Circular No. 03/2018/TT-BXD detailing and guiding the implementation of certain provisions of Government Decree No. 139/2017/NĐ-CP dated November 27, 2017 on administrative penalties for violations in construction activities; exploitation, processing, trading of construction materials; production, trading of construction materials; management of technical infrastructure works; real estate trading, housing development; management and use of houses and office buildings.

CIRCULAR

Regulations detailing certain provisions of Decree No. 139/2017/ND-CP

dated November 27, 2017, of the Government on administrative penalties for violations in investment construction activities; exploitation, processing, trading of construction materials minerals; production and trading of construction materials; management of technical infrastructure works; real estate trading, housing development, management and use of houses and public offices

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Pursuant to the Law on Construction promulgated on June 18, 2014;

Pursuant to the Law on Handling Administrative Offenses dated June 20, 2012;

Pursuant to Decree No. 81/2017/NĐ-CP dated July 17, 2017 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Construction;

Pursuant to Decree No. 81/2013/ND-CP dated July 19, 2013, of the Government detailing certain provisions and measures for implementing the Law on Handling Administrative Violations;

Pursuant to Decree No. 97/2017/ND-CP dated August 18, 2017, of the Government amending and supplementing certain articles of Decree No. 81/2013/ND-CP dated July 19, 2013, of the Government detailing certain provisions and measures for implementing the Law on Handling Administrative Violations;

Pursuant to Article 81 of Decree No. 139/2017/ND-CP dated November 27, 2017, of the Government on administrative penalties for violations in investment construction activities; exploitation, processing, trading of construction materials minerals; production and trading of construction materials; management of technical infrastructure works; real estate trading, housing development, management and use of houses and public offices;

At the proposal of the Inspector General of the Ministry,

The Minister of Construction issues this Circular detailing certain provisions of Decree No. 139/2017/ND-CP dated November 27, 2017, of the Government on administrative penalties for violations in investment construction activities; exploitation, processing, trading of construction materials minerals; production and trading of construction materials; management of technical infrastructure works; real estate trading, housing development, management and use of houses and public offices.

Article 1. Scope of Regulation and Applicability

1. This Circular details Articles 15 and 79 of Decree No. 139/2017/ND-CP dated November 27, 2017, of the Government on administrative penalties for violations in investment construction activities; exploitation, processing, trading of construction materials minerals; production and trading of construction materials; management of technical infrastructure works; real estate trading, housing development, management and use of houses and public offices (hereinafter referred to as Decree No. 139/2017/ND-CP).

2. This Circular applies to agencies, organizations, and individuals participating in investment construction activities; agencies and persons authorized to impose administrative penalties; other related agencies, organizations, and individuals.

Article 2. On the application of the form of administrative penalty of revoking the construction permit as stipulated in Clause 10, Article 15 of Decree No. 139/2017/ND-CP

1. The revocation of the construction permit as stipulated in Clause 10, Article 15 of Decree No. 139/2017/ND-CP shall be applied as follows:

          a) Revoking the construction permit for a period of three to six months for the act specified in Point a, Clause 9, Article 15;

b) Revoking the construction permit for a period of six to nine months for the act specified in Point b, Clause 9, Article 15;

c) Revoking the construction permit for a period of nine to twelve months for the act specified in Point c, Clause 9, Article 15.

2. During the period of revocation of the construction permit, the violator individual or organization may not organize construction work.

3. Within five working days from the date of issuance of the Decision on administrative penalty with the application of the form of revoking the construction permit, the person authorized to issue the decision must notify in writing or send the decision on administrative penalty to the Construction Department Inspectorate and the competent authority issuing the construction permit.

Article 3. On the application of measures for compensation for damages stipulated in point c, Clause 11, Article 15 of Decree No. 139/2017/NĐ-CP

1. Compensation for damages shall be agreed upon between the Investor and the party suffering damage. In cases where the parties cannot reach an agreement, the matter shall be resolved in accordance with civil law regulations.

2. In cases where there is a risk of collapse or imminent collapse of adjacent works, the Investor must suspend construction work on the project and take immediate measures to relocate people and assets of the adjacent works. The Investor is responsible for renting housing and paying rental fees for the party suffering damage. The rented housing must ensure factors such as travel distance, area, and social infrastructure to enable the party suffering damage to stabilize their living conditions. If the party suffering damage finds their own accommodation (equivalent to the affected residence), the Investor is responsible for paying the corresponding amount of rent and asset relocation costs to the party suffering damage.

3. After the administrative violation record is established, if the Investor and the party suffering damage cannot agree on compensation for damages and one party requests the Chairman of the People's Committee of the commune to resolve the issue, it shall be implemented according to the following procedures:

a) Within five days from the date of receipt of the request, the Chairman of the People's Committee of the commune has the responsibility to organize the first negotiation;

b) At the end of seven days from the date of the first negotiation failing or not being organized due to the absence of one of the parties, the Chairman of the People's Committee of the commune shall organize the second negotiation;

c) At the second negotiation session, if one of the parties is absent without a valid reason, the Chairman of the People's Committee of the commune shall decide to hire a consulting organization with legal personality to determine the level of compensation for damages. The cost of hiring shall be borne by the Investor. After determining the level of compensation for damages, the Chairman of the People's Committee of the commune shall have the responsibility to require the Investor to transfer funds into a guarantee account at a bank managed by the People's Committee of the commune. The Investor may only continue construction work after transferring the full amount into the guarantee account at the bank;

d) At the second negotiation session, if both parties cannot agree on the level of compensation for damages, they shall agree to hire a consulting organization with legal personality to determine the level of compensation for damages. In cases where both parties cannot agree on the consulting organization to be hired or the level of compensation for damages determined by the hired consulting organization, the Chairman of the People's Committee of the commune shall hire a consulting organization to determine the level of compensation for damages. The cost of hiring shall be borne by the Investor. Based on the results of determining the level of compensation for damages, the Chairman of the People's Committee of the commune shall have the responsibility to require the Investor to transfer funds into a guarantee account at a bank managed by the People's Committee of the commune. The Investor may only continue construction work after transferring the full amount into the guarantee account at the bank;

e) In cases where one party does not agree with the level of compensation for damages, that party has the right to initiate litigation before the Court.

4. In cases where the Investor is not subject to administrative penalty, it is encouraged to apply the provisions of Clause 3 of this Article to resolve compensation for damages.

5. The violator may only continue construction work when all parties have reached an agreement and completed compensation for damages or have complied with the resolution procedures stipulated in Clause 3 of this Article.

Article 4. On the application of measures to compel the dismantling of construction works, parts of construction works prescribed in Point d Clause 11 Article 15 Decree No. 139/2017/NĐ-CP

1. When the competent authority discovers administrative violations prescribed in Clause 2, Clause 4 or Clause 5 Article 15 Decree No. 139/2017/NĐ-CP, and such violations have ended, in addition to being subject to administrative penalties, violators shall also be subject to the measure of compelling the dismantling of the construction work, part of the construction work in violation.

2. The construction work, part of the construction work in violation must be dismantled according to the demolition plan and solution approved until the remaining part of the construction work ensures safety when put into use.

3. The project owner is responsible for organizing the preparation, review, approval, and implementation of the demolition plan and solution for the construction work, part of the construction work in violation as stipulated in Clause 2 of this Article. The demolition plan and solution must ensure the safety of the construction work after the removal of the violating part, human life and health, adjacent construction works, and environmental sanitation.

4. In case the project owner does not voluntarily comply with the measure of compelling the dismantling of the construction work, part of the construction work in violation, they will be subject to forced execution. The competent authority issuing the decision on forced execution shall hire a consulting organization to prepare the demolition plan and solution, and submit it to the relevant construction management agency at the same level for examination before approving the plan and solution. The project owner is responsible for paying all costs related to the forced dismantling of the construction work, part of the construction work in violation: preparing, examining, approving the demolition plan and solution, and organizing the forced execution.

Article 5. On the application of measures to suspend construction to complete procedures for obtaining a construction permit or adjusting a construction permit prescribed in Clause 12, Clause 13 Article 15 of Decree No. 139/2017/ND-CP

1. When the competent authority discovers administrative violations prescribed in Clause 2, Clause 4 or Clause 5 Article 15 Decree No. 139/2017/NĐ-CP, and such violations are ongoing, in addition to being subject to administrative penalties, violators shall be handled as follows:

a) Violators must suspend construction from the time the administrative violation record is established. The competent authority establishing the administrative violation record shall issue it according to Model 01 issued together with this Circular;

b) Within the specified period, the competent authority establishing the administrative violation record is responsible for issuing an administrative penalty decision; if lacking authority or exceeding authority to impose penalties, within three days from the date of establishing the administrative violation record, the person establishing the record must transfer the administrative violation record and case file (if any) to the competent authority imposing administrative penalties. The competent authority issuing the administrative penalty decision shall issue it according to Model 02 issued together with this Circular;

c) Within a maximum of sixty days from the date of establishing the administrative violation record, violators are responsible for completing the procedures to obtain a construction permit or adjust a construction permit and present the obtained or adjusted construction permit to the competent authority imposing penalties;

d) Upon expiration of the period prescribed in Point c Clause 1 of this Article, if violators fail to present the obtained or adjusted construction permit, the competent authority imposing penalties shall issue a notice to implement the measure of compelling the dismantling of the construction work, part of the construction work in violation according to Model 03 issued together with this Circular. The notice shall be sent to violators and the People's Committee of the commune where the violating construction work is located through registered mail and publicly posted at the violating construction work. If violators refuse to accept the notice or remove the posted notice, the People's Committee of the commune where the violating construction work is located shall be responsible for publicly posting the notice at its office. Within a maximum of fifteen days from the date of sending the notice (based on the postmark), violators are responsible for implementing the measure of compelling the dismantling of the construction work, part of the construction work in violation;

đ) Within a maximum of five days from the date violators present the obtained or adjusted construction permit, the competent authority imposing penalties is responsible for inspecting the current status of the construction work, recording the inspection in a record. The inspection and recording of the current status of the construction work shall be prepared according to Model 04 issued together with this Circular;

e) Violators may only continue construction if the inspection and recording of the current status of the construction work confirms that the current status of the construction work complies with the obtained or adjusted construction permit. If the inspection and recording of the current status of the construction work confirm that the current status of the construction work does not comply with the obtained or adjusted construction permit, within a maximum of fifteen days from the date of the inspection and recording, violators must dismantle the construction work, part of the construction work that does not comply with the obtained or adjusted construction permit.

2. The method of determining the deadline in terms of number of days prescribed in Clause 1 of this Article shall be implemented according to Articles 147 and 148 of the Civil Code.

3. If violators do not comply with the administrative penalty decision, do not implement the compulsory dismantling measures prescribed in Points d and e Clause 1 of this Article, they will be subject to forced execution according to the provisions of the law on handling administrative violations and Clause 4 Article 4 of this Circular.

4. In cases of adjusting the design of construction works without falling under the circumstances requiring adjustment of the construction permit according to Article 98 of the Construction Law, it shall not be considered as constructing in violation of the contents of the issued permit as prescribed in Clause 2, Clause 4 Article 15 Decree No. 139/2017/NĐ-CP.

Article 6. On the application of transitional provisions under Article 79 of Decree No. 139/2017/NĐ-CP

1. Acts of constructing in violation of the contents of the construction permit; constructing without a construction permit when such a permit is required; constructing in violation of approved design or construction planning or urban design for cases exempted from obtaining a construction permit, in addition to being subject to administrative penalties, shall also be subject to the measure of being compelled to return illegal gains as provided for in Clause 9, Article 13 of Decree No. 121/2013/NĐ-CP if they satisfy all six conditions below:

a) The violation occurred on or after January 4, 2008 and ended before January 15, 2018 but was discovered by an authorized authority on or after January 15, 2018, or was discovered before January 15, 2018 and had one of the following documents: Administrative violation record, decision on administrative penalty, decision on measures to remedy consequences, or supplementary decision on measures to remedy consequences.

b) Not violating the construction boundary.

c) Not affecting neighboring works.

d) There is no dispute.

đ) Constructing on land under lawful use rights.

e) Now complies with the construction planning approved by the competent authority.

2. As of January 15, 2018, individuals and organizations constructing single-family houses that commit violations as stipulated in Clause 1 of this Article shall be exempt from the measure of being compelled to return illegal gains as provided for in Clause 9, Article 13 of Decree No. 121/2013/NĐ-CP.

3. The amount of illegal gains that individuals and organizations committing violations as stipulated in Clause 1 of this Article must pay shall be determined as follows:

a) In the case of constructing a project for business purposes: The amount of illegal gains is the total square meters of floor area constructed in violation multiplied by the unit price of 1 square meter according to the purchase and sale or transfer contracts signed but not lower than the investment cost for the same type and level of projects issued by the competent authority, multiplied by 50%.

b) In the case of constructing a project not for business purposes: The amount of illegal gains is the total square meters of floor area constructed in violation multiplied by the construction cost of 1 square meter according to the approved budget but not lower than the investment cost for the same type and level of projects issued by the competent authority, multiplied by 50%.

c) In the case where there are no signed purchase and sale or transfer contracts or approved budgets: The amount of illegal gains shall be determined as the total square meters of floor area constructed in violation multiplied by the investment cost for the same type and level of projects issued by the competent authority, multiplied by 50%.

d) The authorized authority imposing administrative penalties shall apply the investment cost at the time of issuing the administrative penalty decision and shall be responsible for determining the amount of illegal gains to be paid according to points a, b, or c of this clause.

4. Violations that satisfy the conditions specified in points a, b, c, d, and đ of Clause 1 but do not satisfy the condition specified in point e of Clause 1 shall be handled as follows:

a) Violations discovered by the authorized authority before January 15, 2018, which have been recorded in an administrative violation record, decided upon in an administrative penalty decision, and decided upon in a decision compelling the return of illegal gains, but as of January 15, 2018, the violators have not yet fulfilled the payment of fines (if any) and the return of illegal gains, then the authorized authority imposing penalties shall issue a decision compelling the demolition of the entire or part of the illegally constructed project according to Point d, Clause 11, Article 15 of Decree No. 139/2017/NĐ-CP to replace the measure of compelling the return of illegal gains.

b) Violations discovered by the authorized authority from January 15, 2018 onwards shall be penalized according to Article 15 of Decree No. 139/2017/NĐ-CP. If Article 15 of Decree No. 139/2017/NĐ-CP provides a higher penalty for such violations than that provided for in Decree No. 121/2013/NĐ-CP, the penalty provided for in Decree No. 121/2013/NĐ-CP shall be applied along with the measure of compelling the demolition of the entire or part of the illegally constructed project according to Point d, Clause 11, Article 15 of Decree No. 139/2017/NĐ-CP. If the statute of limitations for administrative penalties has expired, no administrative penalty decision shall be issued, but a decision compelling the demolition of the entire or part of the illegally constructed project shall still be issued.

Article 7. Implementation Provisions

1. This Circular takes effect from June 12, 2018, replacing Circular No. 02/2014/TT-BXD dated February 12, 2014, issued by the Minister of Construction detailing and guiding the implementation of certain articles of Decree No. 121/2013/NĐ-CP dated October 10, 2013, of the Government on administrative penalties for violations in construction activities; real estate business; exploitation, production, and business of construction materials; management of technical infrastructure works; management of housing development and office buildings.

2. Ministries, ministerial-level agencies, People's Committees at all levels, related organizations, and individuals are responsible for implementing this Circular. Any difficulties arising during implementation should be promptly reported to the Ministry of Construction for consideration and resolution./.