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Strict penalties needed to prevent fraudulent real estate businesses
24/10/2019 15:54 | Source: Saigontimes
Real estate insiders and experts said it is essential to develop strict penalties to combat those operating fraudulent property businesses to protect the legitimate rights of consumers and legitimate enterprises.

Recently, authorities of Ho Chi Minh City (HCMC) has urged the Ministry of Construction (MoC) to propose the Government issue regulations forcing real estate firms to publicize information about their projects and impose heavy penalties on those deliberately violating laws and regulations.

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General Director of Phu Dong Group Ngo Quang Phuc expressed his support to the proposal, saying that real estate is a conditional business sector and enterprises must meet conditions therein.

Strict penalties are aimed at ensuring that the market is transparent. Phuc added in case regulations are not strict enough, law-abiding firms will lose their confidence in State management agencies, while those with fraudulent business activities will benefit.

Manager of another real estate firm said penalties should be imposed cautiously, since a developer may develop multiple projects. If the information about a certain project is not publicized adequately, leading to the company’s suspension, both the company and banks offering loans to it will be placed in jeopardy.

Not only home buyers, but also property developers are now facing a high risk of losses due to overlapping and unreasonable regulations.

Authorized agencies should support enterprises to remove obstacles that prevent them from quickly executing projects. Once regulations are tightened and made reasonable, developers will be willing to publicize information about their projects.

The disclosure of information about real estate projects is necessary, but it is more important to help consumers easily find such information, said President and CEO of BizLight Business School Bui Quang Tin.

Many HCMC-based real estate projects whose capital has been raised illegally are selling properties to the public. To ensure the rights and benefits of home buyers, the city government has proposed suspending for one year the operations of enterprises violating regulations on information disclosure.

Besides, real estate project developers must have credit guarantee contracts from credit institutions.