Foreign investors will be able to buy condominium units in build-operate-transfer (BOT) projects on ministry-owned land if the ministry is willing to register the project, officials said yesterday.
The Condominium Law passed last month opens the real estate market to foreign buyers for the first time, but makes no mention of BOT developments. This has led to some confusion and concern that these projects – while accounting for a large portion of the condominium market – will not be eligible as such under the new law.
BOT projects will qualify as condominiums if they meet the other terms of the Condominium Law, U Saw Hla Tun, secretary of the Pyidaungsu Hluttaw’s Joint Bill Committee, told The Myanmar Times.
“Although BOT projects are not specifically mentioned in the law, they will qualify if the ministries register them,” he said. “The ministries have authority. If they want a condominium on their land they can register it to the committee and it will be covered under the law.”
When the government moved to Nay Pyi Taw, a number of ministries rented out their vacated land in Yangon to private developers under long-term leases. Many high profile residential projects in Yangon are built on ministry-owned land, under 50-year terms with two 10-year extensions. “We drafted the law after discussions with contractors,” said U Saw Hla Tun. “We didn’t mention BOT projects in the law because the ministries have authority over their own land.”
Developers of projects that classify as condominiums under the new law can sell up to 40 percent of units on the sixth floor and above to international buyers. This is expected to significantly help the market, as local demand has all but dried up.
The Ministry of Construction is drafting rules to provide clarity and guidance on the new law, said U Saw Hla Tun.
Foreign developers working on BOT projects said they hoped a clause covering such developments will be added to the new law for the sake of contractors and apartment owners.
“It’s great the government has passed the condominium law, but it should also clarify whether it covers the BOT system because many of the condominiums in Yangon are being built under these terms,” said Golden City managing director Jeffrey Lu.
Under the law, even developers who own their land must secure a permit from the Ministry of Construction, local authorities and the Myanmar Investment Commission, to confirm their projects are classified as condominiums, before they can start selling to foreign buyers.
Condominiums built before the law was passed and those already under construction can be registered with a new special-purpose committee, U Saw Hla Tun said.
Source: Myanmar Times
