The scenario: a distributor advertises a “phantom project”
Many homebuyers have fallen for glossy advertising from distribution platforms: projects marketed with miraculous timelines, “100% clean” legal status, and non-existent amenities – only to discover after paying that the land use purpose was never converted and the project was never eligible for sale. When things unravel, distributors often deflect: “we only posted the information on behalf of the developer.” Does this argument hold up in law?
It does not. Current law imposes an independent liability on real estate trading floors – they cannot shift all blame to the developer.
False advertising: a prohibited act
Article 8 of the Advertising Law 16/2012/QH13 (amended by Law 75/2025/QH15, effective from 01/01/2026) prohibits advertising that is inaccurate or misleading about business capability, quantity, quality, price, use, design, origin, or warranty period of products, goods, or services. Advertising a real estate project with fabricated timelines, legal status, or amenities falls squarely within this prohibition.
Supporting the Advertising Law, Decree 342/2025/ND-CP (effective 15/02/2026, replacing Decrees 181/2013 and 70/2021) provides in Article 18 for blocking and removing violating online advertisements: no later than 24 hours from a competent authority request.
The distributor independent liability: Article 58 of the Real Estate Business Law
The Real Estate Business Law 29/2023/QH15 (effective 01/8/2024) sets out the obligations of real estate trading floors in Article 58 – the undoing of the “we only posted information” defense:
- Article 58.1: ensure real estate listed on the floor satisfies the conditions for being put into business;
- Article 58.2: publicly post and provide complete and truthful dossiers and information on the real estate, and bear responsibility for information it provides;
- Article 58.6: compensate for damage caused by its own fault;
- Article 58.7: manage brokerage staff to comply with the law.
The floor may claim compensation from its client (the developer) for damage caused by the client fault (Article 57.4) – but this right cannot be used to evade liability toward buyers.
One more point: individual brokers must hold a real estate brokerage practicing certificate and may not operate independently (Articles 61-62). Uncertified freelance “cò” agents – ultimate liability rests with the managing enterprise.
Four layers of liability for false advertising
- Administrative fines: under Article 50(5) of Decree 87/2026/ND-CP (effective 15/5/2026 – the current sanctioning decree for culture and advertising), inaccurate or misleading advertising is fined VND 80-100 million for individuals; organizations are fined double. Additionally, Article 50(7) orders removal of the advertisements, mandatory public correction, and disgorgement of illegal gains;
- Civil compensation: harmed buyers may sue for damages under the Civil Code. Homebuyers are also consumers protected by the Consumer Protection Law 19/2023/QH13 (effective 01/7/2024): the right to accurate information, to complain, and to sue;
- Criminal prosecution: Article 197 of the Penal Code – the offense of fraudulent advertising – applies where serious consequences are caused or the offender was previously administratively sanctioned/convicted for the act and reoffends: warning, a fine of VND 10-100 million, or non-custodial reform up to 03 years; committed by an organized group: a fine of VND 50-200 million or 06 months to 03 years of imprisonment;
- The floor independent liability under the Real Estate Business Law as analyzed above.
Note on the sanctioning basis: one view cited a VND 60-80 million fine under Decree 38/2021 while flagging that its validity needed verification; cross-checking confirms Decree 87/2026/ND-CP (effective 15/5/2026) as the current sanctioning decree at VND 80-100 million – this article cites that basis. Decrees 181/2013 and 70/2021 are not cited as current authority.
Checklist for homebuyers
- Verify project legality: land use right certificate, construction permit, the Department of Construction written confirmation of eligibility for sale/lease-purchase;
- Cross-check advertising claims against the actual legal dossier – especially timelines, amenities, and handover dates;
- Sign contracts only when the project is eligible for business;
- Keep all advertising materials (flyers, posts, messages) as evidence in case of dispute.
Checklist for distribution platforms
- Build a legal-dossier vetting process before listing: only put eligible real estate on the floor (Article 58.1);
- Control advertising content: complete, truthful, and take responsibility for information provided (Article 58.2);
- Manage brokerage teams: ensure 100% hold practicing certificates; do not let freelance agents impersonate the brand (Articles 58.7, 61-62);
- Be ready to remove and correct within 24 hours upon competent authority request.
Disclaimer: This article is for general legal information only and does not constitute legal advice for any specific case. Laws and regulations may be amended; readers should consult a lawyer before acting. Reviewed by FLAW AI Legal Council.
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