Tourism real estate – a number of key legal issues for consideration

Tourism real estate, such as condotels, resort villas, shophouses within tourism developments, and similar property products, experienced significant growth in major tourist destinations across Vietnam. However, for many years, these property types were not expressly recognized under Vietnam’s legal framework governing land, housing, and real estate business. As a result, real estate developers encountered considerable legal and practical challenges in the development, construction, operation, and commercial exploitation of these projects, arising not only from regulatory uncertainty and inconsistent policies but also from legal issues in their relationships with purchasers and investors.

The enactment of the Law on Real Estate Business 2023 [1] and the Land Law 2024 [2] marks a significant milestone in the legal framework governing tourism real estate. These legislative reforms establish a clearer legal foundation for the development and operation of tourism real estate projects, thereby providing greater legal certainty for developers, investors, and other market participants.

This article examines several key legal issues surrounding the development of tourism real estate under Vietnam’s current legal framework.

A. WHAT IS TOURISM REAL ESTATE?

Vietnamese legislation, including the Law on Real Estate Business, the Land Law, the Law on Investment, and the Law on Tourism, does not provide a uniform legal definition of tourism real estate. Instead, the Law on Real Estate Business 2023 refers to “construction investment projects for works serving tourism purposes.” Accordingly, tourism real estate may generally be understood as real estate developed and operated for tourism-related purposes. Under the Law on Tourism 2017, tourism is defined as “activities associated with a person’s trip outside his or her regular place of residence for a period of not more than one consecutive year to satisfy the needs for sightseeing, leisure, recreation, exploration of tourism resources, or other lawful purposes.” [3]

The Law on Tourism 2017 also identifies several types of real estate/accommodation establishments that serve tourism purposes, including [4]: Hotels, resort villas, condotels, tourist guesthouses, and houses with rooms available for tourist rental [5].

In addition, certain earlier regulatory instruments expressly referred to concepts such as condotels and resort villas [6]. These remain among the most common forms of tourism real estate developed, constructed, and commercially operated in the Vietnamese market.

B. A NUMBER OF KEY LEGAL ISSUES FOR CONSIDERATION

1. Land use regime and land use term applicable to tourism real estate

Historically, the legal classification of land used for tourism real estate projects has been the subject of considerable debate. Given that tourism real estate serves both commercial purposes and short-term accommodation, differing views existed as to whether such projects should be developed on residential land or on commercial and service land with a fixed land use term.

The Ministry of Natural Resources and Environment clarified this issue in Official letter No. 703/BTNMT-TCQLDD dated 14 February 2020, confirming that tourism real estate should be classified as commercial and service land.

Under the Land Law 2024, a real estate developer undertaking a tourism real estate project (the “Developer”) may lease land from the State either by making a one-off rental payment for the entire lease term or by paying annual land rent [7]. The land lease term is determined based on the operating term of the investment project and generally may not exceed 50 years, although, in exceptional circumstances, a term of up to 70 years may be granted [8]. The lease term is calculated from the date on which the competent state authority issues the land lease decision [9].

From a commercial perspective, this statutory framework has important implications for project planning. As the land lease term begins to run from the date of the land lease decision rather than the completion of construction, any delay in project development will directly reduce the period during which the tourism real estate may be commercially operated. Developers should therefore carefully plan project implementation, expedite construction, and complete the project as efficiently as possible to maximize the project’s commercial lifespan and recover their investment costs.

Although land allocated for tourism real estate is subject to a fixed term, the Developer may apply for an extension of the land use term. An application for extension must be submitted no later than six months before the expiry of the existing land use term. Failure to submit the application within this statutory period may result in the competent authority recovering the land in accordance with applicable law [10]. It should also be noted that, before applying for an extension of the land use term, the Developer must first obtain an extension of the operating term of the relevant investment project [11].

2. Recognition and protection of the right to obtain a certificate of land use rights and ownership of assets attached to land for tourism real estate

For many years, the issuance of a certificate of land use rights and ownership of assets attached to land (commonly referred to as the “Certificate”) for tourism real estate remained one of the most contentious legal issues in Vietnam’s real estate market. The uncertainty primarily stemmed from the absence of clear and consistent provisions under the previous land law framework regarding the certification of ownership of tourism accommodation facilities, which, although designed for accommodation purposes, are not legally classified as residential housing.

The Law on Real Estate Business 2023 has substantially addressed this long-standing issue by establishing a clearer and more transparent legal framework, thereby safeguarding the right of purchasers and investors in tourism real estate to obtain a Certificate. Specifically, the Law expressly recognizes the following categories of tourism real estate as property eligible for commercial transactions: (i) Completed construction works and off-plan construction works serving tourism purposes [12]; and (ii) Floor areas within completed construction works and off-plan construction works serving tourism purposes [13]. Accordingly, tourism real estate is now expressly recognized as a category of real estate that may be lawfully offered for sale and other commercial transactions under Vietnam’s real estate legislation.

More importantly, one of the fundamental principles introduced by the Law on Real Estate Business 2023 provides that: “Purchasers and hire-purchasers of residential houses, construction works, and floor areas within construction works in accordance with this Law shall be granted by the State a certificate of land use rights and ownership of assets attached to land in respect of the residential houses, construction works, or floor areas they have purchased or hire-purchase.” [14] (Emphasis added.)

Naturally, purchasers or investors in tourism real estate (the “Investor”) must still satisfy the statutory conditions and comply with the prescribed procedures for the issuance of the Certificate. Nevertheless, the above provisions clearly demonstrate that both the Land Law 2024 and the Law on Real Estate Business 2023 now provide an express legal basis safeguarding the Investor’s right to obtain a Certificate. Furthermore, the law expressly requires the seller (the Developer) to carry out the procedures for obtaining and delivering the Certificate to the purchaser (the Investor) [15]. Accordingly, Investors can invest with greater confidence, without concerns about the lack of clarity or transparency surrounding the legal framework applicable to this type of real estate.

3. Sale and Purchase Agreements for Tourism Real Estate

To promote consistency and transparency in tourism real estate transactions, the Law on Real Estate Business 2023 and its implementing regulations prescribe mandatory template sale and purchase agreements for tourism real estate. Developers are required to use these statutory templates when entering into transactions with purchasers [16]. Under Decree No. 96, two standard forms of sale and purchase agreement are prescribed [17]: (i) Form III.a – Standard sale and purchase agreement for the sale of floor areas within a construction work serving tourism and accommodation purposes (the “Condotel Sale and Purchase Agreement”); and (ii) Form III.b – Standard sale and purchase agreement for the sale of an entire construction work serving tourism and accommodation purposes (the “Resort Villa Sale and Purchase Agreement”).

When using these statutory forms, Developers should pay particular attention to the following compliance requirements:

• The Developer may use the contract to enter into agreements with customers only after publicly disclosing the contract template in accordance with applicable law [18].

• Preparation of the agreement. Developers are required to use the prescribed template without altering its mandatory provisions. Additional provisions may only be inserted where expressly permitted by the template, provided that such additions do not violate mandatory legal provisions, contravene public morality, or amend or conflict with the mandatory terms of the statutory template [19].

• Amendment of the agreement. Where a Developer amends or supplements a standard form agreement that has already been publicly disclosed, the amended version must also be publicly disclosed in accordance with applicable regulations [20].

While the statutory templates provide greater legal certainty for tourism real estate transactions, several issues remain of particular interest to both Developers and Investors.

First, the Condotel Sale and Purchase Agreement applies to the sale of individual apartments within a building designed for tourism and accommodation purposes. Unlike standalone resort villas, buildings comprising multiple condotels inevitably require an operational and management framework. This raises a number of practical legal questions, including whether a management board must be established, whether a building owners’ meeting is required in a manner similar to residential apartment buildings, and how matters such as maintenance funds, operation and management fees, the appointment of the building management operator, and the adoption or amendment of building management rules should be governed. Unlike residential apartment buildings, however, Vietnam’s legal framework does not yet provide a comprehensive regulatory regime governing the management and operation of tourism real estate. The statutory Condotel Sale and Purchase Agreement addresses only a limited number of these issues. Consequently, significant legal uncertainty remains, and differing interpretations continue to exist in practice regarding the management and operation of tourist apartment developments [21].

Second, regarding the assignment of contracts, the regulations on the assignment of contracts for the sale and lease-purchase of houses and construction works under the 2023 Law on Real Estate Business do not cover the assignment of contracts for the sale of completed construction works and off-plan construction works [22]. The provisions on the transfer of rights and obligations in the standard-form contracts do not provide for the purchaser’s right to assign the contract (the assignment of contracts only applies to lease-purchase contracts for tourism real estate). Therefore, in practice, there is currently no clear legal basis for Investors to assign contracts for the sale and purchase of tourism real estate [23].

Third, the statutory template agreements provide only four circumstances in which the parties may terminate the agreement [24]: (i) by mutual agreement of the parties; (ii) where the purchaser fails to make payment in accordance with the agreed payment schedule; (iii) where the Developer fails to hand over the tourism real estate within the agreed period, and such delay constitutes a contractual ground entitling the purchaser to unilaterally terminate the agreement; or (iv) where performance becomes impossible due to a force majeure event.

4. Operation of tourism accommodation businesses following acquisition of tourism real estate

Unlike residential housing, which is acquired primarily for personal occupation, tourism real estate is developed for tourism accommodation and commercial operation. Accordingly, once the acquisition is completed, Investors rarely occupy the property themselves. Instead, they typically seek to generate returns by making the property available for short-term tourist accommodation through one of two principal models: (i) operating the accommodation business independently; or (ii) appointing or cooperating with the Developer or a professional operator to manage and operate the property on their behalf [25].

a. Independent Operation by the Investor

From a legal perspective, operating tourism accommodation constitutes a conditional business line under Vietnamese law. Accordingly, an Investor wishing to operate the property independently must satisfy the applicable statutory requirements, including: (i) obtaining the appropriate business registration (whether as a household business or an enterprise); (ii) complying with regulations on security and public order, fire prevention and firefighting, environmental protection and, where applicable, food safety requirements (where catering services are also provided); and (iii) satisfying the minimum standards relating to facilities, technical infrastructure and tourism services applicable to the relevant type of tourist accommodation [26].

Although Vietnamese law permits Investors to operate tourism accommodation businesses independently, the practical ability to satisfy these statutory requirements largely depends on the nature of the property. For standalone resort villas with independent infrastructure, obtaining the necessary licenses and satisfying the operational requirements is generally achievable. By contrast, where an Investor owns a condotel within a multi-owner development, compliance becomes considerably more complex. Requirements relating to fire safety, security, technical infrastructure and building operations generally apply to the building as a whole rather than to individual units. As a result, it is often impracticable for an individual owner to satisfy these requirements independently without the cooperation of the building management entity or the project’s overall operator. This practical reality largely explains why entrusted operation arrangements and management cooperation with the Developer remain significantly more common than independent operation by individual Investors.

b. Cooperation with the Developer

Cooperation between the Investor and the Developer in operating tourism accommodation generally ensures consistency in service quality, operational standards and overall project management. This approach is also encouraged under the current regulatory framework, which recommends that owners of condotels and resort villas within the same development appoint a single operator to provide tourism accommodation services [27]. From a legal perspective, it is important to distinguish the cooperation arrangement from the statutory sale and purchase agreement discussed in Section B.3 above. The cooperation agreement constitutes an independent civil contract governed by the Civil Code No. 91/2015/QH13 dated 24 November 2015 (the “Civil Code 2015”) and is negotiated freely between the parties, subject to general principles of Vietnamese contract law.

In practice, cooperation arrangements generally take one of the following forms:

First, guaranteed return model

Under this model, the Developer guarantees the Investor a fixed annual return throughout the agreed contractual term, irrespective of the property’s actual operating performance. This model was widely adopted during the rapid expansion of Vietnam’s tourism real estate market, with guaranteed returns commonly ranging from 8% to 12% per annum. However, a number of Developers subsequently failed to honor these commitments because the guaranteed returns had been based on optimistic market assumptions rather than actual operating performance. Tourism accommodation businesses are inherently affected by occupancy rates, tourism demand, macroeconomic conditions and other market variables.

Accordingly, where the parties intend to adopt a guaranteed return model, the projected return should be assessed carefully against realistic assumptions regarding occupancy levels, market conditions, tourism demand and the location of the project, so as to ensure that the commitment remains commercially sustainable throughout the contractual term.

Second, revenue-sharing model

Under this model, the Developer agreed percentage of the gross revenue or net operating profit to the Investor based on the property’s actual operating performance. Compared with the guaranteed return model, this approach is generally regarded as more transparent and commercially sustainable because the Investor’s return reflects the actual financial performance of the project.

The key legal and commercial issue under this model is the transparency of revenue and cost reporting. To enhance Investor confidence and minimize potential disputes, Developers should consider incorporating contractual provisions dealing with periodic financial reporting, Investors’ rights to review relevant accounting records, and, where appropriate, independent audits of operating results.

Third, leaseback arrangement

Under a leaseback structure, the Investor acquires ownership of the tourism real estate and subsequently leases the property back to the Developer for a fixed rental payment over an agreed term. The Developer then manages the property and subleases it to tourists for commercial gain. From a legal perspective, this arrangement constitutes a lease of property governed by the Civil Code 2015. It enables the Investor to receive a stable rental income while separating ownership of the property from the commercial risks associated with operating the tourism accommodation business.

When entering into a leaseback arrangement, the parties should use the statutory template lease agreement prescribed in Appendix IV to Decree No. 96 for the lease of construction works or floor areas within construction works, together with the relevant provisions of the Civil Code 2015. The above models represent several of the principal structures available to Developers and Investors for the commercial operation of tourism real estate. Importantly, these operational arrangements are legally independent of the tourism real estate sale and purchase agreement. From a commercial perspective, Developers may consider preparing such cooperation or operation agreements alongside the Condotel Sale and Purchase Agreement and/or the Resort Villa Sale and Purchase Agreement. Doing so not only enhances the commercial attractiveness of the project but also transforms the relationship between the Developer and the Investor from a simple sale transaction into a long-term commercial partnership in which both parties share the benefits generated by the project.

C. KEY TAKEAWAYS FOR DEVELOPERS OF TOURISM REAL ESTATE PROJECTS

The foregoing analysis demonstrates that, while Vietnam’s legal framework governing tourism real estate has become significantly clearer under the Land Law 2024 and the Law on Real Estate Business 2023, Developers must still navigate a range of legal and commercial issues, from land tenure and ownership certification to statutory contract requirements and operational arrangements. Against this background, Developers should consider the following key legal and practical issues to ensure regulatory compliance, minimize dispute risks and protect the long-term value of both their projects and their brands.

1. Ensure full legal compliance before marketing or selling the project

Before commencing any fundraising or sales activities, the Developer should ensure that the project satisfies all statutory conditions for being offered for sale under the Law on Real Estate Business 2023, including compliance with land-related legal requirements, project implementation milestones and other applicable conditions. The Developer should also fulfil all disclosure obligations and, where required, obtain the statutory bank guarantee for off-plan properties.

Offering tourism real estate for sale before satisfying the statutory conditions may expose the Developer not only to administrative sanctions but also to contractual disputes and potential claims brought by Investors.

2. Strictly comply with the statutory contract templates and disclosure requirements

Developers are required to use the statutory contract templates prescribed in Appendix III to Decree No. 96 when selling the tourism real estate and to publicly disclose those templates before entering into any transaction with purchasers. The same disclosure obligation also applies to any subsequent amendments or supplements.

Compliance with these requirements should not be viewed merely as a regulatory obligation. Proper disclosure of the contractual terms and consistency between the disclosed template and the executed agreement provide Developers with an important layer of legal protection by reducing the likelihood of contractual disputes and strengthening their position in the event of future claims.

3. Carefully structure operational arrangements and guaranteed return commitments

The experience of Vietnam’s tourism real estate market provides a valuable lesson regarding guaranteed return schemes. Fixed annual returns of between 8% and 12% were once widely used as a marketing tool to attract purchasers. However, when actual operating performance failed to meet expectations, many Developers found themselves unable to honor those commitments, resulting in substantial financial liabilities, legal disputes, reputational damage and declining market confidence.

Accordingly, Developers should carefully consider the commercial sustainability of any guaranteed return program. In particular, they should: (i) establish any guaranteed return on the basis of prudent financial modelling, realistic occupancy rates, market conditions and the characteristics of the project, rather than using aggressive guarantees as a short-term marketing strategy; and (ii) consider adopting transparent revenue-sharing arrangements supported by periodic independent audits instead of fixed guaranteed returns that bear little relationship to actual operating performance.

4. Verify purchaser eligibility in transactions involving foreign elements

Where tourism real estate is marketed to foreign purchasers, Developers should carefully consider the applicable eligibility requirements under Vietnamese law. At present, foreign individuals do not have a legal basis to acquire construction works or floor areas within construction works serving tourism and accommodation purposes [28]. By contrast, foreign-invested economic organizations may acquire such properties, but only for their own use in accordance with the approved tourism and accommodation purposes of the project [29].

Accordingly, careful legal due diligence should be undertaken before entering into transactions involving foreign purchasers in order to ensure compliance with applicable ownership restrictions.

5. Establish a transparent and integrated operational management framework

As key regulatory approvals relating to security, fire safety, environmental protection and technical infrastructure are generally granted for the project as a whole rather than for individual units, Developers should establish a unified management and operational framework from the outset of the project.

The respective rights and obligations of Investors and the project operator should also be clearly documented in both the contractual arrangements and the project’s operational regulations. A transparent governance structure will reduce the risk of conflicts between Investors’ expectations of operational autonomy and the need to maintain consistent management standards across the entire development.

6. Clearly disclose land tenure and ownership information

Finally, Developers should ensure that all marketing materials accurately and transparently disclose the legal status of the project, including: the applicable land use regime (commercial and service land); the remaining land use term; and the nature of the Certificate that purchasers will be entitled to obtain upon completion of the transaction.

Providing clear and accurate information from the outset will help avoid unrealistic expectations that tourism real estate offers ownership rights equivalent to residential property, thereby reducing the risk of future disputes and reinforcing investor confidence.

1. Law on Real Estate Business No. 29/2023/QH15 dated 28 November 2023 (“Law on Real Estate Business 2023”).
2. Land Law No. 31/2024/QH15 dated 18 January 2024 (“Land Law 2024”).
3. Law on Tourism No. 09/2017/QH14 dated 19 June 2017 (“Law on Tourism 2017”), Article 3.1.
4. Law on Tourism 2017, Article 48.
5. For a more detailed classification of these types of tourist accommodation establishments, see Article 21 of Decree No. 168/2017/ND-CP dated 31 December 2017 guiding the implementation of certain provisions of the Law on Tourism, as amended and supplemented by Decree No. 142/2018/ND-CP dated 9 October 2018 (collectively, “Decree 168”).
6. Directive No. 11/CT-TTg dated 23 April 2019 on solutions to promote the stable and sustainable development of the real estate market, Article 1(b).
7. Land Law 2024, Article 120.
8. Land Law 2024, Article 172.1(c).
9. Land Law 2024, Article 172.2.
10. Land Law 2024, Article 172.3.
11. Decree No. 102/2024/ND-CP dated 30 July 2024 detailing the implementation of certain provisions of the Land Law, as amended by Decree No. 49/2026/ND-CP dated 31 January 2026, Article 64.1(c).
12. Law on Real Estate Business 2023, Article 5.2.
13. Law on Real Estate Business 2023, Article 5.3.
14. Law on Real Estate Business 2023, Article 13.2.
15. Law on Real Estate Business 2023, Article 19.1(d).
16. Law on Real Estate Business 2023, Articles 44.1(d) and 45.2.
17. Decree No. 96/2024/ND-CP dated 24 July 2024 detailing the implementation of certain provisions of the Law on Real Estate Business, as amended by Decree No. 54/2026/ND-CP dated 9 February 2026 (“Decree 96”), Appendix III.
18. Decree 96, Article 12.3(a).
19. Decree 96, Article 12.3(c).
20. Decree 96, Article 12.3(d).
21. Regarding the detailed issues relating to the Condotel Sale and Purchase Agreement, which are relatively lengthy and complex, readers are kindly invited to follow our next article, in which we will share a more detailed analysis of this matter.
22. Law on Real Estate Business 2023, Article 49.1.
23. Condotel Sale and Purchase Agreement, Article 10; Resort Villa Sale and Purchase Agreement, Article 7.
24. Condotel Sale and Purchase Agreement, Article 15.1; Resort Villa Sale and Purchase Agreement, Article 14.1.
25. Regulation on the management and operation of condotel and resort villas issued together with Decision No. 3720/QD-BVHTTDL of the Ministry of Culture, Sports and Tourism dated 28 October 2019 (“Decision 3720”), Article 4.1.
26. Law on Tourism 2017, Article 49.1.
27. Decision 3720, Article 4.2.
28. Law on Real Estate Business 2023, Article 15.4.
29. Law on Real Estate Business 2023, Article 15.3.