Besides non-agricultural land, agricultural land in Vietnam accounts for a relatively large part, including production forest land. Currently, the production forest area is large and brings economic benefits to the people and the state. Production forest land is allocated by the State to land users with or without land use levy and is granted a certificate of land use right if eligible. So about the matter “Can production forest land mortgage with bank loans in Vietnam?“ Let’s find out with LSX in the article below.
Legal grounds
- Civil Code 2015
- Land Law 2013
- Decree 102/2017/ND-CP
What is production forest land?
Production forest land is land used mainly for agricultural, forestry or aquaculture production purposes. Production forest land belongs to the type of agricultural land specified in Point c, Clause 1, Article 10 of the 2013 Land Law. Production forest land belongs to the group of agricultural land, so it is necessary to comply with the regulations on the use of this type of land.
Currently, production forests are classified into two types as follows:
• Production forests are natural forests including: Natural forests and forests restored by zoning and promoting natural regeneration
• Production forests are planted forests, including: Forests planted with state budget capital, forests planted with self-invested forest owners’ capital.
– For production forest land which is a natural forest, the regulations are as follows:
In Clause 2, Article 54 of the 2013 Land Law:
“Article 54. Land allocation without land use levy
The State allocates land without collecting land use levy in the following cases:
2. Users of protection forest land, special-use forest land, production forest land being natural forests, land for building offices of agencies, land used for defense and security purposes; land used for public purposes not for business purposes; land for cemeteries or graveyards other than those specified in Clause 4, Article 55 of this Law;”
Accordingly, for production forest land which is a natural forest, the State will assign the right to use it and do not collect any money. In addition, Article 135 of the Land Law 2013 clearly states:
“1. The State allocates natural production forest land to forest management organizations for forest management, protection and development.
2. The State allocates or leases land from planted production forests according to the following provisions:
a) Allocate land to households and individuals directly engaged in agricultural production according to the quotas specified at Point b, Clause 3, Article 129 of this Law for forestry production purposes. For areas of production forest land used by households or individuals in excess of the quota, they must be converted to land lease;
b) Leasing land to economic organizations, households, individuals, overseas Vietnamese, foreign-invested enterprises to implement investment projects on afforestation;
c) Economic organizations, households, individuals, overseas Vietnamese, foreign-invested enterprises that are allocated or leased land by the State for production forests according to the provisions of Points a and Point b of this Clause may use the unforested land for afforestation or perennial crops.
3. Economic organizations, overseas Vietnamese, foreign-invested enterprises using production forest land may combine landscape business, eco-environmental tourism under the forest canopy.
4. Land for production forests concentrated in places far from residential areas that cannot be directly assigned to households or individuals shall be assigned by the State to organizations to protect and develop forests in combination with agricultural production, forestry and aquaculture.”
Can production forest land mortgage with bank loans in Vietnam?
According to the Civil Code 2015, mortgage of property is when one party (hereinafter referred to as the mortgagor) uses property under his/her ownership to secure the performance of an obligation and does not hand over the property to the other party. (hereinafter referred to as the mortgagee). The mortgaged property is held by the mortgagor or the parties may agree to assign a third party to keep the mortgaged property.
Production forest land is real estate, so to know if production forest land can be mortgaged, we need to consider the regulations on mortgage with land use rights.
According to Point g, Clause 1, Article 179 of the 2013 Land Law, households and individuals using land in one of the following types of land are entitled to mortgage their land use rights at banks, other economic organizations or individuals, including including:
– Agricultural land allocated by the State within the limit;
– Land allocated by the State with land use levy;
– Land is leased with one-off payment for the entire lease period;
– Land recognized by the State with land use rights;
– Land received for conversion, transfer, donation, inheritance.
Thus, the state recognizes the right to use production forest land, so users of production forests have the right to mortgage if they meet the conditions for mortgage.
Pursuant to Article 135 of the Land Law 2013, production forest land can only be allocated to a maximum of 30 hectares per household. In cases of additional allocation, it will not exceed 25 hectares. The type of production forest land belonging to the land allocated from the state has a long and stable period.
Procedures for mortgaging production forest land for a bank loan
Confirm eligibility when borrowing capital
In addition to the land use right conditions, in order for the bank to approve the loan after the borrower registers the mortgage, the borrower must also meet the conditions mentioned in Article 7 of Circular 39/2016/TT-NHNN. Specifically, these conditions include:
• The borrower is an individual who is at least 18 years old, has full civil act capacity, or 15 years old – less than 18 years old and has not lost/restricted civil act capacity; if it is a legal person, it must have civil legal capacity.
• Borrowing for lawful purposes.
• The capital use plan must be feasible.
• Customers are required to have financial capacity to repay the bank’s borrowed debts.
Therefore, when borrowing capital in the form of mortgage of land use rights, both the property conditions and the borrower’s conditions must meet the bank’s conditions.
Documents carefully prepared to mortgage land at the bank
In Article 9 of Circular 39/2016/TT-NHNN, the loan application file is regulated, including documents proving that the borrower is eligible for a loan under the above conditions and other documents issued by the organization. instruction credit. Typically, borrowers need to prepare the following documents:
• Loan application form according to the form of each bank. Usually, this application will also include the content of the debt repayment plan.
• Borrower’s identity papers: Identity card/Citizen ID/passport valid; household registration book/temporary residence book/residence confirmation; marriage registration/certification of celibacy/divorce decision or judgment…
• Documents proving the borrower’s monthly income: Income certification with the employer’s signature, savings book, existing assets other than the mortgaged land use right…
• Papers related to land use rights used as collateral: Certificate of land use rights, handover minutes, apartment purchase and sale contract between the borrower and the investor…
• Documents proving the borrower’s purpose of using the loan (a home loan requires a house purchase contract, a car loan requires a car purchase and sale contract, a home repair loan requires a permit. build…).
• Other documents required by each bank.
Notarization of the contract of mortgage of land use rights
One of the very important things after the bank has approved the loan is to notarize the mortgage contract of land use rights at a notary practice organization.
The notarization requester submits a set of notarization request dossiers at a notarization practice organization.
Profile composition:
• Request for notarization of contracts and documents (Form No. 01/PYC);
• Copy of Identity Card or Passport; copy of documents proving the authority of the representative (if the representative);
• A copy of the certificate of land use rights and properties attached to the land
• Mortgage contract (in case of self-drafting).
• In addition to the above documents, depending on the specific case, the notarization request dossier also contains the following additional documents: A copy of the construction permit or investment project approved by a competent state agency Approval for mortgage of property formed in the future which, according to the provisions of law, must be licensed for construction or must have an investment project.
• Copies of other documents related to contracts and transactions that are required by law. The copy mentioned above is a photocopies, prints, typed copies or computer-typed copies but must have full and exact content like the originals and must not be authenticated. When submitting a copy, the original must be presented for comparison.
How to do it: Submit a dossier at a notary practice organization
The notary public receives the application and checks the documents in the notarization request. If the application for notarization is complete and in accordance with the provisions of law, it shall be accepted and recorded in the notarization book.
– In case there are grounds to believe that there are unclear issues in the notarization request dossier, the conclusion of a contract shows signs of threat or coercion, there is doubt about the civil act capacity of the person who is notarized requesting notarization or suspecting that the subject matter of the contract is not real, the notary shall request the notarization requester to clarify or at the request of the notarization requester, the notary shall conduct verification or request inspection; In case of failure to clarify, it has the right to refuse notarization.
– In case the content and intention to enter into a contract is authentic, does not violate the law, and is not contrary to social ethics, the notary shall draft the contract;
– In case the contract is pre-drafted, the notary shall check the draft contract; If in the draft contract there are provisions that violate the law, are contrary to social ethics, or the subject matter of the contract is not consistent with reality, the notary must clearly indicate it to the notarization requester for correction. In case the person requesting notarization
Register to mortgage production forest land for a bank loan
Article 188 of the 2013 Land Law stipulates that the mortgage of land use rights must be registered at the land registration office and takes effect from the time of registration in the cadastral book.
When eligible to mortgage production forest land, land users can mortgage according to the following steps:
Dossier for registration of mortgage of production forest land use rights
According to Article 39 of Decree 102/2017/ND-CP, the applicant for mortgage registration submits 01 set of documents, including the following documents:
– Registration request form, made according to Form No. 01/DKTC (01 original).
– Notarized or authenticated mortgage contract or mortgage contract in cases prescribed by law (01 original or 01 certified true copy).
– Original Certificate.
– A notarized or authenticated written agreement between the land user and the owner of the property on land on the creation of the property on land in case of mortgage of the property on land that the user The land user is not concurrently the owner of the property on land (01 original or 01 certified true copy or 01 uncertified copy enclosed with the original for comparison).
Order and procedures for registration of mortgage of production forest land
Land users mortgage production forest land for bank loans according to the following procedures:
Land users prepare 1 set of documents as prescribed above to submit to the competent authority. The place to submit the application is the Land Registration Office
Pursuant to Article 48 of Decree 102/2017/ND-CP, within the time limit for settlement, the Land Registration Office performs the following tasks:
– Record mortgage registration contents in the Cadastral Book and Certificate.
– After recording in the Cadastral Book and Certificate, certify the registration contents on the registration request form.
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Please see more
- Vietnamese law on mortgage of land use rights
- Change of land use purpose in Vietnam to implement investment projects
- The issuance of a land use right certificate in Vietnam is refused
Frequently asked questions
Clause 8, Article 320 of the Civil Code 2015 stipulates the obligations of the Mortgagor as follows:
“8. The mortgaged property may not be sold, replaced, exchanged or donated, except for the cases specified in Clauses 4 and 5, Article 321 of this Code.
In which, Clause 5, Article 321 of the Civil Code on the rights of the mortgagor provides as follows:
To be sold, exchanged or given as a gift to the mortgaged property which is not a circulating commodity in the process of production or business, if so agreed by the mortgagee or as prescribed by law.
Thus, when you are mortgaging the land use right to the Bank, without the consent of the Mortgagor (the Bank), you cannot perform the land use right transfer.
The current fee for registration of security interest is: 80,000 VND/dossier
Objects of exemption or collection of fees: poor households, elderly people, people with disabilities, people with meritorious services to the revolution; Individuals and households, when registering secured transactions to borrow capital at credit institutions for production and business, comply with the provisions of Clause 1, Article 4 of Decree No. 116/2018/ND-CP amending and supplementing a number of articles of Decree 55/2015/ND-CP on credit policies for agricultural and rural development.
Pursuant to the 2013 Land Law and Clause 1, Article 188 of the 2013 Land Law, a land user may mortgage land use rights when meeting the following conditions:
The certificate of land use right must meet the requirements.
Land without dispute
– To ensure the enforcement of the judgment, the land use right must not be distrained
Land is still in use
For plains, the area must not exceed 150 ha
For midland and mountainous areas, the area must not exceed 300 ha
Accordingly, it is possible to mortgage production forests but must meet the above conditions to be able to do this.
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