Ho Chi Minh City authorities on Friday proposed two real estate developers are held criminally liable for "systematic" violations in projects they implemented together.
Investor Tan Hoang Than and contractor Mai Hoang have cooperated in eight projects that violated construction investment laws, including collapsing neighboring walls and grounds, extending area and the height beyond permitted levels, and carrying out construction without permit. Some of the violations were made in late March 2008.
Among the more notorious violations had to do with the "Royal" high-end office and apartment building, which damaged nearby structures and didn't follow the approved plan.
Nearly 20 customers gathered Wednesday to prepare to sue Tan Hoang Than as the project has been suspended since 2007 but they hadn't got their money back as promised.
"My family now has urgent need for a house but all our money has been poured into the project and we have no way to take it back," one customer,Vuu Dai Luong, was quoted by local newswire Vnexpress as saying Thursday.
Many of the people planning the lawsuit said the past two years has cost them a lot of money renting houses.
Nguyen Van Phuc, a representative of the Tan Hoang Than Company, told local newswire Vnexpress he would report the situation to company leader Vo Huu Than and reply to the customers soon.
But most of the customers said they wanted to meet with Than directly to resolve the matter at once as it has been dragged on for too long.
Land for the building was granted in April 2005 and in November 2006, the city Construction Department allowed the company to build office and apartments there, but half of the apartments had to be rented out.
But the company offered to sell more than half of the apartments at VND12.9 million (US$680) on average per square meter, and the construction caused cracks and land collapses in nearby houses, so it was suspended in 2007.
"If criminal charges cannot be pressed against the companies, we suggest posting their violations on the websites of HCMC People's Committee, the city Department of Construction and the Ministry of Construction," the department said in a note to the committee Friday.
More than a year ago, "Adonis" residential buildings invested in by the Van Thinh Hung Company in HCMC made headlines when it was found that the building was happening only on paper. Customers could not sue the company as the authorities said it was civil dispute, so the customers ended up receiving their money back little by little.
Bui Tien Thang, deputy general director of Sacomreal, the real estate arm of Saigon Commercial Bank (Sacombank), said customers of real estate projects need to pay attention to liability clauses in the contract.
Thang said the contract needs to specify the responsibility of the developers, how they will be fined and what the compensation will be if the customers do not get what they are promised in the contract.
He said it is better that customers invest in listed developers who will be afraid of their stock value being affected by bad reputations.