For households on the first floor, owners will be compensated with resettlement apartments with an area equal to 1-2 times the usable area of ​​the demolished apartment. This is one of the regulations in Article 28, Decree 98/2024/ND-CP on renovation and reconstruction of apartment buildings, effective from August 1, 2024.

In addition, the Decree also clearly states that in case the owner of an apartment on the first floor has a part of the apartment area for business, when resettling, the owner will be able to buy or rent the corresponding part of the floor area for business services and commerce in the new project.

The conflict of interests between the parties is the reason why the renovation and reconstruction of apartment buildings and collective housing areas is still slow. Photo: Le Toan

For apartments from the 2nd floor and above, owners are compensated from 1 to 1.5 times the usable area of ​​the demolished apartment.

In case the area of ​​the resettlement apartment is larger than the compensated area, the apartment owner must pay the difference. Conversely, if the resettlement apartment is designed to be smaller than the compensated area, the investor must pay the owner the difference in area value.

Accordingly, the difference in value will be equal to the difference in area multiplied by the price of newly built housing issued by the Provincial People's Committee.

In addition, in case the homeowner does not have a need for resettlement, the compensation will be converted into cash based on the selling price of the resettlement apartment proposed by the investor.

For individuals who have a need to buy or rent-purchase social housing and meet the conditions to enjoy the policies of this segment, they will be arranged to buy or rent-purchase according to the provisions of law.

In case the apartment is the collateral of a credit institution, the handling of the resettlement apartment after reconstruction or the handling of the compensation amount shall be carried out in accordance with the provisions of civil law.

Currently, in old apartment buildings, many homeowners often expand the area of ​​their houses to double or even triple the area in the red book. When selling, the homeowner will include the expanded area in the price. However, when compensating, the State will only base on the area in the red book to determine compensation and resettlement.

This is clearly stated in Article 28, Decree 98/2024/ND-CP. Accordingly, the usable area of ​​the apartment will be determined through documents proving land use rights, ownership of assets attached to the land over periods or meeting the conditions to be granted this certificate according to the provisions of law.

According to the Ministry of Construction, the country currently has more than 2,500 old apartment buildings and collective houses. Of these, Hanoi has the largest number with nearly 1,600, most of which were built between 1960 and 1992. However, only less than 2% of the total number of old apartment buildings in the capital have been renovated. Similarly, the number of renovated buildings in Ho Chi Minh City is only about 1%.

According to experts, the reason why old apartment buildings and collective houses have slow repair and renovation speed is because there have not been specific policies to create harmony of interests among all parties, including the government, people and businesses as investors.

Commenting on Decree 98/2024/ND-CP, Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association, said that the current mechanism is much more attractive than before. The compensation and support policy for renovating and rebuilding old apartments is now fairer between owners and investors of renovation and rebuilding projects.

With Decree 98/2024/ND-CP, it is expected that the difficulties and conflicts of interest between the parties will be successfully resolved. From there, the progress of renovation and construction of old apartment buildings and collective houses will be accelerated; contributing to improving the quality of life of the people and beautifying the urban landscape.