The Real Estate Business Law 2023 imposes stringent conditions on real estate brokerage activities, including the termination of independent real estate brokerage and requiring individuals in this field to work for a company and receive remuneration and commissions from the company.
Requirement to Establish a Real Estate Brokerage Company
Article 61 of The Real Estate Business Law 2023 stipulates that organizations and individuals providing real estate brokerage services must establish a real estate service business and meet the following conditions: Have an operational service regulation; Have facilities and technical equipment that meet operational requirements; Employ at least one individual with a real estate brokerage certification and Submit company information to the provincial real estate business management authority where the company is established for management purposes before beginning operations.
For individuals practicing real estate brokerage, they must meet two criteria: Hold a real estate brokerage certification and Work within a real estate exchange service company or a real estate brokerage service company.
Compared to the provisions in Section 2, Chapter VII of the Real Estate Business Law 2014, the 2023 law introduces numerous additional regulations regarding the operational conditions of real estate businesses and eliminates the provision allowing individuals to practice independent real estate brokerage.
This regulation is expected to tighten control over “land brokers,” ensure order at projects, and maximize the rights and legal interests of individuals seeking to buy or lease real estate in these projects.
Prohibition on Receiving Brokerage Commissions in Cash
Clause 2, Article 48 of The Real Estate Business Law 2023 stipulates that project investors, real estate businesses, and real estate service companies must receive payment under real estate business contracts from clients through bank accounts opened at legally operating banks in Vietnam.
Clause 1, Article 63 of The Real Estate Business Law 2023 specifies that individuals practicing real estate brokerage may receive remuneration and commissions only from real estate service companies or real estate brokerage companies.
Thus, all brokerage fees and commissions under the new law must be received through the company and via bank transfer, not in cash.
The Real Estate Business Law 2023 will be effective from August 1, 2024.
This newsletter aims to provide information on newly issued legal regulations and is not intended as specific advice or application to individual cases.
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