Ho Chi Minh City (Saigon) tenants live in fear as condos transform into shops
19 November 2016

An apartment building full of businesses

Opening fashion boutiques, cafés, and restaurants in old apartment buildings may be a trendy more for an up-and-coming entrepreneur in Ho Chi Minh City [Saigon], but for residents neighboring these condo shops it is a terrifying prospect.

Though the trend already exists in Hanoi, the administration in the Vietnamese capital requested earlier this week that people stop transforming their apartments into non-residential spaces.

Looking to their counterparts in Hanoi, apartment tenants in Ho Chi Minh City are anticipating the local administration will soon enact a similar ban.

In the southern metropolis locals searching for clothing, dining, and even spa and sauna bathing, can frequent any of the dozens of deteriorating apartment buildings that have been transformed to serve the area’s shopping needs.

famous apartment-turned-business venues

One of the most famous apartment-turned-business venues in Saigon is the condo building at 42 Nguyen Hue Street flanking the popular walking street in the city’s downtown area.

Only 20 residential tenants still reside in the decades-old building, with most of the apartment units leased to shop and café owners.

Though consumers welcome the business, the growing number of clients frequenting these venues means nothing but nuisance for the ‘real’ apartment residents.

V.N., who rents an apartment on the fourth floor, voiced her annoyance with sharing the building’s only elevator with shop customers.

“There are times when I have to walk four floors to my unit because there is a crowd queuing for the lift,” she said.

For N., an apartment building should never be turned into “something like a supermarket.”

fire and security concerns

“Who will be responsible when there is a fire?” she questioned.

Another tenant, N.T.D., an eighth floor resident in the building, said she cannot stand the noise caused by customers in the eateries and cafés in the building.
“The shops do not close until 11:00 pm, and the building is extremely noisy on weekends,” she says.

D. also fears the security situation in the building.

“It used to be much easier to oversee the building when there were only residential tenants,” she said. “Now that there is always a sea of people coming and going, it is impossible to ensure security.”

At a condo building on nearby Ton That Thiep Street, the situation is no different. Residents here are concerned over the threat of fire, especially since the building already caught a blaze once this year.

Ban blasted
While the ban on running business inside apartment buildings in Hanoi is hugely supported by tenants in Ho Chi Minh City, business owners in the capital are not happy at all.

It is much cheaper to rent an apartment to open a shop than street-front premises, and not all shop-in-condo buildings are unsafe, they said.

A 40-square-meter apartment unit at 42 Nguyen Hue is available for rent at VND15 million (US$670) a month, while a storefront in the same area in District 1 fetches at least VND40 million ($1,786).

Tran Cong Bay, a fashion shop owner in an apartment in Hanoi, said it is unfair to get rid of the whole barrel just because of some bad apples. Bay said he is running his business from his own apartment unit and poses no threat to the whole building, as “most of the business is done via Internet and phone transaction.”

Other business owners suggest that authorities only force businesses with a high risk of fire and explosion to move from residential buildings.


HCMC begins forcing business offices out of condo buildings
The Saigon Times
By: Cao Ban
13 December 2016

Most condo units at the building at 42 Nguyen Hue Boulevard in HCMC’s District 1 are used for business purposes - Photo: Thanh Hoa

The Ho Chi Minh City (HCMC) Department of Planning and Investment has urged those businesses having offices in condo buildings in the city to move out within 15 days.

They will have to stop operation inside condo buildings and register for new office addresses. If they fail to do so, the department will coordinate with the Construction Department and district authorities to deal with them in accordance with law.

According to Government Decree 99/2015, which guides the implementation of the Housing Law, business offices are disallowed inside condo buildings. Those having business registration licenses and using apartments as transaction offices are required to move to other places within six months starting from December 10 last year, which means the June 10 deadline is over.

But many businesses are still operating in many condo buildings around the city. Data of the Department of Planning and Investment shows the city now has around 2,000 enterprises whose head offices are based in such residential buildings.

More than 30 condo units at 42 Nguyen Hue Boulevard in District 1 are used for doing business. Seven to eight households still live at this place while the rest have moved to other places and leased their homes to others, said Tran Quoc Thang, member of the condo’s management board.

“We cannot manage those doing business in these condo units. It is the right of the owners to lease their properties to anybody as wished. It is the responsibility of authorities to order those businesses to move out or stop operation,” he said.

A representative of a business at this condo said it is a difficult for enterprises to relocate their offices within 15 days. “It will take a lot of time looking for a new location with a reasonable rental. When relocating elsewhere, enterprises will have to inform banks, tax authorities, partners and customers of their new addresses.”

Cu Thanh Duc, deputy head of the business registration office at the Department of Planning and Investment, said many enterprises are using condo units as their offices as the business registration rules do not require them to declare where they are headquartered.

Lawyer Tran Duc Phuong, member of the HCMC Bar Association, said Decree 99 bans enterprises from using condos as business locations but the decree does not clearly define “business location.”

“The Enterprise Law describes a business location as a place where enterprises carry out specific business activities. In line with the law, Decree 99 only prohibits enterprises from using condo units as transaction locations, but not head, branch, or representative offices,” said Phuong.

However, authorities can still order enterprises operating in condo buildings to move out based on the regulation that specifies condos must be used for the right purpose, which is living.

The lawyer suggested authorities provide specific sanctions against those violating the rule, instead of simply banning.

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