Ownership battles rage between apartment buyers and developers

Like most apartments in Vietnam, CT3 has a board of directors elected by its 540 apartment owners and more than 2,000 residents.

Upon the building’s opening nine years ago, the board hired Nam Cuong Service and Management Company Limited, a subsidiary of Nam Cuong Group, to manage the apartment complex.

But late last year, residents discovered Nam Cuong had committed fraud in renting out the building’s basement for parking.

Nam Cuong had claimed only 166 cars were paying monthly parking fees, but residents found out there were in fact 300.

The board and residents decided to terminate the contract with Nam Cuong.

Though the company agreed to suspend the management contract, it refused to vacate basement B2 and the management office on the first floor of a block.

A company spokesperson said that basement B2 and the office on the first floor were the property of the investor, according to a document signed between the investor and the former head of the CT3 management board in 2015.

But the board said other documents existed that proved the building’s residents were the legal owners of basement B2. Residents said their apartment contracts stated they were the owners of the basement.

“We will fight to protect our ownership rights of the two basements, and we will send a petition to authorities tracing the wrongdoings of the developer,” said Nguyen Thi Thanh Nga, head of the board of directors.

Three kilometers away, residents of the Dreamland Bonanza apartment complex at 23 Duy Tan Street are in a similar situation.

Owners of Dreamland Bonanza’s 378 apartments are locked in dispute with the building’s developer, Vinaland Real Estate Investment Joint Stock Company, over ownership of parts of the complex.

Dreamland Bonanza residents in Hanoi gather in the lobby of the apartment building to discuss a dispute about management of the complex. Photo courtesy of the board of directors

Vinaland claims it owns the management rooms and security camera operation stations. It appointed its subsidiary MSC Vietnam to manage the whole complex. But residents rejected the decision and hired USEM Vietnam Company to manage the apartment buildings instead.

In addition to the dispute of these administrative and security rooms, the two sides are also butting heads in a conflict over the complex’s basement.

According to the current contract, the basement parking area for motorbikes and bicycles is the joint property of the complex’s apartment owners, while the car parking area is owned by the property investor.

However, Vinaland has claimed that all three areas of the entire basement are under its ownership.

The dispute, which has yet to be resolved, has turned into a sectarian conflict in which the complex now has two opposing management boards, each one decrying the other as illegitimate.

The Dreamland Bonanza management board has sent a request to the Nam Tu Liem People’s Committee asking the district authority to order the investor to hand over the camera room and management rooms, as well as “technical infrastructure and equipment,” to the people.

Common conflicts

Disputes over apartment ownership are common in Vietnam. According to the latest data from the Real Estate Association, 129 out of 845 apartments are in dispute in Hanoi, and 105 out of 935 buildings are in dispute or involved in lawsuits in Ho Chi Minh City.

Nguyen Manh Khoi, deputy director of the Ministry of Construction’ Department of Housing and Real Estate Market Management, said the most common apartment disputes are related to the issue of joint and private ownership, and delays in handing over maintenance fees for shared ownership between investors and residents.

“In some apartments, the investor and the management board representing the residents can’t agree on the division of the common and private areas, and the areas that the investor has kept for sale, or areas that have not been sold or rented,” Khoi said. “This has led to a failure to finalize data, and has delayed the handover of maintenance fees 1-3 years.”

In 2021 and 2022, the Ministry of Construction Inspectorate inspected 37 investors and 36 boards of directors at 43 apartment buildings in 16 localities, fining 20 investors a total of more than VND14 billion ($596,000) for administrative violations.

The inspectorate asked the investors to hand over all documents to management boards, and forced five investors to return to residents more than 2,000 m2 of area that rightfully belonged to apartment owners but had been encroached upon and occupied by the companies.