Vietnam real estate investor sued over promises

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Customers of a high-end apartment building in Ho Chi Minh City have prepared to sue the building investor who was late to deliver the houses and failed to pay full compensation as agreed.

 

Quoc Cuong Housing Investment and Development Company, which invested in the Quoc Cuong Gia Lai building in District 7, had promised in contracts that the houses would be given to customers between July and September 2009, but they were only ready in April this year, or 18 months late, the customers said at a meeting Sunday. 

 

According to the contracts, the investor in case of late delivery had to pay a monthly punishment of 1.5 percent of what the buyer already paid. Many buyers who paid late also had to compensate 1.5 percent of the unpaid money a month.

 

However, Quoc Cuong now relies on the Commerce Law, agreeing to pay only 8 percent in total of what the buyers have paid, for not fulfilling its responsibility.

 

The compensation was thus reduced from around VND100 million per customer to tens of million.

 

Many customers also complained about the quality of the apartments, which according to them is much worse than promised in the contract.

 

One of the customers said that the window at his apartment was smaller than the design, the toilet is not usable, the bedroom floor is made from industrial wood instead of natural wood, and many other rooms are tiled with low quality materials. 

 

The families have asked the investor to return them the difference of the material cost.

 

Management fees at the building is another problem, as many customers said that the fees were decided without their agreement and that they were higher than at similar buildings in the area.

 

Nguyen Nhu Loan, an officer from the investor, on Monday said the houses were late because more than 70 percent of the customers paid late, causing the investor to be short of funds and unable to proceed the project as scheduled.

 

"In principle, the company could end the contracts with late payers but it did not and it shared the difficulties with the customers instead," Loan was cited as saying in a VnExpress report.

 

Many families at the building did not agree with the argument and said they would continue with the lawsuit.

 

She also explained that natural wood doesn't look as pretty as the industrial wood, but the investor can change it for any customers who have demand.

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