In recent years, hotel apartments, also known as “condotel,” have become an attractive real estate investment trend in Vietnam. Combining the features of an apartment and a hotel, condotels promise high returns from rental income. However, many investors have encountered complex legal disputes surrounding this type of property. We will analyze common legal issues and ways to resolve disputes related to condotels below.
1. Overview of condotel
• A hotel apartment, or “condotel” is a type of real estate that is the combination of a condominium and a hotel. Condotels are usually built in tourist areas, resorts, or major cities with the primary purpose of short-term rental like a hotel, but they can also be owned and used like a condominium.
• Condotel was and is a popular type of real estate in the world. In Vietnam, this type of real estate is still relatively new but has quickly attracted the interest of investors due to its appealing profit potential and unique combination of apartment and high-end hotel services.
Due to their novelty and great appeal, many condotel projects are being developed. However, this boom has also led to an increase in related disputes.
2. Disputes related to “condotel” hotel apartments
According to the current Law on Real Estate Business 2014 and related legal documents, there are no specific regulations on the purchase and transfer of condotels, especially the conditions and guarantees in the purchase and transfer of contracts for future-formed condotels. The lack of control and binding of the parties is one of the causes of disputes in the purchase, transfer, and use of condotels. Some common disputes include:
• Non-compliance with promised profits: Investors often promise high returns, from 8-15% per year, to attract investors. However, when the market faces difficulties or due to poor management capabilities, investors cannot fulfill their promises, causing financial losses to investors. This leads to disputes demanding compensation and contract amendments.
• Delays in apartment handover: Many condotel projects are delayed in construction and handover, preventing customers from using the apartments on time. This could stem from legal policies or financial reasons. When delays occur, customers demand refunds, but investors do not comply, leading to legal disputes.
• Ownership rights: Vietnamese law does not yet clearly regulate the issuance of ownership certificates for condotels. This leads to many disputes over ownership rights, as owners cannot establish long-term ownership of their apartments. Investors need to understand the legal regulations and seek legal advice to avoid this risk. The inability to establish ownership and use rights over the condotel also causes disputes over the transfer of ownership and use rights with the investor.
• Management and operation: The condotel management unit is responsible for operating and providing services to customers. However, if the service quality does not meet the requirements or there are conflicts over management and maintenance fees, investors may demand a change of management unit or sue the investor. This dispute usually involves the management unit not fulfilling its commitments or lack of transparency in costs.
• Maintenance and repair cost disputes: Maintenance and repair cost of condotels is a frequent reason for disputes. Investors and owners may conflict over cost sharing, especially when there are incidents or major repairs needed. This dispute often relates to unclear contract terms or discrepancies in cost assessment.
• Transfer and management: The transfer and management of condotels face many difficulties due to the lack of legal basis. This leads to conflicts between investors and apartment owners, especially when there is a need to transfer or change the management unit.
3. Notes to minimize disputes
• Thorough contract review: Before signing the contract, carefully read and understand all terms in the condotel purchase or investment contract. Ensure that commitments regarding profits, handover time, and terms are accurately stated and protect the parties’ interests.
• Legal research: Study the legal regulations related to condotels, especially land use rights, ownership rights, and management and operation terms.
• Choose a reputable management unit: Ensure that the condotel management unit has credibility and experience in this field. Professional management helps minimize conflicts and disputes over service quality and management costs.
• Monitor progress and fulfill commitments: Always monitor the construction and handover progress of the condotel project to react timely to any delays. Ensure that commitments are fulfilled according to the contract.
• Choose appropriate dispute resolution methods: To resolve disputes regarding condotel hotel apartments, consider negotiation, mediation, arbitration, or court resolution, depending on the nature and complexity of the dispute. Each method has its advantages and disadvantages. Therefore, choosing the appropriate method is crucial.
To apply these notes effectively, readers can seek support from legal experts and experienced lawyers. These experts not only provide in-depth knowledge of the law related to condotel hotel apartments but also offer clear guidance on legal regulations and effective dispute resolution methods. Legal support helps minimize the risk of disputes and protect your rights during the investment and management of condotel apartments.
Above is the article “Disputes over condotel apartments” sent to you by TNTP. If you have any issues to discuss, please contact TNTP for support.
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