 articles. The figures of 61 and 132 articles refer to the respective 2026 amendment drafts, rather than the laws currently in force.

3. WHAT IS CHANGING?

3.1. From centralized authority toward greater decentralization to local governments

One of the most notable changes is the proposed strengthening of decentralization and delegation of authority.

For the transfer of all or part of a real estate project, the draft Law on Real Estate Business (amended) proposes transferring decision-making authority from the Prime Minister to provincial-level People’s Committees. This could have a significant impact on project M&A transactions, particularly where developers seek to transfer projects as part of portfolio restructuring or to bring in new sources of capital.

However, decentralization does not mean that every project will be handled entirely at the provincial level. Businesses will therefore still need to determine the applicable authority for each project rather than assuming that M&A procedures will automatically become faster in every case.

This also highlights the fact that the effectiveness of legal reform will depend not only on the legislation itself but also on the capacity of local authorities to implement it in practice.

3.2. The final 5%: from buyer protection to a cash-flow challenge

The 2023 Law on Real Estate Business provides that where a buyer or lease-purchaser has not yet received a Certificate, the seller or lessor may not collect more than 95% of the contract value. The remaining amount is payable once the competent authority issues the Certificate.

Under the 2026 amendment draft, this mechanism is further developed through a proposal to introduce security arrangements for the remaining 5%, including options such as escrow accounts or agreements between the parties.

For developers, this is not merely a matter of buyer protection. It is also directly linked to working-capital management and the ability to complete post-handover legal procedures.

If the final payment is secured or its use is restricted until the Certificate-related obligations have been completed, developers will need to plan their funding requirements more carefully during the final stage of a project. This could make financial capacity, the timely completion of legal procedures, and project management quality increasingly important factors in assessing a developer’s financial health.

3.3. Rental housing: new opportunities, but the legal framework is still evolving

Another notable feature of the draft Law on Housing (amended) is a more diversified approach to housing types.

According to the published draft, housing categories are being structured to accommodate additional types and policy frameworks, including rental housing, accommodation-oriented housing, and worker accommodation.

This could create greater room for long-term, income-generating real estate models such as Built-to-Rent (BTR).

However, these remain proposals under the draft legislation. It would therefore be premature to regard BTR as a fully established and comprehensively regulated market segment. For developers, the proposals provide a signal to explore new portfolio strategies, but investment decisions will still need to take into account the final legal framework, land policies, taxation, credit conditions, and actual operating potential.

4. FROM THE PERSPECTIVE OF PROPERTY DEVELOPERS

4.1. Cash flow: shorter procedural timelines, but potentially higher funding requirements at the final stage

On the one hand, streamlined procedures could help developers reduce waiting times and financing costs during the project preparation phase.

On the other hand, mechanisms securing the remaining 5% of the contract value could require developers to be more proactive in managing funding during the final stages of project completion and Certificate issuance.

The financial equation is therefore not simply “fewer procedures = lower funding requirements.” Developers may benefit from a shorter legal cycle while simultaneously needing to maintain sufficient resources to fulfill their final-stage obligations.

This makes cash-flow management based on specific legal and project milestones increasingly important.

4.2. Project M&A: an opportunity to accelerate transactions, but not a “fast lane”

If the proposed transfer of authority is approved and implemented consistently, the processing time for some project M&A transactions could be reduced.

For businesses holding projects that have yet to be developed, this could create opportunities to:

• Restructure their project portfolios;

• Seek capital partners;

• Transfer projects that no longer fit their strategic direction;

• Reduce interest expenses and opportunity costs.

At the same time, buyers will still need to conduct thorough due diligence on land status, planning, financial obligations, construction matters, and conditions for putting the products into business. Decentralization of procedures does not mean that the core legal requirements applicable to a project will be relaxed.

4.3. BT and land funds: funding remains the central issue

The draft Law on Real Estate Business (amended) introduces provisions relating to BT projects, including mechanisms for fulfilling financial obligations and forms of security such as guarantees, escrow accounts, or arrangements under the law governing public-private partnerships.

For businesses, this creates a need to carefully assess upfront cash requirements, land-related financial obligations, and the point at which the associated real estate can legally be put into business.

In other words, efforts to resolve obstacles facing BT projects could create additional opportunities, but they do not mean that developers can exploit land allocated as consideration before completing the necessary legal and financial requirements.

4.4. Portfolio strategy: from selling products to developing income-generating assets

If the legal framework for rental housing becomes more favorable, developers could have more options beyond the traditional model of selling completed units.

In particular, in major urban centers and areas with large populations of professionals and workers, rental housing could provide a relatively stable source of long-term cash flow.

However, BTR requires a different set of capabilities from a build-to-sell model. Developers need to be able to operate assets, manage tenants, maintain occupancy rates, and optimize operating costs. This is therefore not simply a change in product strategy, but potentially a shift in the underlying business model.

5. THREE ISSUES BUSINESSES SHOULD MONITOR

First: Will decentralization actually translate into faster processing?

Transferring additional authority to local governments could reduce certain intermediate steps. However, the practical impact will also depend on detailed regulations, internal procedures, and the implementation capacity of each locality.

Businesses should therefore look beyond the number of procedures eliminated on paper. A more meaningful indicator is the actual time between application submission and the issuance of a decision.

Second: Legal consistency across different laws remains a major variable

A real estate project is not governed solely by the Law on Real Estate Business.

Land, investment, construction, planning, housing, and financial obligations may all affect the same project. During discussions on the draft Law on Real Estate Business (amended), the need to ensure consistency and uniformity across the relevant legal framework has continued to be emphasized.

Therefore, simplifying a procedure under the Law on Real Estate Business may not, by itself, resolve the entire bottleneck if related procedures under other laws remain cumbersome.

Third: Developers’ financial standards will become increasingly important

The mechanism governing the final 5% of the contract value points to a broader trend: a developer’s responsibilities do not end when the property is handed over.

The ability to complete documentation, obtain Certificates, and fulfill post-handover obligations is increasingly linked to a developer’s financial capacity and reputation.

Over the longer term, this could favor developers with healthy balance sheets, strong legal capabilities, and diversified funding sources, while putting greater pressure on businesses that rely heavily on short-term customer cash flows.

6. THE LONG-TERM OUTLOOK: WHAT WILL DEVELOPERS NEED TO CHANGE?

If the proposed amendments are adopted along their current direction, their most significant impact may not lie in any single procedure, but rather in how developers manage the entire project lifecycle.

First, legal execution must become part of financial management

Legal timelines are no longer solely the responsibility of the legal department. Every month of delay can translate into additional financing costs, opportunity costs, and disruptions to sales plans.

Developers therefore need to manage legal matters, capital, construction, and sales as an interconnected chain, rather than as separate functions.

Second, the ability to complete projects will become as important as the ability to sell them

As obligations toward buyers extend through the Certificate issuance stage, sales velocity will no longer be the only indicator of project performance.

The ability to deliver on schedule, complete legal obligations, and obtain Certificates on time will increasingly affect a developer’s reputation, financing capacity, and brand value.

Third, the market may increasingly favor businesses with strong execution capabilities

Legal reform could expand access to projects and shorten certain procedures, but it may also make differences in corporate capabilities more visible.

Businesses with strong financial resources, legal expertise, project management capabilities, and access to capital are more likely to benefit from greater decentralization and procedural simplification.

By contrast, businesses with weak financial positions or an excessive reliance on short-term customer cash flows may need to adjust their strategies, seek strategic partners, or restructure their project portfolios.

CONCLUSION

Vietnam’s real estate legal reform agenda in 2026 is moving along two parallel tracks: removing unnecessary procedures and strengthening decentralization to bring decision-making closer to local authorities, while simultaneously raising standards for transparency, accountability, and transaction safety.

For property developers, this presents an opportunity to shorten project preparation and development timelines, particularly for matters handled at the local level. However, this is not a blanket relaxation of regulations. Financial requirements, conditions for putting real estate into business, obligations toward buyers, and consistency with land, investment, and construction laws will remain critical variables.

The bigger question for businesses is therefore not simply “How many procedures will be eliminated?”, but rather whether they have the capabilities to turn a more streamlined legal framework into faster and more effective project execution.

In the next cycle of the market, competitive advantage may increasingly belong to developers that can combine legal capabilities, financial strength, and execution capacity, rather than relying primarily on access to land or sales capabilities.