Purchasing real estate—whether a home or a parcel of land—is among the most significant financial decisions in a person’s life. Yet, countless buyers have fallen victim to deceptive contracts laden with hidden pitfalls, resulting in substantial financial losses. Sellers and brokers frequently entice buyers with grandiose promises: "prime location, transparent legal status, high investment potential, and an unbeatable price." Such marketing tactics often lure unsuspecting investors into deals that seem too good to pass up. However, upon visiting the site, many buyers are shocked to discover that their so-called "golden investment" is nothing more than an overgrown field—either trapped in a long-term planning zone or entirely unfit for construction. This scenario presents a pressing legal question: What risks do buyers face when acquiring land that is subject to urban planning restrictions?

1. What Is Planned Land?

Planned land refers to parcels that have been designated for specific future use under a government-approved land use plan or development project. These designations outline intended purposes such as infrastructure development, residential zones, industrial parks, or other urban and rural planning initiatives.

Under Article 76 of Vietnam’s 2024 Land Law, planned land remains legally transferable. When notarizing a land transfer contract, notary offices continue to authenticate the transaction. However, despite its transferability, many buyers later discover that the land they purchased is subject to severe restrictions—rendering it either non-buildable or significantly limited in construction density due to its planned status.

2. How to Determine If a Land Parcel Is Under Planning?

Under Point b, Clause 3, Article 9 of Circular 34/2014/TT-BTNMT, information regarding land use planning, once approved by competent state authorities, is publicly accessible. Prospective buyers can verify a land parcel’s planning status through several methods:

(i) Checking in person at local government offices – Buyers can visit the People’s Committee of the commune or district where the land is located to request official planning information. Land administration officers can provide details about the land’s designated use, duration of use, boundaries, and any restrictions on development.

(ii) Accessing provincial government portals – Most provinces and cities now maintain electronic portals that publish land use plans. Buyers can visit the provincial People’s Committee website to review planning details for a specific parcel.

(iii) Using dedicated land planning websites – Several online platforms aggregate and provide regional land planning data, allowing users to search for information remotely.

(iv) Consulting a local notary office – Notary offices handling land transactions may also have insights into planning restrictions or other legal encumbrances.

Beyond the buyer’s due diligence, sellers have a legal obligation to disclose any known planning restrictions on the land. Under Clause 1, Article 39 of the 2020 Real Estate Business Law, sellers must provide accurate, complete information regarding land use rights and bear responsibility for the veracity of that disclosure.

Despite the inherent legal risks, planned land remains attractive to certain investors due to its lower price and long-term potential for industrial development, warehouse leasing, or future project implementation.

3. Key Contractual Safeguards to Protect Land Buyers

To protect buyers from potential legal and financial pitfalls, a land transfer contract should include explicit provisions requiring the seller to disclose all relevant information. Specifically, the contract should: I. Mandate full disclosure by the seller – The seller must provide complete and accurate details regarding land ownership, legal status, and any documentation related to land use planning. This ensures transparency and prevents misleading transactions.

II. Obligate the buyer to verify information – While the seller has a duty to disclose, the buyer should independently confirm the land’s planning status through official channels to avoid reliance on incomplete or inaccurate representations.

III. Establish risk resolution mechanisms – The contract should clearly outline remedies if the land is later found to be subject to planning restrictions. This includes:  Liability for non-disclosure – If the seller knowingly withholds or misrepresents critical information, they should bear responsibility for any resulting losses.  Unforeseen regulatory changes – If planning restrictions emerge that neither party was aware of at the time of sale, the contract should specify how the risk is allocated, whether through compensation, contract termination, or other remedies. By incorporating these safeguards, buyers can better protect their interests and minimize the legal risks associated with purchasing planned land.

4. Expert Advice: Mitigating Risks in Land Transactions

Disputes arising from purchasing land subject to planning restrictions can lead to prolonged legal battles, financial losses, and wasted time and effort—a situation no buyer wants to face. To minimize risks, prospective buyers should: • Conduct thorough due diligence – Before signing a land transfer contract, buyers must equip themselves with the necessary legal knowledge and scrutinize every contractual clause, especially those that may conceal hidden risks. • Remain vigilant against “trap” provisions – Certain contract terms may impose unfavorable obligations or limit the buyer’s rights, making it essential to review all conditions carefully. • Seek professional legal counsel – If any doubts or uncertainties arise, consulting a real estate lawyer or legal expert is strongly recommended to ensure informed decision-making and protect against unforeseen legal complications. By taking these proactive measures, buyers can safeguard their interests and avoid costly legal disputes.