VIETNAM Law and Practice Contributed by: Tran Thai Binh and Duong Thi Minh Han, LNT & Partners
investment if real estate is acquired within the context of an M&A deal. If the real estate is a residential house or housing project, the investors are further required to comply with the laws on housing. These may include laws enacted by the National Assembly, decrees or decisions issued by the govern - ment or Prime Minister, or circulars issued by minis - tries from time to time that provide guidance in imple - menting or clarifying certain provisions of the above laws. Since these are hard laws, they are binding and The Law on Environmental Protection and the Law on Investment require that an investment or devel - opment project should involve environmental impact assessments or declarations with protection meas - ures before implementation. Vietnamese law (Article 15 of the Law on Environmental Protection 2020; and Articles 172 and 602 of the Civil Code 2015) expressly holds liable subjects causing environmental pollution that generates damage, and requires them to cease the acts of violation, apply remedial measures and make compensation, even when they are not at fault. In addition, if there is serious contamination to the land with life-threatening effects, the land may be sub - ject to expropriation by the competent authority. Although the party causing the contamination is held liable under the law, environmental issues are usu- ally discovered after an acquisition, so the party most affected is the buyer – ie, the current owner/land user. Therefore, the buyer should conduct due diligence on environmental issues in acquisition transactions to assess the risks and liabilities in this regard, and should incorporate proper clauses in the transaction documents to mitigate or exclude the risk of such liability. 2.8 Permitted Uses of Real Estate Under Zoning or Planning Law Provincial authorities apply master plans on land use, development and urban zoning every ten years and review these on a five-year basis. For example, a mas - ter plan provides land-use purposes that define where residential housing projects or industrial projects can also govern real estate transactions. 2.7 Soil Pollution or Environmental Contamination
be developed, and how high and how much the con - struction coverage is, etc. By law, this information is publicly accessible. However, in reality, it is usually not fully available and accessible because it is not centralised. A buyer should use consultancy services to access such information. Depending on the investment, the encouraging and supporting policies of localities, the scale and/or importance of a project, the authorities may consider proposals from developers to change master plans to suit or facilitate such projects on a case-by-case basis. In general, the developers must carry out pro - jects in accordance with set master plans, except for in locations where the local authority does not yet have these, in which case the developers may also provide proposals. 2.9 Condemnation, Expropriation or Compulsory Purchase The Land Law 2024, Law on Residential Housing and Law on the Compulsory Purchase of Assets provide for foreclosure, expropriation, and compulsory pur - chase of assets, including real estate. In general, land and real estate could be expropriated in the following circumstances: • for national security and defence purposes; • for social and economic development serving national and public benefit; • due to violation of the laws on land by land users; • lawful termination of land use (including termination of an investment project using land); • voluntary return; • life-threatening events; and • land requisition by the state for national defence or security, or in a state of war or emergency, or to prevent and combat natural disasters. The process of expropriation may be conducted in dif - ferent ways, depending on the cause of expropriation. In theory, the government will notify the purchase, expropriation or recovery in writing to the property owners or land users with reference to the causes of expropriation and its legal basis, followed by a deci - sion on such expropriation.
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