For nearly a decade, the legal status of Condotels (Condo-Hotels) and Officetels (Office-Hotels) has been one of the most controversial topics in the Vietnamese real estate market. Investors were often left in limbo, holding assets without official titles.
However, with the enforcement of Decree 10/2023/ND-CP and the comprehensive Land Law 2024 (effective from Jan 1, 2025), the government has made significant strides to “unfreeze” this segment.
Below is an analysis of the current legal framework: What has been clarified, and where do the “grey areas” remain?
1. The Land Use Right Certificates is Officially Recognized
Previously, local authorities hesitated to issue Land Use Right Certificates (LURC – colloquially known as “Red Books” or “Pink Books”) for Condotels because they are built on commercial service land but sold as individual units like residential housing.
Current Legal Status (2025): The legal corridor is now CLEAR regarding the eligibility for certification.
- Legal Basis: Decree 10/2023/ND-CP (amending Decree 43/2014) and the Land Law 2024 explicitly state that construction works used for tourism and accommodation purposes on commercial/service land can be issued Certificates if they satisfy legal conditions.
- Ownership Scope: The Certificate is issued for “construction works not for housing purposes” (Công trình xây dựng không phải là nhà ở).
- Beneficiary: The Certificate is issued to the buyer (the secondary investor), not just the developer.
Conclusion: Legally, the State has officially acknowledged the ownership rights of Condotel/Officetel buyers.
2. Defining the Nature of Ownership
This is the most critical point that differentiates Resort Real Estate from Residential Housing.
- Land Purpose: Condotels and Officetels are built on “Commercial and Service Land” (Đất thương mại, dịch vụ), NOT “Residential Land” (Đất ở).
- Ownership Term:
- Residential Land: Long-term/Permanent (Lâu dài).
- Resort Real Estate: Limited term, typically 50 years (or up to 70 years in special economic zones).
- Note: Upon expiration, the term can be considered for extension if the investor continues to pay land rental fees and complies with planning regulations.
- Residency Rights: Owners CANNOT register permanent residency (Thường trú – Hộ khẩu) at these addresses. They can only register for temporary business stays or short-term accommodation.
3. Where is the “Grey Area”?
While the central government has opened the door, the actual issuance process at the provincial level still faces “bottlenecks.”
A. The “Mixed-Use” Complexity
Many projects are mixed-use complexes (e.g., lower floors are commercial, middle floors are Officetels, top floors are residential).
- The Issue: Separating the shared land use rights and common areas (corridors, elevators, lobbies) between the “Residential” component and the “Commercial” component is technically difficult for Land Registration Offices.
- Result: Delays in issuing titles due to disputes over shared infrastructure maintenance fees and land allocation boundaries.
B. Conversion to “Residential” (The Impossible Dream)
Many investors purchased Condotels with the verbal promise from developers that “in the future, this can be converted to residential land with a permanent title.”
- Legal Reality: The Law on Housing 2023 and Land Law 2024 make it extremely difficult, if not impossible, to convert commercial land projects into residential units unless there is a major adjustment in the national/provincial master plan. Investors hoping for a “legal switch” are stuck in a grey area of expectation vs. reality.
C. Fire Safety & Operational Compliance
Decree 10/2023 stipulates that titles are only issued if the project has completed construction acceptance and complies with Fire Prevention and Fighting (PCCC) regulations.
- Reality: Thousands of Condotel projects built during the “boom” period (2016-2019) fail to meet the stricter Fire Safety Standards (QCVN 06:2022/BXD). Without PCCC acceptance, the Land Use Right Certificates remain out of reach, regardless of the new land laws.
4. Strategic Advice for Investors & Developers
To navigate this landscape, parties must adhere to the following principles:
- For Developers: Must fulfill financial obligations (land use fees) for the “Commercial/Service” land purpose fully before selling. Handing over incomplete legal files prevents buyers from obtaining individual titles.
- For Investors (Buyers):
- Verify the Land Purpose: Ensure the contract clearly states the land is “Commercial/Service” with a finite term (e.g., expiring in 2054), not “Residential.”
- Accept the Liquidity Risk: Banks are still cautious about accepting Condotel/Officetel LURCs as collateral compared to traditional housing due to the limited term and liquidity constraints.
- Check PCCC Status: Ask for the Certificate of Fire Safety Acceptance before signing the Sales and Purchase Agreement (SPA).
EXECUTIVE SUMMARY
The “Legal Corridor” is effectively 90% clear: Condotels and Officetels are officially recognized assets with limited-term ownership (50-70 years) on commercial land.
However, the “Implementation Path” remains a “Grey Area” in many provinces due to complications in separating shared ownership in mixed-use buildings and retroactive compliance with new Fire Safety standards.
📞 CONTACT LEGAL CONSULTANT:
TLA Law is a leading law firm with a team of highly experienced lawyers specializing in criminal, civil, corporate, marriage and family law, and more. We are committed to providing comprehensive legal support and answering all your legal questions. If you have any further questions, please do not hesitate to contact us.
1. Lawyer Vu Thi Phuong Thanh, Ha Noi Bar Association
Email: vtpthanh@tlalaw.vn
2. Lawyer Tran My Le, Ha Noi Bar Association
Email: tmle@tlalaw.vn
Nguyen Hien Mai