Registering collectively owned land in Myanmar - The Fine Print, Legal & Tax insight

Investors and builders here and abroad are hoping to see the condominium bill publicised on November 10 come into law soon. Along with the Myanmar Foreign Investment Law, the Myanmar Condominium Law provides valuable first-hand information for investors, most of whom have been waiting for the law to pass before developing real estate here. At the same time, the bill raises many important issues and presents some challenges in its current draft state.

The bill covers the towns and areas within the boundaries of the development committees of Nay Pyi Taw, Yangon and Mandalay, and specified towns and regions. According to the draft, foreigners will be eligible to own up to 40 percent of the apartments in a condominium, so long as they are six storeys up or higher. Condominiums will also be able to serve as collateral when taking out loans from the bank.

All collectively owned land is to be registered, and the Ministry of Construction will issue rules and require notification on the minimum numbers of storeys, apartment rooms and the planned materials to be used by the collective owners.

Section 7 of the draft explains the process. The project has to conform to government provisions for urban planning, and areas less than one acre require special ministry approval. According to this provision, the developer can build on registered, collectively owned land only.

Confusion arises, however, with the issue of changing the title. The land is to be changed from privately owned to collectively owned before construction begins. The transferer is the legal owner of the land, but who is the transferee? In fact, the apartments’ owners are; but since the developer cannot know who the future owners of the apartments will be at this stage, more clarity is needed about how to transfer the land title and register land as collectively owned.

The difference between a condominium and an apartment is a purely legal one, as it’s impossible to know a condo from an apartment simply by looking at it or visiting the building. What defines a condominium is the form of ownership.

Legally, a condominium means an apartment, house, office building, or other multiple unit complex, units of which are individually owned with each owner receiving a deed of the unit purchased. Ownership includes the right to sell or mortgage that unit as well as share in joint ownership of any common passageways or facilities.

All in all, we welcome this draft condominium law. It’s a key ingredient in the drive to a more modernised, developed state. It will help bring more convenient living to the people and will support the development of the business sector and increase foreign investment in real estate.

Wint Thandar Oo is Partner of Polastri Wint & Partners and U Tin Sein is senior associate.

source: The Myanmar Times

http://www.mmtimes.com/index.php/business/8870-registering-collectively-owned-land-in-myanmar-the-fine-print-legal-tax-insight.html