Changes to Land Law favour firms, investors

People’s committees can now set land prices close to market value

Deputy Natural Resources and Environment Minister Dang Hung Vo told Vietnam Investment Review the amended law’s new price system, dispute settlement mechanism and decentralised land allocation powers would ease business concerns.
“The amended land law is much more appealing to investors,” Vo said.
He said the amended law, passed last week by the National Assembly, set deadlines for local authorities to resolve problems for land users and businesses, which was an improvement on the current lengthy procedures.
“The government policy is justified but it can take businesses a long time to negotiate with the local authorities. The deadlines will do away with bureaucracy,” Vo said.
Article 41 of the amended law allows state organisations to oversee site clearance and land management.
The deputy chairman of the National Assembly, Truong Quang Duoc, said this model had been successful in China and had been piloted in a number of Vietnamese cities.
Foreign investors have found site clearance to be a costly, time-consuming process that can cause delays to their construction projects.
The amendments give provincial people’s committees the power to set land prices close to the market value, breaking with the previous dual-pricing system in which prices were set by the government and the market.
Assembly delegates have called the current pricing system unrealistic, as it does not reflect the land’s market value. However, they have pointed out that market prices were sometimes absurdly high due to speculation.
Duoc said land prices would be adjusted when there was a big difference between government and market prices. The question of defining market land prices was a technical issue that the government would answer later.
He said the provincial people’s committees would have to consult with the people’s councils before issuing their final price decisions, because it was an important issue.
The amended law also allows the management boards of economic and high-tech zones to lease land directly to Viet Kieu and foreign investors, even though some deputies asked that this decentralisation be reconsidered.
Duoc said the mechanism aimed to encourage investment by streamlining.
“This is a special mechanism for the management boards of economic and high-tech zones,” he said.
Another point that was hotly debated at the National Assembly was the question of resolving land disputes.
The amendments allow land users to take their land disputes to court, but court officials have warned they will be overloaded because of the frequency of land-use conflicts in Vietnam.
The deputy chairman said there would be two methods for the settlement of land-related disputes, to clarify the jurisdictions of people’s courts and state administrative agencies.
The amended law states the courts are responsible for handling land and land-related asset disputes when the concerned parties have land-use-right certificates.
Disputes that do not have certificates will initially be handled by the district people’s committee chairman, but the parties can then appeal to the provincial people’s committee chairman.
If the parties do not agree with the provincial chairman, the Minister of Natural Resources and the Environment has final say. Appeals against administrative decisions regarding land management can be settled by the court or the provincial people’s committee chairman.
Deputy minister Vo said although the amendments did not allow Vietnamese individuals or organisations to lease land to foreign investors, the government would pilot this mechanism through a separate decree.