Circular No. 12 on explaining certain specific policies regarding housing management

CIRCULAR

DECISION NO. 12/NV OF APRIL 22, 1964 ISSUED BY THE MINISTRY OF INTERIOR EXPLAINING SOME SPECIFIC POLICIES ON HOUSING MANAGEMENT

Respectfully submitted to: - PROVINCE, CITY, AND CAPITAL CITY PEOPLE'S COMMITTEES

Respectfully submitted to: - HOUSING AND LAND MANAGEMENT DEPARTMENTS OF CENTRALLY-GOVERNED CITIES.

       - HOUSING AND LAND MANAGEMENT OFFICES OF PROVINCES, PROVINCE-GOVERNED CITIES, AND MARKET TOWNS.

During and after the socialist transformation of privately-owned rental housing, the Party and State have issued many policies on housing management. However, at present, some places have not fully grasped the spirit of the central policies, leading to difficulties in addressing current complex issues. To meet local needs, the Ministry further explains the following specific policies:

1. MANAGEMENT OF ABANDONED HOUSING:

According to Decree No. 19/CP dated June 29, 1960 of the Council of Ministers and Circular No. 19/BCT dated January 12, 1961 of the Central Committee for the Transformation of Private Commerce and Industry, all abandoned housing, regardless of whether they belong to Vietnamese citizens or overseas Vietnamese, shall be directly managed by the Housing and Land Management Authority: leasing, collecting rent, paying taxes, and repairing. All agencies, enterprises, organizations, cooperatives, or private individuals using such housing must sign a lease agreement with the Housing and Land Management Authority, including cases where it is used for business, production, or healthcare, cultural, and educational purposes.

Up until now, we have not strictly managed abandoned housing, so some agencies and enterprises have included the housing they are currently using into their fixed assets. Now, the People's Committees must reclaim them for management according to the policy on abandoned housing.

The Housing and Land Management Authority must establish a record of income and expenditure for each house, belonging to each owner, to settle accounts with them when necessary.

For abandoned housing that is made of temporary materials like bamboo, straw, or reed (excluding solid wooden houses), the Housing and Land Management Authority may allow the current occupants to use them without paying rent. The users are responsible for maintaining and repairing the houses, and must return them to the Housing and Land Management Authority when they no longer need them for redistribution.

Abandoned housing should limit demolition except in cases necessary for public construction projects or when the houses are too dilapidated to repair. When demolition is required, the proceeds from selling raw materials should cover the demolition costs, with the remainder deposited in a bank.

Abandoned housing located in suburban or rural areas may be used for public benefit upon proposal by the Commune or District People's Committee and approval by the Provincial People's Committee, according to the policy on abandoned housing.

2. HOUSING OF THE REAL ESTATE BANK, AMERICAN AID, OR OTHER COLONIAL ORGANIZATIONS:

Housing constructed and leased by American aid now belongs entirely under the management of the Housing and Land Management Authority. Where the Financial Department still manages and collects rent, the People's Committee shall transfer management to the Housing and Land Management Authority (including both the housing and rent collected previously).

Previously, American aid organizations and the Real Estate Bank built houses and sold them to private individuals through installment payments or allowed private individuals to build houses on land provided by these organizations, with ownership reverting to the organizations after five to ten years. In such cases, if there is sufficient documentation, the following solutions apply:

- For privately-owned houses purchased through installments, if the buyer continues to pay off the remaining debt to the State, the house will belong to them. If additional payment is required but the buyer cannot afford it, the house will be managed by the State, with the amount already paid deducted from the time of usage, and any remaining balance deducted from future rent.

- For houses built and occupied by private individuals within five to ten years, which then revert to the ownership of the aforementioned organizations, the People's Committee should carefully confirm the formal ownership rights for those who invested in building the houses. The owners must maintain and repair the houses, comply with general regulations on housing, and obtain permission from the Housing and Land Management Authority when transferring ownership.

3. HOUSING OF RELIGIOUS INSTITUTIONS (EXCEPT CHURCHES AND HOUSES USED FOR WORSHIP):

Houses of foreign missionary societies shall be managed and used by the State.

Houses owned by individual clergy members who are foreigners and are not currently present here shall be managed and used by the State according to the policy on abandoned housing of overseas Vietnamese.

Houses used as schools, monasteries, convents, etc., which were rented since the restoration of peace, shall be handled similarly to other rental houses. If these houses are used by agencies without paying rent, the user agency is responsible for repairs when the houses are damaged. Repair costs must be documented and retained. If these houses are rented by agencies and rent is paid, the Housing and Land Management Authority is responsible for collecting rent, paying taxes, and allocating 60% of the rent to a bank for housing repair funds. The remaining amount is given to the legitimate manager. If there is no legitimate manager, the entire amount is deposited in the bank for settlement when needed.

4. SITUATIONS WHERE HOUSING IS NOT TRANSFERRED TO STATE MANAGEMENT:

Privately-owned rental housing subject to transformation, and abandoned housing illegally managed by private individuals who refuse to hand over the housing to state management now, the Provincial or City People's Committee shall issue a decision requiring them to transfer the housing to the Housing and Land Management Authority for management according to the policy. If they fail to comply, it will be considered non-compliance with the policy, and the People's Committee may consider prosecution before the Court.

5. HOUSING OF PRIVATE CAPITALISTS ENTERING PUBLIC-PRIVATE PARTNERSHIPS:

Housing of capitalists used for commercial and industrial operations such as shops, warehouses, management offices, etc., which were not resolved in previous public-private partnerships, shall be managed by the Housing and Land Management Authority according to the housing transformation policy.

If the above types of housing were inventoried, valued, and compensated in previous public-private partnerships but are now used as residences or workplaces, they shall be managed by the Housing and Land Management Authority, rented out, and a fixed percentage of rent paid to the owner.

6. FIXED RENT PERCENTAGE PAID TO THE OWNER:

The purpose of paying rent to the landlord is to assist the landlord in gradually improving their working conditions after renovation so that they can eventually live solely on their labor. Therefore, the rent ratio is fixed. The landlord cannot request an increase in the rent ratio even if the rental price increases after repairs. Conversely, if houses deteriorate during use, reducing their value or becoming unusable, the rent ratio paid to the landlord will decrease or cease.

If the landlord dies or goes missing, and their spouse requests it, we should consider allowing the spouse to continue receiving the rent ratio.

Additionally, the issue of inheritance regarding the receipt of the rent ratio for another person will not be resolved. Except in cases where the landlord dies or goes missing and their children are still young or in school and have no other source of livelihood, the local authority may consider and provide assistance to those children.

7. Repairing damaged houses combined with urban and town housing improvement:

Houses managed by the housing and land management agency should combine equipment improvement with repair work each time they are repaired, while also combining with housing improvement to enhance the city's beauty.

However, if the house is not damaged and does not require repair but must be repaired due to the city's beautification requirements (for example, cutting down or dismantling part of the house), the cost shall be borne by the city construction fund and not from the housing and land management agency's repair fund.

8. Using proceeds from selling ownerless property:

According to Circular 46/TTg dated April 18, 1962, issued by the Prime Minister's Office, the proceeds from selling ownerless property must be deposited into the Bank. The administrative committee of the district, city, or province may permit the housing and land management agency to withdraw these funds to repair ownerless houses, and to allocate funds for preserving the owner's personal belongings left behind.

In addition to the above cases, when intending to use these funds for other purposes, approval from the Ministry of Home Affairs is required.

9. Capital mobilized by landlords for repairs during renovation:

This capital has two types:

- Landlords within the scope of renovation are responsible for repairing the house before transferring it to state management. If the landlord fails to organize timely repairs, they must contribute the necessary funds for the housing and land management agency to carry out repairs later. This amount of money does not accrue interest for the landlord.

- Landlords who have completed their repair obligations and voluntarily contribute additional funds for future repairs or additions to the house will receive an interest rate of 3 to 5% according to the bank's regulations. The bank must pay this interest to the housing and land management agency, which will then settle it with each landlord, rather than directly to the landlord. This matter was stipulated in Circular 156/CT dated July 19, 1961, issued by the Central Committee for the Renovation of Private Commerce and Industry to the State Bank of Vietnam.

Once the additional capital contributed by the landlord is fully utilized, the landlord will no longer receive interest.

10. The housing and land management agency purchases repair materials at supply prices.

According to Circular 363/TTg dated September 12, 1961, issued by the Prime Minister's Office, the housing and land management sector is budgeted to purchase repair materials at supply prices.

Where the housing and land management sector currently buys repair materials at retail prices, adjustments need to be made by the administrative committee to avoid affecting the repair budget.

Not only for the housing and land management agency but also for private individuals who need to repair their houses and lack the financial capability, if they need to borrow from the bank for repairs, the state will sell them repair materials at supply prices to encourage them in house repairs.

11. Houses rented under this scheme without repair funds wishing to sell or donate.

The ultimate goal is to eliminate the private rental housing system, but until then, it is necessary to study an appropriate policy for this type of landlord. For now, we need to strictly manage:

- Rental prices.

- Rental contracts.

- Deducting a percentage of monthly rent to be deposited with the Bank as a repair fund.

Up to now, many places have not managed these aspects well, especially failing to monitor and urge landlords to fulfill their obligation to deposit a portion of the rent into the Bank, so when houses deteriorate, landlords become inactive. In some places, landlords request to donate their houses, while others request to sell them or demand the State to undertake repairs.

Our policy is: if the house is dilapidated, the landlord must take responsibility for repairs. If the landlord lacks the ability to repair, efforts should be made to encourage tenants to undertake repairs and deduct the cost from future rent (with an additional 15% on the amount spent) or introduce the landlord to apply for a loan from the Bank to carry out repairs.

Making landlords understand their duty in repairing damaged houses involves persistent education, persuasion, and struggle to get them to invest money in repairs or apply for a Bank loan for repairs. Local authorities must lead and assist housing management agencies in continuing to effectively implement educational and reform programs for private individuals who own rental properties, combined with promoting repairs of damaged houses.

In cases where they wish to sell (landlords under this category), we may also consider allowing them to sell, but both the seller and buyer must ensure the residential rights of tenants, without causing any difficulties for current tenants, and the buyer must continue to undertake repairs on the house. House sales must be approved by the Administrative Committee and registered with the housing management agency at the district, city, provincial, or municipal level according to general regulations.

For overseas Vietnamese returning to the country, we should encourage them to invest in building new houses, thereby increasing the housing stock rather than engaging in buying and selling which does not increase the existing housing stock.

For state agencies and enterprises lacking housing and office space, we should not allow them to purchase from the public but instead remind them to use allocated funds for constructing new houses.

Finally, for damaged houses that cannot be repaired through the above measures, the housing management agency must undertake repairs to maintain and protect the housing stock from deterioration and wear, affecting the housing issue for urban residents. The housing management agency will manage the use of such houses and may only compensate the landlord for the value of the old house or provide no compensation.

Regarding requests to donate houses from landlords, the State currently does not promote "donation." However, for specific cases such as cadres, workers, civil servants, and young laborers currently working in state agencies and enterprises, if they genuinely volunteer and urgently request it, we may consider resolving their requests after obtaining local party committee approval, but this applies only to cases where the donated house is still in good condition. If the house is already dilapidated before donation, it should be treated as a case requiring repair rather than a donation.

We recommend that the Administrative Committees of districts, cities, and provinces apply the spirit of this Circular appropriately in their respective areas. Any points not covered or not suitable for local characteristics should be reported specifically to the Ministry for review, research, and supplementation.