Hello LSX. I need some big capital to do business, so I took the land use right certificate to mortgage at the bank. I want to lease this land to my friend to grow crops, but I don’t know if the law allows it. So about the matter “Mortgaged land recovery under Vietnam law” Let’s find out with LSX in the article below.
Legal grounds
- Land Law 2013
- Civil Code 2015
- Decree 01/2017/ND-CP
If the land is being distrained or mortgaged, will the certificate of land use rights be revoked?
According to the provisions of Clause 2, Article 106 of the Land Law 2013, cases in which the State revokes the issued Certificates, specifically as follows:
“1. The certificate-granting agency is responsible for correcting errors in the issued Certificate in the following cases:
a) There is an error in information about the name, legal person paper or personal identity, address of the land user, owner of property on land compared to the legal person’s papers or personal identity at the time of issuance of the Certificate. the person’s certification;
b) There is an error in information about the land parcel and land-attached assets compared with the land registration dossiers and land-attached assets which have been verified and verified by the land registration agency.
2. The State shall revoke the granted Certificate in the following cases:
a) The State recovers the entire land area on the issued Certificate;
b) Issuance and replacement of the issued Certificate;
c) Land users, owners of land-attached assets register changes in land and land-attached assets and must issue new certificates of land use rights and ownership of houses and other assets. attached to the land;
d) The certificate has not been issued according to the authority, wrong land users, wrong land area, ineligible for grant, improper land use purpose or land use term or origin of land use. to use land in accordance with the land law, except where the certificate holder has transferred the land use rights and ownership of land-attached assets in accordance with the land law.
3. The revocation of the issued Certificate, for the case specified at Point d, Clause 2 of this Article, by the agency competent to issue the Certificate of land use rights and ownership of houses and other assets attached to the land specified in Article 105 of this Law shall decide after having obtained the conclusion of the same-level inspection agency and the effective document of the competent state agency in charge of land dispute settlement.”
Accordingly, there are currently no regulations on the revocation of land use right certificates when the land is being distrained or mortgaged.
Can the land mortgaged at the bank be leased to others to grow crops?
According to Article 321 of the 2015 Civil Code, the rights of the mortgagor are as follows:
1. Exploiting the utility, enjoying the yields and profits from the mortgaged property, except where the yields and profits are also mortgaged as agreed.
2. Invest to increase the value of the collateral.
3. Receive back the mortgaged property held by a third party and papers related to the mortgaged property held by the mortgagee when the obligation secured by the mortgage terminates or is replaced by another security measure .
4. To be able to sell, replace or exchange the mortgaged property, if such property is a commodity circulated in the process of production and business. In this case, the right to demand payment from the buyer, the proceeds received, the property formed from the proceeds, the replaced or exchanged property becomes the collateral.
In case the mortgaged property is a warehouse, the mortgagor is entitled to replace the goods in the warehouse, but must ensure that the value of the goods in the warehouse is exactly as agreed.
5. To be sold, exchanged or given as a gift of the mortgaged property which is not a circulating commodity in the course of production or business, if so agreed by the mortgagee or as prescribed by law.
6. To be allowed to lease or lend the mortgaged property but must notify the lessee or the borrower that the leased or lent property is being used for mortgage and must notify the mortgagee.
According to the above provisions, land that is being mortgaged at a bank may be leased to others but must notify the lessee of the land being used for mortgage and must notify the bank.
Mortgaged land recovery under Vietnam law
If the land is mortgaged but is recovered by the State, the land use right will be handled according to Article 43a of Decree 43/2014/ND-CP, supplemented by Clause 28, Article 2 of Decree 01/2017/ND-CP. , as follows:
• Land being mortgaged that the State recovers for the purpose of national defense and security or for the purpose of socio-economic development, for the public benefit: the contract of mortgage with land use rights is terminated. The handling of rights and obligations related to land use rights between the parties to the mortgage contract shall comply with the civil law.
• The land is mortgaged but the State recovers the land due to a violation of the law: The land use right mortgage contract is terminated; The mortgagor must repay the loan to the mortgagee according to the provisions of civil law and other relevant laws.
• Land mortgaged by the land user being an individual, but that individual dies but has no heir, the State will recover the land, the State is responsible for settling the rights and obligations related to the land parcel according to regulations of law; The mortgage contract is terminated and the land use right is handled in accordance with the law on security transactions.
Accordingly, even if the land use right is revoked by the State for any reason, the contract of mortgage of land use rights will still be terminated. According to Article 6 of Joint Circular No. 16/2014/TTLT-BTP-BTNMT-NHNN, the disposal of mortgaged property is the right to use land and property on land in case the mortgage contract has been registered before the revocation by a competent state agency is prescribed as follows:
• The organization in charge of compensation is responsible for notifying in writing of the amount of compensation, time and place of payment of compensation to the mortgagee and the mortgagor on the basis of the contents of the mortgage registration provided by the Land Use Right Registration Office.
• Where the mortgagor and the mortgagee have an agreement on whether the mortgagee will receive the compensation amount when the State recovers the land or other benefits related to the mortgaged property during the contract period valid mortgage:
+ The organization in charge of compensation is responsible for paying compensation to the mortgagee in accordance with the provisions of the land law and the provisions of the law on security transactions.
+ If the amount of compensation is greater than the value of the payment obligation, the organization in charge of compensation shall pay the remaining amount to the mortgagor; if the amount of compensation is not enough to pay the value of the mortgagor’s obligation, the mortgagor is responsible for returning the outstanding amount to the mortgagee, unless the mortgagor is not concurrently the obligor. guaranteed service or otherwise agreed by the parties.
• In case the mortgagor and the mortgagee do not agree on whether the mortgagee will receive the compensation amount when the State recovers the land or other benefits related to the mortgaged property during the contract period, valid mortgage:
+ The organization in charge of compensation shall only pay compensation to the mortgagee after obtaining the written consent of the mortgagor.
+ In case the mortgagor does not agree, the compensation organization shall transfer the compensation amount to the account set up by the indemnification organization at the bank and make payment after the judgment or decision is issued. legally effective dispute settlement decision of a competent state agency, unless otherwise agreed by the parties.
• In case the land use rights and land-attached assets are used to secure the performance of many obligations at many different secured parties, based on information on the contents of mortgage registration issued by the Registration Office the land use rights provided, the organization in charge of compensation shall pay compensation to the jointly secured parties in the order of priority for payment corresponding to the value of the secured obligation in accordance with the provisions of this Law. Social legal.
• In case the mortgagor is compensated with resettlement houses or residential land:
Houses and residential land for resettlement may be used to replace mortgaged assets recovered by the State, unless otherwise agreed by the parties.
In case the security property is handled but the value of such house or residential land is not enough to pay the value of the obligation, the mortgagor must pay the outstanding amount to the mortgagee if the mortgagor agrees. the time being the secured obligor or the secured obligee must pay the outstanding amount to the mortgagee if the mortgagor is not concurrently the secured obligee, unless the parties have other agreement.
In case the value of such house or residential land for resettlement is greater than the value of the mortgagor’s obligation, the mortgagee must pay the difference to the mortgagor.
Thus, depending on each case, the payment of compensation for land that is mortgaged but recovered by the State will be different
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Please see more
- Legal regulations on land use term in Vietnam
- Conditions for the exercise of rights of land users under Vietnam Law
- Agricultural land use regime according to Vietnam land law
Frequently asked questions
According to Article 16 of the 2013 Land Law, it is stipulated as follows:
Article 16. The State decides on land recovery and requisition
1. The State shall decide to recover land in the following cases:
a) Recovery of land for national defense and security purposes; socio-economic development for national and public interests;
b) Land recovery due to violations of the law on land;
c) Land recovery due to termination of land use according to law, voluntary return of land, risk of endangering human life.
2. The State shall decide to requisition land in cases where it is absolutely necessary to perform national defense and security tasks or in a state of war, emergency, natural disaster prevention and control.
Pursuant to Article 69 of the 2013 Land Law, the order and procedures for land recovery are as follows:
Phase 1: Develop and implement a plan for land acquisition, investigation, survey, measurement and tally.
Stage 2: Formulation and appraisal of compensation, support and resettlement plans.
Stage 3: Decide on land acquisition, approve and organize the implementation of compensation, support and resettlement plans.
Stage 4: The organization in charge of compensation and site clearance is responsible for managing the cleared land.
The authority to recover land will belong to the following subjects:
– Provincial-level People’s Committees shall decide to recover land in the following cases:
+ Recovery of land from organizations, religious establishments, overseas Vietnamese, foreign organizations with diplomatic functions, foreign-invested enterprises, except for the case specified at Point b. Clause 2, Article 66 of the 2013 Land Law;
+ To recover agricultural land belonging to the public land fund of communes, wards and townships.
– District-level People’s Committees shall decide to recover land in the following cases:
+ Recovery of land from households, individuals and communities;
+ Recovering residential land of overseas Vietnamese who are entitled to own houses in Vietnam.
Conclusion: So the above is Mortgaged land recovery under Vietnam law. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
