Vietnam Law has regulations on order and procedures for property auction. Let’s find out this issue with Lawyer X through the following situation: “Dear Lawyer! I want to ask what are regulations on Property auction service contract in Vietnam? What are regulations on Rules of an auction? Thanks for answering me!”
Legal grounds
- 2016 Vietnam Law on Property Auction
Property auction service contract
– A property seller shall sign a property auction service contract with a property auction organization to conduct property auction. Such a contract shall be made in writing and must comply with the civil law and 2016 Vietnam Law on Property Auction.
– When signing the property auction service contract, the property seller shall provide the property auction organization with documents of title to prove his/her right to own, use or sell property in accordance with law and take responsibility before law for such documents.
– The property auction organization shall check information on the right to sell property provided by the property seller, and is not responsible for the value and quality of the auctioned property unless this organization fails to adequately and accurately provide bidders with necessary information on the value and quality of the auctioned property under the property auction service contract.
– Rights and obligations of the property auction organization and property seller must comply with the property auction service contract, 2016 Vietnam Law on Property Auction, civil law, and other relevant laws.
– The property seller or property auction organization may unilaterally terminate the performance of the property auction service contract in accordance with the civil law before the property auction organization receives the bidder’s dossier for participation in auction, unless otherwise prescribed by law.
– The property seller may cancel the property auction service contract when having one of the following grounds:
+ The auction is held by an organization without the property auction function or conducted by an individual other than an auctioneer, unless it is held by a property auction council;
+ The property auction organization intentionally allows an unqualified person to participate in an auction who later becomes the winning bidder;
+ The property auction organization commits one of the following acts: failing to publicly display information on property auction; failing to disclose information on property auction; improperly implementing regulations on the sale of auction dossiers or organizations registering for participation in auction; or impeding or restricting bidders from registering for participation in auction;
+ The property auction organization colludes or is in cahoots with bidders during the auction, thus falsifying information on the auctioned property, auction dossier or property auction results;
+ The property auction organization holds an auction at variance with regulations on auction forms and methods according to the rules of the auction, thus falsifying the property auction results.
Regulations on rules of an auction
– A property auction organization shall issue rules to be applicable to each auction before the date of public display of information on property auction.
– Rules of an auction must have the following principal contents:
+ Name of property or list of property items, quantity and quality of the auctioned property; place where the auctioned property is located; and documents of title proving the ownership or use right over the auctioned property;
+ Time and venue for checking the auctioned property;
+ Time and venue for selling auction dossiers;
+ Reserve price of the auctioned property, in case such price is publicized;
+ Money amount paid for buying auction dossiers, and advance payment;
+ Time, venue, conditions and method of registration for participation in auction;
+ Time and venue for holding the auction;
+ Form and method of auction;
+ Cases of deprival of the right to participate in auction, and cases ineligible for refund of advance payment.
– A property auction organization shall publicize the rules of an auction.
Public display of information on property auction
– A property auction organization shall publicly display information on property auction at:
+ Its head office, place where the property is displayed (if any) and place where the auction is to be held at least 7 working days before the auction opens, for movable property;
+ Its head office, place where the auction is to be held and commune-level People’s Committee of the locality where the property is located at least 15 working days before the auction opens, for immovable property.
– To-be-displayed principal information details include:
+ Names and addresses or the property auction organization and property seller;
+ The contents prescribed at Points a, b, c, d, dd, e, g and h, Clause 2, Article 34 of 2016 Vietnam Law on Property Auction.
– The property auction organization shall keep documents and images on public display of information on property auction as prescribed in Clauses 1 and 2 of this Article in auction dossiers. In case of public display of information on property auction at the commune-level People’s Committee of the locality where the auctioned property is located, the property auction organization shall keep documents and images on such display or have such display certified in writing by the commune-level People’s Committee.
– In addition to public display of information on property auction prescribed in Clauses 1 and 2 of this Article, the property auction organization shall disclose information on property auction under Article 57 of 2016 Vietnam Law on Property Auction at the request of the property seller.
Checking of auctioned property
– From the date of public display of information on property auction to the date an auction opens, a property auction organization shall permit bidders to check property or property samples for at least 2 consecutive days. The name of the property seller and information on property shall be shown on property or property samples.
– From the date of public display of information on property auction to the date an auction opens, for the auctioned property being property rights or property subject to ownership or use right registration, the property auction organization shall permit bidders to check documents of title and relevant documents for at least 2 consecutive days.
Regulations on venue of auction
An auction shall be held at the head office of a property auction organization, place where the auctioned property is located or another place as agreed upon by the property seller and property auction organization, unless otherwise prescribed by law.
Regulations on registration for participation in auction
– An individual or organization shall register for participation in an auction by submitting a valid auction dossier and making an advance payment to a property auction organization in accordance with 2016 Vietnam Law on Property Auction and other relevant laws. A bidder must satisfy the law-prescribed conditions, if any, for participation in an auction, and may authorize in writing another person to participate in the auction on the bidder’s behalf.
– A property auction organization shall sell auction dossiers and receive them within working hours continuously from the date of public display of information on property auction to the date which is 2 days earlier than the date an auction opens.
– In addition to the conditions for registration for participation in an auction prescribed in 2016 Vietnam Law on Property Auction and other relevant laws, the property seller or property auction organization may not set out any other requirements or conditions on bidders.
– The following persons may not register for participation in an auction:
+ A person having no civil act capacity, person having lost his/her civil act capacity or having his/her civil act capacity restricted, person having difficulties in cognition or behavior control, or person having no cognition or behavior control ability at the time of registration for participation in auction;
+ A person working in the property auction organization that conducts the auction; parent, spouse, child or blood sibling of the auctioneer; person directly engaged in property appraisal or valuation; or parent, spouse, child or blood sibling of the person directly engaged in property appraisal or valuation;
+ A person authorized by the property owner to realize property, person entitled to decide on the sale of property, person signing the property auction service contract, or person entitled to decide on the sale of others’ property in accordance with law;
+ A parent, spouse, child or blood sibling of the person defined at Point c of this Clause;
+ A person not entitled to buy the auctioned property under regulations applicable to such kind of property.
Regulations on Auction forms and methods
– A property auction organization shall reach agreement with a property seller on selecting one of the following auction forms:
+ Oral auction;
+ Casting bid tickets directly at an auction;
+ Delivering sealed bid tickets;
+ Online auction.
– Auction methods include:
+ Ascending-price auction;
+ Descending-price auction.
– Auction forms and methods shall be stated in the rules of an auction and notified to bidders.
– The Government shall detail Point d, Clause 1 of this Article.
Regulations on Oral auction
– An auctioneer shall conduct an oral auction in the following order:
+ Introducing himsel+herself and his/her assistant; publicizing a list of bidders and taking the roll call for identifying bidders;
+ Reading out the rules of the auction;
+ Introducing every auctioned property item;
+ Repeating the reserve price, in case such price is publicized;
+ Notifying bid increment/decrement and the maximum interval between times of bid offer and price setting;
+ Delivering bid tickets to bidders;
+ Guiding methods of offering bids and accepting set prices, and answering questions raised by bidders;
+ Conducting the offer of bids and acceptance of set prices under Clauses 2 and 3 of this Article.
– The offer of bids in case of ascending-price auction is prescribed as follows:
+ The auctioneer requests bidders to offer bids;
+ Bidders offer bids. A bid offered must at least equal the reserve price, in case such price is publicized. A bidder shall offer a bid higher than that offered by the preceding bidder;
+ The auctioneer announces every bid offered by a bidder and asks other bidders to continue offering bids;
+ The auctioneer declares the bidder who has offered the highest bid to be the winning bidder after having repeated three times the highest bid which is higher than the reserve price while no one else offers a higher bid.
– The acceptance of set prices in case of descending-price auction is prescribed as follows:
+ The auctioneer sets a price for bidders to accept. A person who accepts the reserve price is the winning bidder;
+ The auctioneer announces a bid decrement and continues conducting the auction if no one accepts the reserve price or decreased price. A person who accepts the decreased price is the winning bidder;
+ If two or more persons accept the reserve price or decreased price, the auctioneer shall hold a lot draw for selecting the winning bidder.
Auction in form of directly casting bid tickets
– The auctioneer shall conduct an auction in the form of casting bid tickets directly at the auction in the following order:
+ Performing the jobs specified at Points a, b, c, d, dd, e and g, Clause 1, Article 41 of 2016 Vietnam Law on Property Auction;
+ Repeating requirements for a valid bid ticket, and time for ticket writing;
+ Conducting the offer of bids and acceptance of set prices under Clauses 2 and 3 of this Article.
– The offer of bids in case of ascending-price auction is prescribed as follows:
+ Each of bidders is delivered a bid offer ticket for him/her to write a bid h+she wants to offer. Upon the expiration of the time limit for writing in the ticket, the auctioneer asks the bidders to submit their bid tickets or to cast them into the ticket box; counts the number of tickets delivered and number of tickets collected; announces each bid and the highest bid under the supervision of at least one bidder;
+ The auctioneer announces the highest bid in such round of auction and asks the bidders to continue offering bids for the subsequent round. The reserve price for the subsequent round of auction is the highest bid offered in the preceding round;
+ The auction finishes when no one offers a bid. The auctioneer declares the person who has offered the highest bid to be the winning bidder;
+ If two or more persons offer the same highest bid, the auctioneer holds another auction among these persons for selecting the winning bidder. If one of these persons rejects holding another auction or none of them offers a higher bid, the auctioneer holds a lot draw to select the winning bidder.
– The acceptance of set prices in case of descending-price auction is prescribed as follows:
+ Every bidder shall be delivered a price acceptance ticket for him/her to write the auctioneer-set reserve price h+she accepts. Upon the expiration of the time limit for ticket writing, the auctioneer shall ask the bidders to submit their bid tickets or to cast them into the ticket box; and counts the number of tickets delivered and number of tickets collected;
+ The auctioneer shall announce the price acceptance by each bidder under supervision of at least one bidder;
+ The auctioneer shall declare the person who accepts the reserve price to be the winning bidder. If no one accepts the reserve price, the auctioneer shall announce a bid decrement and conduct the casting of bid tickets with the decreased price;
+ If two or more persons accept the reserve price or decreased price, the auctioneer holds a low draw for selecting the winning bidder.
– The property seller and property auction organization shall reach agreement on the method of casting bid tickets and number of auction rounds prescribed in Clauses 2 and 3 of this Article.
Auction in form of delivering sealed bid tickets
– When registering for participation in an auction, a bidder shall be delivered a bid offer ticket and provided with guidance on the method of writing in the ticket, deadline for submitting the ticket, and time of the price announcement session. The property auction organization shall introduce to the bidders each item of auctioned property, repeat the reserve price in case such price is publicized, answer questions raised by the bidders, and perform other jobs as stated in the rules of the auction.
– A bidder’s bid offer ticket shall be put into an envelop made of a security material and bear the signature of the bidder at edges of the ticket-containing envelope. This ticket shall be sent by post or submitted directly to the property auction organization for being cast into the ticket box. The ticket box shall be sealed up right after the deadline for ticket receipt.
– At the session for announcing bids offered by bidders, the auctioneer introduces himsel+herself and his/her assistant; reads out the rules of the auction; announces the list of bidders and takes the roll call for identifying bidders; and announces the number of tickets delivered and number of tickets collected.
The conducting auctioneer shall invite at least one bidder to supervise the intactness of the ticket box. If no opinion is given on the supervision result, the auctioneer shall break the seal of the ticket box.
The auctioneer shall invite at least one bidder to supervise the intactness of every bid offer ticket; tear open every ticket, announce the number of valid tickets and number of invalid tickets, every bid offer ticket and ticket with the highest bid, and announce the person who has offered the highest bid to be the winning bidder.
– If two or more persons offer the highest bid, right at the bid announcement session, the auctioneer shall hold another auction for these persons in order to select the winning bidder. The auctioneer shall decide to hold an oral auction or an auction by directly casting bid tickets. If one of these persons rejects holding another auction or none of them offers a higher bid, the auctioneer shall hold a lot draw for selecting the winning bidder.
Regulations on Auction minutes
– An auction ends when the auctioneer announces the winning bidder or when it fails as prescribed in Clause 1, Article 52 of 2016 Vietnam Law on Property Auction.
– Developments of the auction shall be recorded in an auction minutes, which shall be made at the auction and signed by the auctioneer, minutes maker, winning bidder, property seller, and representatives of bidders. For an auction conducted by a property auction council, its minutes must also bear the signature of the council’s chairperson.
– The winning bidder who refuses to sign the auction minutes shall be regarded as having refused to conclude a contract on purchase and sale of the auctioned property or to buy the auctioned property, for property of which auction result is subject to approval by a competent agency.
– The auction minutes must bear a seal of the property auction organization; for an auction conducted by a property auction council, its minutes must bear a seal of the competent person who has decided to form the council.
Transfer of auction dossiers
– Within 1 working day after an auction ends, the property auction organization shall record the property auction results in the Property Auction Register and notify such results in writing to the property seller. For an auction conducted by a property auction council, within 1 working day after the auction ends, the council shall notify in writing the property auction results to the competent person who has decided to form the council.
– Within 3 working days after the auction ends, the property auction organization or property auction council shall transfer the property auction results, property auction minutes and list of winning bidders to the property seller for signing a contract on purchase and sale of the auctioned property or to a competent agency for approving the property auction results, and shall complete relevant procedures, unless otherwise provided by law.
Contracts on purchase and sale of auctioned property, approval of property auction results
– Property auction results serve as a basis for the parties to sign a contract on purchase and sale of the auctioned property or for a competent agency to approve.
– A contract on purchase and sale of the auctioned property shall be signed between the property seller and winning bidder or between the property seller, winning bidder and property auction organization if so agreed upon by the parties, unless otherwise provided by law. This contract must comply with the civil law.
– A winning bidder shall be regarded as accepting to sign a contract on purchase and sale of the auctioned property from the time the auctioneer announces the winning bidder, unless the winning bidder refuses to sign the auction minutes under Clause 3, Article 44 of 2016 Vietnam Law on Property Auction or rejects the auction winning results under Article 51 of 2016 Vietnam Law on Property Auction. From this time, the rights and obligations of the parties must comply with the civil law and other relevant laws.
– The order, procedures and competence for approval of property auction results must comply with relevant laws.
Please see more:
- Instructions for exclusive registration of company logos in Vietnam
- Service of changing the legal representative of Vietnamese enterprises
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Frequently asked questions
A property seller shall sign a property auction service contract with a property auction organization to conduct property auction. Such a contract shall be made in writing and must comply with the civil law and 2016 Vietnam Law on Property Auction.
When signing the property auction service contract, the property seller shall provide the property auction organization with documents of title to prove his/her right to own, use or sell property in accordance with law and take responsibility before law for such documents.
The property auction organization shall check information on the right to sell property provided by the property seller, and is not responsible for the value and quality of the auctioned property unless this organization fails to adequately and accurately provide bidders with necessary information on the value and quality of the auctioned property under the property auction service contract.
Conclusion: So the above is Order and procedures for property auction in Vietnam. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
