Over 300 Novaland customers refuse to pay bank loans, want out as projects delayed

After hanging up on the 26th call she received that day, Thanh Van of HCMC told VnExpress: “It was the bank’s debt collection agency. I have gotten so used to being disturbed.”

Her VND5.6 billion (US$220,390) loan was classified as a bad debt in April.

In February 2021 Van booked a townhouse worth VND14 billion in Novaland’s Aqua City urban area project in Dong Nai Province.

Novareal, the developer’s subsidiary, told her that it would help her get a loan worth 40% of the property’s value with a 20-year term and interest payment assistance for the first two years.

She paid VND200 million as a booking fee and 10% of the property’s value as a deposit to sign an agreement with Novaland.

Under the agreement, the developer was to provide her with a sales contract for the property by the end of 2022.

In mid-2022 Novareal abruptly suspended its interest subsidy policy six months prematurely. Nonetheless, Van did not back out, hoping to get the sales contract.

But by year-end Novaland announced it would delay the sales contract to the end of 2024 due to difficulties caused by the Covid pandemic.

The expected house handover time was also pushed back from September 2026 to March 2027.

Not wanting to continue, Van asked to terminate the agreement, citing the delays as reasons, but Novaland refused saying that the timeline in the agreement was only an estimate and “could be changed by many unforeseen factors and events.”

Since then she has not paid the principal or interest on the loan, leading to it being categorized as a bad debt.

Van is one of the 307 individuals who have stopped paying for the loans they took out to buy properties in three Novaland projects: Aqua City, NovaWorld Phan Thiet in central Binh Thuan Province and NovaWorld Ho Tram in southern Ba Ria – Vung Tau Province.

The value of these properties is VND3.78 trillion and banks have given VND1.27 trillion worth of loans to their buyers. Banks have downgraded 255 of the loans, classifying nearly 100 as bad debts.

Many of the buyers said they have been sued by lenders or constantly harassed by debt collection services.

They said they have met with Novaland representatives and banks on multiple occasions to cancel their agreements and get full or partial refunds.

But they were merely told their opinions had been heard.

“The company has never proactively worked with us or apologized to us,” Pham Hung, who bought a townhouse worth over VND11 billion at NovaWorld Ho Tram, said.

Responding to VnExpress’s inquiry, a Novaland spokesperson said the defaulting individuals account for only 4.39% of customers who borrowed money to buy homes.

The company ended the interest subsidy policy early due to financial and legal issues, but had proposed other solutions, the spokesperson claimed.

It included an offer to reimburse in full the interest they had to pay for the remaining six months of the policy along with an additional 12% per year interest on that amount.

Halting interest subsidy programs early and delaying handover are not uncommon, especially in the current sluggish market.

The company said the three projects consist of several smaller components, some of which have been completed.

Since last year around 500 units at Aqua City and over 1,000 at NovaWorld Phan Thiet have been handed over to customers, it said.

A few hundred units have also been completed at NovaWorld Ho Tram. It blamed the delays on legal hurdles that have not been resolved yet.

But work on the projects is being speeded up and the legal issues are expected to be resolved in the second half of this year, it added.