Dispute over co-purchase of housing project in District 12

I. Summary of the incident

Ms. D is a buyer of an apartment in a commercial housing project in District 12. From the time she signed the reservation form until the deposit contract, Ms. D made all payments on time and in full. However, the developer delayed signing the sales contract. From 2021-2022, due to difficulties caused by the Covid-19 pandemic, the developer’s construction was very slow, leading to a delay of more than a year in signing the sales contract and handing over the apartment. During this time, Ms. D also made payments a few months late, but the developer was unsympathetic and wanted to penalize her for breach of contract. Ms. D disagreed and wanted to terminate the deposit agreement because she felt the developer was not acting in good faith, and demanded a refund of the deposit received. The developer disagreed and wanted to penalize Ms. D with 50% of the deposit amount, or Ms. D had the right to resell the apartment to someone else. Ms. D disagreed with the solution offered by the developer. She only made a few late payments due to unforeseen circumstances, while the developer delayed payments for a whole year. Therefore, Ms. D sought legal advice from Inter Justice, as she was very worried because this was her life savings. The developer was a large corporation, while Ms. D was just an individual.

II. Provisions contained in the deposit agreement between the two parties and the actual implementation of the deposit agreement.

• The company carrying out the construction under the permit is an independent company, while the project’s investor, according to media reports, is a different company. In this case, the construction permit must be followed.
• The deposit agreement stipulates that if Ms. D unilaterally terminates the agreement, she will be liable for a penalty, losing the entire deposit amount.
• The deposit agreement also stipulates that if there is a delay in signing the sales contract, the developer must pay penalty interest calculated on the amount Ms. D has paid for the period of delay.
• The deposit agreement also stipulates that in the event of force majeure, both parties are exempt from liability for breach of contract.

The buying and selling process doesn’t always go smoothly with a turnkey solution.

III. Legal regulations related to the case

• It is a violation of the Civil Code regarding the parties to a contract if the actual investor is not the one signing the deposit agreement.
• According to the Housing Law, developers are only allowed to raise capital when they have fully complied with legal regulations. If capital is raised through other forms without meeting the necessary conditions, the fundraising is invalid.
• The fundraising agreement is invalid, meaning its terms are worthless.
• If the agreement is invalid, the parties must return to each other what they have received.
• The party at fault for rendering the agreement invalid if damage is caused must provide compensation.

IV. Inter Justice Lawyers’ Solutions

• In this case, negotiation to reach an agreement is the best solution.
• Ms. D authorized Inter Justice lawyers to work with the developer regarding the termination of the contract.
• The lawyer negotiated with the developer (the entity that received media attention) to return the money that Ms. D had paid.
• The negotiation process was tense because the developer was unwilling to return the money.
• Based on administrative, civil, and housing laws regarding invalid agreements and compensation for damages caused by fault, the lawyer pointed out the benefits of the developer returning the money to Ms. D.
• The refund demonstrates goodwill from the major developer, and furthermore, the apartment prices have increased compared to the initial sales period.
• The company accepted the lawyer’s solution, returning the full amount to Ms. D within one month of the termination agreement, and Ms. D also terminated her intention to purchase an apartment in the aforementioned project.