Due to various reasons and difficult circumstances, some people have to sell houses during mortgaging for a bank loan. However, buying and selling an asset such as real estate is very difficult, let alone this property is currently mortgaged for loans at banks. So, many people do not know how to get the procedure done. In this article, LSX legal firm will give you a guideline on: “Process of buying and selling real estate with bank loan in Vietnam”
Legal ground
- Civil Code 2015
Mortgage for a bank loan
Mortgage of property means the use by one party (hereinafter referred to as the mortgagor) of property under the ownership of the obligor as security for the performance of an obligation to the other party (hereinafter referred to as the mortgagee) without transferring such property to the mortgagee.
The mortgaged property shall be held by the mortgagor. The parties may agree to deliver the mortgaged property to a third person to hold.
Effectiveness of mortgage of property:
- Agreement on the mortgage of property shall take effect from the time of concluding unless otherwise agreed or prescribed by law.
- The mortgage of property shall take effect against a third party from the time of registration.
On the other hand, a mortgage of property shall terminate in any of the following cases:
- The obligation secured by the mortgage has terminated.
- The mortgage of the property has been cancelled or substituted with another security.
- The mortgaged property has been realized.
- As agreed by the parties.
Conditions for mortgage of land use rights
Mortgage of land use rights for bank loans belongs to the basic rights of land users. According to Article 167 of the Law on Land 2013, households and individuals owning land may exercise the right to mortgage land use rights to borrow capital at credit institutions licensed to operate in Vietnam. However, for land leased with annual payment, the land user may only mortgage his/her own property attached to the leased land in accordance with Point dd, Clause 2, Article 179 of the 2013 Land Law.
The time to be able to mortgage the land use right for a bank loan, according to the provisions of Article 168 of the Land Law 2013, is when the land user has been granted a land use right certificate. In the case of conversion of agricultural land use rights, the land user may exercise the mortgage right after the issuance of decision on land allocation or land lease by the State. In case of inheriting land use rights, land users may exercise their mortgage rights when fully meeting the conditions for grant of certificates of land use rights and ownership of houses and other land-attached assets.
Pursuant to Clause 1, Article 188 of the 2013 Land Law, a land user may exercise the mortgage right when fully meeting the following conditions:
“1. Land users may exercise the rights to exchange, transfer, lease, sublease, inherit, donate or mortgage land use rights and contribute land use rights as capital when meeting the following conditions:
a) Having the certificate, except the case prescribed in Clause 3, Article 186 and the case of receiving inheritance prescribed in Clause 1, Article 168 of this Law;
b) The land is dispute-free;
c) The land use rights are not distrained to secure judgment enforcement;
d) Within the land use term.”
Can you use real estate as a mortgage for a bank loan?
Article 318 of the Civil Code 2015 provides for mortgaged property as follows:
Article 318. Mortgaged property
- Where entire immovable property or moveable property having auxiliary objects is mortgaged, such auxiliary objects shall also form part of the mortgaged property, unless otherwise agreed.
- Where a portion of immovable property or moveable property having auxiliary objects is mortgaged, such auxiliary objects shall also form part of the mortgaged property, unless otherwise agreed by the parties.
- With respect to mortgage on land use rights that property on land owned by the mortgagor, such property shall also part of the mortgaged property, unless otherwise agreed.
- Where mortgaged property is insured, the mortgagee must notify the insurer that the insured property is being mortgaged. The insurer shall pay the insured sum directly to the mortgagee upon the occurrence of an insured event.
If the mortgagee failed to notify the insurer that the insured property was mortgaged, the insurer shall pay the insured sum in accordance with the insurance contract and the mortgagor shall be obliged to make payment to the mortgagee.
Accordingly, you can use real estate as a mortgage for a bank loan.
Can you resell the mortgaged land with a bank loan?
Article 321 of the Civil Code 2015 provides for the rights of the mortgagor as follows:
- Exploit, and to enjoy the yield and income derived from, the property, except where the yield and income also form part of the mortgaged property as agreed.
- Invest in order to increase the value of the mortgaged property.
- Recover the mortgaged property and related documents held by a third person when the obligation secured by the mortgage is terminated or is substituted by other security.
- Sell or replace the mortgaged property being goods rotating during the production and business process. In the case of a sale of the mortgaged property being goods rotating during the production and business process, the right to require the purchaser to pay money, the proceeds received or the assets formed from the proceeds received shall form the mortgaged property in substitution for the property which was sold. When a warehouse is mortgaged, the mortgagor may substitute goods in the warehouse but must ensure the value of the goods in the warehouse remains the value agreed.
- Sell, exchange or give mortgaged property not being goods rotating during the production and business process with the consent of the mortgagee or as prescribed by law.
- Lease or lend the mortgaged property provided that notice must be provided to the lessee and the borrower that the property is being mortgaged and that the mortgagee must also be notified that such notice has been provided.
Thus, the person who mortgages the house for a loan at the bank has the right to sell the mortgaged property but must get the approval of the mortgagee bank.
Process of buying and selling real estate with bank loan in Vietnam
Firstly, notify the bank that you want to sell the house.
As mentioned above, the person who mortgages the house to borrow money at the bank has the right to sell the mortgaged property but must get the approval of the bank. Without the consent of the bank, you must not sell the mortgaged property to other people.
Secondly, sign a sale and purchase contract for real estate with a bank mortgage.
When buying and selling a house with a bank loan, you need to sign 02 contracts and get them notarized or authenticated to ensure legality. A real estate sale and purchase contract with a bank mortgage, and a deposit contract (for the purpose of paying the part of the mortgage loan that the seller has not paid off to the bank to get back the red book/pink book to carry out the procedures for transferring names, updating land changes).
Thirdly, pay the outstanding mortgage loan with the bank.
Pay the outstanding mortgage loan with the bank from the previous deposit contract signed by the parties. After getting the payment done, get back the red book/pink book from the bank.
Fourthly, carry out procedures for land transfer.
Legal service of LSX Legal Firm
LSX legal firm provides legal services to clients in various legal areas. To make your case convenient, LSX will perform:
- Legal advice related to new regulations;
- Representing in drafting and editing documents;
- We commit the papers to be valid, and legal for use in all cases;
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With a team of experienced, reputable, and professional consultants; The firm is always ready to support and work with clients to solve legal difficulties.
Furthermore, using our service, you do not need to do the paperwork yourself; We guarantee to help you prepare documents effectively and legally.
Also, you will not have to waste time preparing the application, submitting application, or receiving results. At those stages, we will help you do it smoothly.
After all, LSX provides the service with the desire that customers can experience it the best way. Additionally, we guarantee the cost to be the most suitable and economical for customers.
Contact LSX
Finally, hope this article is useful for you to answer the question about “Process of buying and selling real estate with bank loan in Vietnam?”. If you need any further information, please contact LSX Law firm: +84846175333 or Email: [email protected]
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Related questions
Firstly, agricultural land allocated by the State within the limit;
Secondly, l and allocated by the State with a collection of land use levy;
Thirdly, land leased with a one-time payment for the entire lease period;
Fourthly, land recognized by the State with land use rights;
Fifthly, land received for conversion, transfer, donation, and inheritance.
1. Where the parties agree that the mortgagee will hold the documents relating to the mortgaged property, to return to the mortgagor such documents upon termination of the mortgage.
2. Follow procedures for realization of mortgaged property in accordance with regulations of law.
Land users may not mortgage their red books if they do not fully meet the conditions for a mortgage of land use rights as prescribed in Clause 1, Article 188 of the Land Law as follows:
– Having the certificate, except for the case prescribed in Clause 3, Article 186 and the case of receiving inheritance prescribed in Clause 1, Article 168 of this Law;
– The land is dispute-free;
– The land use rights are not distrained to secure judgment enforcement;
– Within the land use term.
Conclusion: So the above is Process of buying and selling real estate with bank loan in Vietnam. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
