LEGAL INSIGHT – SCANDAL AT THE GRAND SUNLAKE PROJECT

The legal scandal surrounding the Grand Sunlake project has become one of the most notable cases in Hanoi. Located in the heart of Hà Đông District and once promoted as a modern commercial–office–residential complex, the project is now embroiled in serious disputes among Thang Long Housing and Urban Development Group Joint Stock Company (“Thang Long Company”), An Phu Gia Holdings Joint Stock Company (“An Phu Gia Company”), and hundreds of customers who signed contracts to receive transferred apartments.

On 1 November 2022, the two companies executed Memorandum of Agreement No. 135/BB-TLVN, establishing a comprehensive cooperation for the development of the Hesco project. Under this memorandum, Thang Long Company agreed to transfer to An Phu Gia Company 380 apartments in Building S1 (Tower D – 45 floors) through lease and lease–purchase arrangements.

The legal structure of these 380 apartments includes:
• 84 apartments designated as long-term residential units;
• 296 apartments designated as rental housing units – not long-term ownership apartments and not eligible for sale under the laws on housing and real estate business.

However, most of these units were subsequently transferred to customers under contracts titled “Assignment of Lease–Purchase Contract.” This created a serious misunderstanding, as many purchasers believed they were acquiring ownership rights or rights to purchase future-formed apartments, while in fact these units were legally classified as rental apartments, not commercial units eligible for sale.

The method of contracting and marketing through “assignment of lease–purchase contracts” presents signs of misleading customers regarding the legal status of the apartments and the rights they would receive.

The legal indicators of deceptive conduct are reflected in the following aspects:

(1) Under the Civil Code 2015

Article 127 provides that a civil transaction is invalid if a party is deceived regarding the contents of the transaction. Buyers were misinformed about the type of housing, its intended use, and the rights attached to the apartments.

(2) Under the Law on Protection of Consumer Rights 2023

Businesses are prohibited from providing inaccurate information, causing confusion, or concealing the truth about the characteristics, quality, or legal status of products. Failure to disclose that the apartments were “rental housing” directly violates the prohibited acts set out in this law.

(3) Under the Law on Real Estate Business 2014

Only apartments that meet statutory legal conditions may be sold. Rental housing units are not permitted to be sold under any form. Using lease or lease–purchase contracts as a mechanism to mobilize capital while effectively selling apartments shows signs of violating real estate business conditions.

(4) Under the Penal Code 2015 (amended 2017)

If intent to appropriate assets or obtain illicit gain can be demonstrated, providing false information about the apartments may constitute the offence of “Fraudulent Appropriation of Property” or “Abuse of Trust to Appropriate Property.”

Overall, the Grand Sunlake case reveals a complex transactional scheme in which the legal structure of the real estate product was not fully or transparently disclosed to customers. The use of lease and lease–purchase contracts while marketing the units as if they were for sale led to significant conflicts of interest and triggered widespread disputes between the companies and hundreds of purchasers who had made legitimate payments.