Decree No.10/2023: Facilitating the revocation of stalled projects

Land recovery without property compensation after a specified period

Article 15b of Decree No. 43/2014/ND-CP, which regulates land recovery in cases where investment projects are terminated in accordance with the law, supplements certain provisions of the guiding decrees for the Land Law recently issued by the government.

As a result, in circumstances where the State assigns land for use or leases property and gets rent for the whole lease duration, the project owner is permitted by law to continue utilizing the land for 24 months after the investment project is terminated.

According to the law, the project owner is permitted to transfer land use rights or sell legally linked assets to another investor throughout the 24-month term.

If, despite a 24-month extension, the project owner is unable to transfer the land use rights or legally attached assets to another investor, the state may recover the land without compensating for the land or attached assets, except in cases where such recovery is impossible, as specified in Article 15.1 of this Decree.

In circumstances when the state leases property and collects rent for one year or more during a 24-month period, the project owner is required by law to transfer land use rights or sell legally linked assets to another investor.

Accelerate the progress of reclaiming suspended projects

In reality, the issue of abandoned projects that are difficult to reclaim the land has become a concern in many big cities, particularly in Ho Chi Minh City and Hanoi.

According to data, there are around 700 halted projects in Hanoi, covering a total land area of over 5,000 hectares. There are also over 300 halted projects in Ho Chi Minh City, provoking public dissatisfaction.

From a legal standpoint, Lawyer Truong Thanh Duc - Director of Anvi Law Firm - argues that the problem of projects that have been stopped for decades and cannot be regained arises from flaws in the legal system that have not been addressed until now.

According to the lawyer, postponed projects that are granted an extra 24-month extension but are still not built would have their property repossessed under the rules of the 2013 property Law. The Investment Law, on the other hand, states that if a project does not engage in any investment activity within 12 months, its investment license would be cancelled.

Mr. Duc claims that each law has a distinct time schedule, making it impossible to manage delayed projects. Meanwhile, there are rules regarding extension and the number of times it may be done. As a result, projects might be "suspended" for up to 5-6 years if accumulated.

In addition, reclaiming land is not easy if the projects already have investors with sunk costs. Because when investors spend a penny, it is their legal property. Meanwhile, the entire project may not be implementable.

Prof. Dang Hung Vo - Former Deputy Minister of Natural Resources and Environment, said that the 2013 Land Law stipulates that if a developer is not granted an extension after 24 months, the land and invested property will be recovered. However, the Investment Law only allows for 12 months, which is very different from the Land Law.

"The above regulation of Decree 10 has helped to harmonize the two regulations so that management agencies can easily apply and solve land reclamation" - Prof. Dang Hung Vo said.

In the capacity of a company, Mr. Pham Duc Toan - CEO of EZ Property, said that Decree 10 will contribute to speeding up the process of reclaiming land in suspended projects that have terminated investment activities. Especially in the context of increasingly scarce land resources, reclaiming land quickly will reduce the problem of "suspended projects", which wastes land resources.