Introduction

Real estate projects which just provide land subdivision for transfer was strictly restricted because of delayed completion of construction by the landowners, resulting in urban planning messes. However,  Decree No. 35/2023/ND-CP, issued by the Government and took effect on 20 June 2023 (“Decree 35”), now provides various amendment to regulations in the field of construction, planning, housing and urban management, in which local governmental authorities are entitled to approve land subdivision projects. This is to explore how far the power of local governmental authorities is in approving land subdivision projects under Decree 35.

Allowed to specify the transferable land lots

Previously, provincial people’s committees was allowed to specify the land areas in land-subdivision projects permissible for transfer with a prior written opinion of the Ministry of Construction, as required under Decree No. 11/2013/ND-CP.

Under Article 4.4 of Decree 35,  provincial people's committees has the authority to decide this without obtaining the written opinion of the Ministry of Construction. Nevertheless, such land subdivision projects must meet the following conditions:

a) The project is consistent with all levels of urban planning; the infrastructure construction is completed according to the approved investment phrasing;

b) The construction of housing shall follow the approved project's parameters and schedule;

c) The project is not subjected to areas with strict requirements concerning landscape architecture, adjoining regional-or higher-level roads and main landscape roads in cities, downtown areas, and proximities of facilities that serve as prominent architectural points of cities.

The amendment is made in the trend of decentralizing administrative management authority to provincial people's committees to decide the land areas which are permissible for transfer in land-subdivision projects to land transferees to build houses by their own in compliance with  the approved detailed planning.

This update (which no longer require Ministry of Construction’s approval in land subdivision projects) is made out in the hope of giving more chances to land users in making their homes providing that there would be no adverse effect to urban aesthetics and planning. Certainly, local authorities have to supervise and manage the compliance of such land owners.

Stricter management on small-scaled land subdivision projects

Previously, small-scaled construction investment projects (i.e. with the land area of less than 5 hectares, or less than 2 hectares for investment projects on apartment development) may be implemented without detailed planning required, according to Decree No. 37/2010/ND-CP.

Pursuant to Article 1 of Decree 35, small-scaled land lots to be subdivided must have a detailed planning elaborated through a shortened process (i.e. general ground planning process). Specifically, small-scaled land lots must meet several conditions, such as: land subdivision project implemented by one developer or planned by a competent authority; must be located in an area with the approved zoning planning or the approved general planning in case where the zoning planning is not required. Small-scaled land lot is defined to include:

a) Less than 2 hectares:  for investment projects on construction of apartment buildings or apartment complexes); or

b) Less than 10 hectares: for investment projects on construction of factories, enterprises, industrial production establishments or technical infrastructure works determined according to urban general planning or provincial planning or technical and specialized planning that has been already approved); or

c) Less than 5 hectares for other cases.

The amendment of such regulation also affects the process of renovation and reconstruction of small-scale apartment buildings. According to Article 7.1 of Decree 35, in case land area where apartment renovation and/or reconstruction is conducted is smaller than 02 hectares, the competent authority shall formulate, appraise and approve the detailed planning according to the shortened process.

Conclusion

Decree 35 has amended regulations in the field of construction, planning, housing and urban management in order to strengthen the decentralization in competence of authority and to simplify the relevant administrative procedures. Most notably, the decentralization of local authority on locating land lots permissible for transfer in the land-subdivision project is intended to expedite administrative procedures and develop the land market. Furthermore, investors of small-scaled construction projects from now are obliged to obtain detailed planning through the shortened process for their project.

In addition, Decree 35 also abolishes the entire Decree No. 42/2009/ND-CP on urban classification; and a part of Decree No. 02/2022/ND-CP on real estate business activities.

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*Disclaimer: This Briefing is for information purposes only. Its contents do not constitute legal advice and should not be regarded as detailed advice in individual cases. For legal advice, please contact our Partners.