What happens when apartment buildings reach end of service life in Vietnam?

Under Article 58 of Vietnam’s 2023 Housing Law, when an apartment building reaches the service life specified in its design documents, or even before that point if it has deteriorated, poses a risk of collapse, or is otherwise unsafe, the competent authorities must conduct an inspection to assess the building’s condition, according to housing law expert Ngo Gia Hoang.

As per the law, the Departments of Construction of provinces and cities are responsible for taking the lead in inspecting and assessing apartment buildings in their jurisdiction.

Apartment owners are required to cooperate with and facilitate the work of the inspection organization.

The inspection results are crucial in determining whether the building remains safe and whether residents may continue living there.

If the building is found to be safe, residents can continue using their apartments as normal.

The inspection conclusion will specify the period for which the building may continue to be used, and this information must be publicly posted on the Department of Construction’s official website.

If the inspection determines that the building must be demolished, the authorities will carry out procedures to relocate residents and demolish the building for redevelopment or reconstruction, or deal with the land in accordance with the law.

A common situation requiring demolition is when the building’s main load-bearing structures have deteriorated to a dangerous level, creating a risk of collapse and making the building no longer fit for continued use.

In simple terms, reaching the end of a building’s service life is not the same as an expiration date.

It is the point at which the building’s condition must be reviewed and inspected.

The date itself does not automatically invalidate the legal title to an apartment.

If the building is ultimately required to be demolished, residents will be relocated and the rights and interests of apartment owners will be dealt with in accordance with applicable regulations.

When must apartment owners pay toward reconstruction?

Under the 2023 Housing Law, if the apartment building’s location remains consistent with the approved planning and a new apartment building is to be constructed on the site, residents who wish to remain there will be entitled to on-site resettlement.

If the site is no longer compatible with the planning and a new apartment building cannot be built there, owners may receive compensation in cash or be provided with resettlement housing at another location.

Those who are resettled will have ownership rights over their resettlement homes.

Therefore, demolition does not mean that apartment owners simply ‘lose everything’ or have to hand over all their rights to a developer.

However, the rights and financial obligations of owners can differ depending on whether the building qualifies as an old apartment building under the law.

For old apartment buildings constructed in 1994 or earlier, owners are not required to contribute to the cost of rebuilding when the building is demolished for renovation and reconstruction.

Instead, they are entitled to compensation in the form of a new apartment.

Under Decree 98/2024, which provides detailed regulations on the renovation and reconstruction of apartment buildings under the Housing Law, owners of ground-floor apartments in old buildings are entitled to a replacement apartment with an area one to two times that of their original apartment.

Owners of apartments on the second floor and above are entitled to a new resettlement apartment with an area one to 1.5 times that of their original apartment.

If the resettlement apartment is larger than the area for which the owner is entitled to compensation, the owner must pay for the difference.

If it is smaller, the developer must pay the owner compensation for the difference.

Owners who do not wish to receive a resettlement apartment may instead opt for cash compensation based on the approved compensation plan.

For apartment buildings constructed from 1995 onward, the rules are different.

When such a building is demolished and reconstructed, owners are required to contribute to the cost of constructing their replacement apartments.

The amount is determined based on the area of the new resettlement apartment and the construction cost of the new housing, according to the specific plan for each project.

If an owner does not contribute the required amount toward reconstruction, they will not be allocated a new apartment.

Instead, their rights will be settled based on the value of their property.

Depending on the reason for demolition, owners may also be entitled to compensation for the value of their share of the common land-use rights.

Where a building is demolished as part of a comprehensive renovation or urban upgrading project carried out in accordance with approved planning, the remaining value of the apartment and other privately owned areas may also be taken into account.