Mortgage of land use rights is one of the basic rights of land users. To be able to mortgage land use rights will need to meet the conditions of land law. When mortgaging land use rights, the parties must sign a mortgage contract. In the article below, Lawyer X will share with you a sample of the Contract of mortgage of land use rights in Vietnam and relevant laws. Hope this article brings a lot of useful things to you.
Legal grounds
Land Law 2013
Civil Code 2015
Decree 102/2017/ND-CP
The concept of the contract of mortgage of land use rights
A land use right mortgage contract is an agreement between parties whereby the land user (the mortgagee) uses his/her land use right to secure the performance of a civil obligation to the other party (the Mortgage). The mortgagor may continue to use the land during the mortgage term.
Land users have the right to mortgage land use rights, creating a legal and practical basis for banks and credit institutions as well as other lenders to perform their functions and protect their interests.
Mortgage of land use rights is understood as the land user using his/her land use right to secure the performance of a civil obligation because the land use right is only handled to secure the performance of the obligation when the mortgagor land use rights fail to perform or improperly perform their obligations in a contractual relationship.
Features of mortgage of land use rights
Objects of mortgage of use rights: the mortgaged property is not land but the right to use land. Because according to the provisions of law, land belongs to the entire people, represented by the State. Therefore, when mortgaging land use rights, the mortgagor only has the right to use it, but not the right to own it.
In the relationship of mortgage of land use rights, the mortgagor may continue to exploit the utility, enjoy the yields and profits from the land.
Mortgage of land use rights must follow certain order and procedures. According to Article 3 of Decree 102/2017/ND-CP, the mortgage of land use rights must be made in writing, notarized and registered in accordance with the law on secured transactions.
Mortgage of land use rights is a measure of object security. As a rule, the mortgagee can dispose of the collateral to recover its loan, in the event that the mortgagor defaults on its repayment obligation.
What types of land are mortgaged with?
According to Point g, Clause 1, Article 179 of the 2013 Land Law, households and individuals using land in one of the following land types may mortgage their land use rights at banks, other economic organizations or individuals:
Agricultural land allocated by the State within the limit;
Land allocated by the State with collection of land use levy;
Land is leased with one-time payment for the entire lease period;
Land recognized by the State with land use rights;
Land received for conversion, transfer, donation, inheritance.
Conditions for mortgage of land use rights
According to Clause 1, Article 188 of the 2013 Land Law, a land user may exercise the mortgage right when fully meeting the following conditions:
Have a certificate of land use right;
Undisputed land;
The land use right is not distrained to secure judgment enforcement;
During the land use period.
In addition, the mortgage of land use rights must be registered at the land registry office and takes effect from the time of registration in the cadastral book.
Contents of the contract of mortgage of land use rights
The contract for mortgage of land use rights can be prepared by the parties themselves, but it is necessary to ensure that there are basic contents as follows:
Information of the mortgagors, including: Full name, year of birth, ID card/citizen identity card, address, phone number…;
Information about the mortgaged land plot: Number of land plots, number of map sheets, address of land plot, type of land, form of use…
Mortgage term: As agreed by the parties or until the termination of the obligation secured by the mortgage;
Rights and obligations of the parties;
Mortgage registration and payment of fees: clearly specifying the responsibility to pay fees and charges;
Disposal of collateral: The method of disposing of the collateral, and to whom in what order the proceeds from the disposal of the collateral will be paid;
Validity and termination of the contract;
Dispute resolution;
Terms of confidentiality, force majeure;
Other agreements in accordance with the law.
Rights and obligations of the parties in a land use right mortgage contract
Rights and obligations of the mortgagor
Rights of the mortgagor of the land use right
To use the land for the term of the mortgage (this is different from a normal property mortgage).
To receive loans by mortgaging land use rights according to the agreed method;
To enjoy the yield and income obtained, except for the case where the yield and income are also mortgaged.
To exchange, transfer, lease or sub-lease the mortgaged land use rights with the consent of the mortgagee;
Get back the land use right certificate after fulfilling the mortgage obligation.
Obligations of the mortgagee of land use rights
Hand over the land use right certificate to the mortgagee.
Procedures for registration of mortgage; delete the mortgage registration when the mortgage contract terminates;
Use the land for the right purposes, without damaging or reducing the value of the mortgaged land;
Pay the loan on time and by the right method as agreed in the contract.
Rights and obligations of the mortgagee
Mortgage party’s rights
Inspect and remind the mortgagee of the land use right to protect and preserve the land and use the land for the right purposes;
Priority is given to debt payment in case of handling mortgaged land use rights.
Obligations of the mortgagee:
Together with the mortgagor, register the mortgage;
Return the certificate of land use right when the mortgagor has performed the obligation to secure the mortgage.
When the performance of the obligation secured by the mortgage of the land use rights is due but the mortgagor fails to perform or improperly performs the obligation, the mortgaged land use right shall be handled as agreed; if there is no agreement or it cannot be handled according to the agreement, the mortgagee has the right to initiate a lawsuit in court.
When does the mortgage contract take effect?
- A property mortgage contract takes effect from the time it is signed, unless otherwise agreed upon or otherwise provided by law.
- The property mortgage becomes effective against a third party from the time of registration.
The effective time of a mortgage contract is from the time of signing, unless otherwise agreed by the parties or otherwise provided for by law. In some specialized legal documents, there is a provision that the effective time of a mortgage contract is not the time of signing but another time, which must comply with the provisions of the law. For example, the Law on Housing 2014 in Clause 1, Article 122 stipulates: The house mortgage contract must be notarized and authenticated. The effective time of a house mortgage contract is from the time of notarization or authentication.
The time when the mortgage contract becomes effective against a third party is the time when the mortgage contract is registered at a competent state agency such as the registration of security transactions. The mortgagee must note that after the parties agree on the effective mortgage contract against a third party, the parties must register the mortgage at a competent state agency, although the law This transaction may not be required to be registered at a competent state agency.
A property mortgage contract has legal effect when it ensures the valid conditions of a civil transaction specified in Articles 117 of the Civil Code 2015 and does not fall under the cases where the civil transaction is invalid. from Article 122 to Article 129 of this Code.
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Frequently asked questions
About the subject of the contract of mortgage of land use rights. These are the mortgagor and the mortgagee. Mortgage of land use rights means individuals and households that are allocated or leased land by the State with a lawful land use right certificate, and wish to borrow capital for themselves or for a third party. mortgage of land use rights to secure the performance of such loan obligations. The mortgagee can be banks and other credit institutions.
According to Clause 12, Article 9 of Circular 24/2014/TT-BTNMT, the Land use right mortgage contract must be notarized and authenticated. Dossier submitted when applying for mortgage registration and deregistration of mortgages shall comply with regulations on registration of secured transactions.
Conclusion: So the above is Contract of mortgage of land use rights in Vietnam. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
