A group of owners of three high-end apartment blocks in Vietnamese tourism resorts say they were assaulted when they gathered in front of the Vingroup headquarters in Hanoi to claim their rights.
The protesters bought units in the Vinpearl Empire Condotel (VEC) and Vinpearl Beachfront Condotel (VBC) in the southern seaside resort of Nha Trang, and the Vinpearl Riverfront Condotel (VRC) in Da Nang on the central coast, from the Vinpearl Joint Stock Company, a unit of the Vietnamese conglomerate.
They said Vinpearl had not honored the apartment contracts and had been renting out units without paying the agreed amount to the owners so they took their protest to the Vietnamese capital on Nov. 15. The protesters demanded to be given their Pink Books, which certify property ownership.
Dozens of apartment owners gathered near the Vincom Plaza Long Bien building where Vingroup’s headquarters is located, asking to meet company officials to resolve the dispute. They said they were met by guards in military-style camouflage uniforms and young men with tattoos. The company had earlier erected protective barriers to prevent them coming to claim ownership of their units, protesters said.
An owner of an apartment in VEC told RFA Vietnamese when the apartment owners approached the company headquarters, a group of young people grabbed a box of red T-shirts they were planning to wear when they went to negotiate.
Unlike Vinpearl apartment owners in Da Nang, who have T-shirts with the yellow text “We request VIN returns Pink Books to VRC Da Nang residents,” VEC T-shirts have no message, said the woman who went by the pseudonym Hoa for safety reasons.
When a foreigner, whose Vietnamese wife owns one of the Nha Trang units, took back a shirt, two guards in camouflage uniforms and one in a white security guard’s uniform broke his arm as they took the shirt back, she said.
A video clip taken at the scene shows a man with a nosebleed, who protesters said had been beaten by people in plain clothes and pushed by a Vingroup security guard. The man had a broken nose and had to be treated in the hospital, Hoa said.
The protesters eventually managed to enter Vingroup’s headquarters and meet with Vinpearl’s Customer Service Manager, Ho Thi Thanh Thuy. However, when a female customer took a red shirt out to ask her about the assault at the gate, security guards rushed in and grabbed the shirt.
Hoa told RFA Thuy told protesters: “This is Vin’s headquarters and territory, if you suddenly rush into someone’s house, of course they have to beat you.”
Sold above market price
The VEC project has 1,200 apartments on a plot of land listed as “Urban residential land (not forming residential units),” according to documents issued by the Department of Natural Resources and Environment of Khanh Hoa province on June 9, 2022, suggesting that the owners could not live there permanently but could rent the apartments to tourists.
In 2016, Hoa bought an apartment in the VEC mixed-use building for VND2.3 billion (U.S. $100,000) while the market price at that time was only VND1 billion.
Another investor in VEC, who wished to be known by the pseudonym Hong because of the sensitivity of the matter, told RFA that in the purchase contract between her and Vinpearl the apartment is listed as being under the buyer’s permanent ownership, but in the Pink Book that other investors received it is recorded as a tourist apartment/condotel which cannot be a permanent residence and does not have a clear legal framework.
Hong has yet to receive the Pink Book, and Red Book (which certifies land use rights), for her apartment in VEC, and said Vinpearl had blamed the delay on Khanh Hoa province authorities.
“According to the Law on Real Estate Business, the investor can only pay 95% of the apartment cost when there is no Pink Book for the customer but it is illegal for Vinpearl to take all my money six years ago without giving me the Red Book/Pink Book,” she said. Apartment owners can only pay the remaining 5% after receiving the Red and Pink Books.
Hong said investors were also unhappy about a clause in the sales contract, saying Vinpearl collects 2% of the apartment value to use as a maintenance fund and establish a building management board to oversee the fund. She said, to date, Vinpearl has not established a board of directors and not reported how the fund is used.
Rental Apartment Management Program
When they signed contracts with Vinpearl, Hoa and other investors leased the units to the company under the “Apartment Management Program” for 50 years with the promise of paying 10% of the apartment value per year for the first five years, receiving 85% of the profit from tourism rentals from the sixth year and paying the remainder as the management fee.
In the first five years (2016-2021), Vinpearl fulfilled its promise. In the first six months of this year however, the company did not pay rent to apartment owners, citing a capital loss due to having no tenants. However, Vinpearl did not provide rental unit reports for the period to unit owners.
Hong told RFA someone living near the building told her a lot of people came to rent rooms after COVID-19 restrictions were removed.
“At night, the lights are on in the apartment, but Vinpearl said there were only [people] renting for single nights in the first six months of this year,” said Hong.
Hundreds of investors in the three projects want to stop subletting and take back their apartments so they can manage them or rent them out through other companies, but Vinpearl refuses to negotiate even though the sublease contract contains a clause allowing the purchaser to cancel the management contract after five years. The company will not even cancel contracts if owners pay the stipulated 8% penalty unless 90% of the owners agree to cancel.
About 550 owners of tourist apartments in the three projects have formed groups to find ways to deal with the company, Hoa said. Many owners suspect that Vingroup’s subsidiary will not return the apartments because it wants to buy them back cheaply, she said. Company staff offered Hoa VND1-1.5 billion (U.S. $40-60,000) for her apartment, she told RFA.
Vinpearl hands over management to Melia?
There have been reports that Vinpearl transferred the project to lease tourist apartments to Melia Vietnam Co., Ltd and renamed the apartments Melia VEC, Melia VRC and Melia VBC, Hoa said.
“Vinpearl worked with Melia on its own and transferred the rental management without notifying the owners, indicating that it was a business partnership.” said Hoa. “Vinpearl did not disclose the cooperation agreement’s contents, saying it had no obligation to publish.”
Not all apartment owners are rich and bought them with years of savings or bank loans with 13% annual interest rates. The fact that Vinpearl does not pay interest makes their lives miserable, she said.
RFA emailed Vingroup and Vinpearl but only received an automatic reply from Vinpearl’s customer service department saying it would reply “as soon as possible.”
A reporter also called Melia Vietnam. The person who answered the phone said the communications officer was away and set another date for a meeting.
Vietnam’s state-controlled media has been silent about the violence surrounding the Nov. 15 protest in Hanoi.