4 Important Terms in House Purchase & Sale Agreement

[Having appointment with real estate experts #3] “Innominate Terms are considered the most important ones in a house purchase & sale agreement. It is recommended that homebuyers, especially first-time buyers, should choose reputable developers.”

What mentioned above is the advice of lawyer Pham Thanh Son in “Having appointment with real estate experts #3” on the topic of legal issues in buying real estate in projects.

According to Mr Son, for accommodation-purpose projects, the current legal system is relatively completed. However, the government will not be able to control innominate terms (negotiable terms). Therefore, it is the homebuyer’s responsibility to pay close attention to these terms.

Lawyer Pham Thanh Son said the most important thing to note when buying a home is the Innominate Terms

Mr Son also pointed out 4 innominate terms which are the most important in house sales contracts.

The first is the terms related to payment. According to current regulations, there are 4 basic payment stages: 40%, 30%, 25% and 5%.

The second is the terms of handover and penalties for late payment. Still, there are questions raised in which should it has a late-handover penalty for developer. Most developers do not include this clause in the contract. It is recommended that it should be applied for both buyers and developers, in which the party will be penalized if fail to perform its responsibilities on time according to the contract.

The third terms are related to house equipment. Even though brokers promote houses as “cheap yet high quality”, what buyers usually receive in only “cheap”.

Finally, the fourth is terms related to conversion, sales & purchase, maintenance, repairmen and price of services. The current service fee for condominium, or management fee, ranges from VND10,000/sqm to about VND40,000/sqm. There are cases in which service fees are not mentioned or not stated clearly in house sale & purchase agreement. For instance, it might say something like “free services” or “supported by developer”. However, the “free” term is only true for the first 2 years. From the 3rd year, the homebuyer might be surprised at the “service-fee debt” of up to VND50,000 VND/sqm.

Apart from the above terms, Mr Pham Thanh Son also advised homebuyers, especially first-time buyers to choose reputable developers. It is essential to find information on the developer online. Buyers should actively check if this investor has been sued, whether or not there are bad debts, and how the project has been implemented. Before buying, the buyer also needs to ask the investor or their sales department to provide legal documents about the project.

The lawyer also mentioned other important legal issues related to purchasing properties in the talk show. Click here to watch the whole talk show!

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Source: Thanh nien Viet