Tightening Real Estate Brokerage Activities
The real estate market plays a significant role in the economic development of any country. In Vietnam, however, the brokerage activities in the sector have been facing challenges due to the lack of professionalism and transparency. This has led to a decline in investor trust and the credibility of genuine brokers. To address these issues, the Vietnamese government is taking steps to tighten the regulations governing real estate brokerage activities.
The Shortcomings of the Current Scenario
According to statistics from the Vietnam Association of Real Estate Brokers (VNREA), there are currently around 300,000 individual brokers working in various real estate service businesses in the country. Shockingly, only about 40,000 of them possess a valid brokerage license. This means that the majority of brokers operate without professional qualifications and are not regulated by any government authority.
The unprofessional conduct of brokers, coupled with exorbitant service fees (ranging from 2-3% for sellers and 1-2% for buyers), has resulted in a negative impact on the market. Additionally, deceptive advertising practices, such as posting fake property listings or misrepresenting the properties for sale, have further eroded investor trust. All these factors highlight the urgent need for stricter regulations in the real estate brokerage industry.
The Legalization of Brokerage Activities
To address the issue at hand, the revised Real Estate Business Law 2023 was recently passed and will take effect from January 1, 2025. The new law introduces several measures to tighten the regulations on real estate brokerage activities.
According to Article 61 of the law, individuals involved in brokerage activities must possess a valid brokerage license and operate within a licensed real estate service or brokerage business. This means that individuals cannot engage in freelance brokerage activities as they previously could.
Another significant provision in Article 48 requires project investors and real estate service businesses to receive payments from customers through official bank accounts. This ensures transparency, prevents tax evasion, and allows for effective monitoring of income generated through brokerage activities.
The Impact and Way Forward
Industry experts believe that the new regulations will help eliminate unprofessional brokers and create a healthier, more transparent business environment. Nguyen The Diep, Vice-Chairman of the Hanoi Real Estate Club, expects that these stricter regulations will pave the way for a more credible real estate market.
To adapt to the new regulations, brokers must familiarize themselves with the updated legal framework and enhance their negotiation skills. They should also leverage technology to streamline their work processes and explore new opportunities in different market segments.
The Ministry of Construction is currently seeking public input on a draft decree that provides detailed guidelines for implementing the Real Estate Business Law 2023. Under this decree, bodies such as the Department of Housing and Real Estate Market Management, VNREA, and the Vietnam Association of Real Estate Brokers will be authorized to conduct qualifying exams and issue brokerage licenses. The ministry plans to publish information about the exams on its official website at least two months before the scheduled exam dates.
The Real Estate Business Law 2023 clearly prohibits individuals from conducting freelance brokerage activities. It emphasizes the necessity for brokers to possess the required skills and qualifications through valid licenses, thereby creating a fair and competitive market where only professional and experienced brokers thrive.