Hi Lawyer, I am preparing to buy a new house for my parents but the other party asks for a deposit. Deposit is one of the security measures specified in the Civil Code. So about the matter “Regulations on deposit to buy a house under Vietnam law” Let’s find out with LSX in the article below.
Legal grounds
- Civil Code 2015
What is a deposit?
Clause 1, Article 328 of the 2015 Civil Code provides:
“first. Deposit is when one party (hereinafter referred to as the depositor) hands over to the other party (hereinafter referred to as the depositee) a sum of money or precious metals, gems or other valuables (hereinafter collectively referred to as the depository). as a security deposit) for a period to secure the conclusion or performance of the contract.”
Thus, a deposit is a security measure for the performance of an obligation; Deposits are used in many fields, most commonly when transferring real estate.
Is a deposit required when buying a house?
Although a deposit is a means of securing the performance of an obligation, according to the provisions of the Civil Code 2015, Land Law 2013, Housing Law 2014 and guiding documents, there are no mandatory provisions. deposit must be made by the parties.
When transferring land use rights, buying and selling houses, the following steps must be followed:
Step 1: Notarize or authenticate the transfer and purchase contract
Step 2: Declare financial obligations
Step 3: Register volatility (register to name).
In fact, steps 2 and 3 are performed at the same time if the transferee and the buyer agree to pay personal income tax on behalf of the transferor and the seller.
Accordingly, a deposit is the first step (if any) before signing a transfer or sale contract in order to enter into or perform the contract (in fact, the concept of a security deposit so as not to transfer or sell to others). ).
No deposit penalty if it’s just a receipt
According to the provisions of Clause 2, Article 328 of the Civil Code 2015, when one of the parties refuses to enter into or perform a contract, a deposit penalty will be imposed, unless otherwise agreed.
However, if the party intending to buy hands over the money to the party who owns the house or land but does not agree to make a deposit, or has a money receipt but does not say the deposit in that paper, there will be no deposit penalty.
In case there is only a money receipt (in which there is no word as deposit), the obligations of the parties in breach will be different from the deposit. If an amount is given without agreement as a deposit, then it is considered a “prepayment”. In essence, prepayment is an amount of money to fulfill payment obligations, in case the parties do not transfer the land, such money will be handled as follows:
– The money giver refuses to enter into and perform the contract, the prepaid money will be received back and will not be penalized, unless otherwise agreed by the parties.
– If the money-receiving party refuses to enter into and perform the contract, it only has to return the prepaid amount and not pay a deposit penalty, unless otherwise agreed by the parties.
Thus, people need to pay close attention to this problem because in many cases, in fact, they want to pay a deposit on the other side, but without a deposit agreement, it can’t be handled.
Regulations on deposit to buy a house under Vietnam law
No deposit penalty if it’s just a receipt
According to the provisions of Clause 2, Article 328 of the Civil Code 2015, when one of the parties refuses to enter into or perform a contract, a deposit penalty will be imposed, unless otherwise agreed.
However, if the party intending to buy hands over the money to the party who owns the house or land but does not agree to make a deposit, or has a money receipt but does not say the deposit in that paper, there will be no deposit penalty.
In case there is only a money receipt (in which there is no word as deposit), the obligations of the parties in breach will be different from the deposit. If an amount is given without agreement as a deposit, then it is considered a “prepayment”. In essence, prepayment is an amount of money to fulfill payment obligations, in case the parties do not transfer the land, such money will be handled as follows:
– The money giver refuses to enter into and perform the contract, the prepaid money will be received back and will not be penalized, unless otherwise agreed by the parties.
– If the money-receiving party refuses to enter into and perform the contract, it only has to return the prepaid amount and not pay a deposit penalty, unless otherwise agreed by the parties.
Thus, people need to pay close attention to this problem because in many cases, in fact, they want to pay a deposit on the other side, but without a deposit agreement, it can’t be handled.
According to the land purchase deposit experience, before the land purchase and sale takes place, the buyer must conduct the work of checking the planning status of the land that he is planning to buy, whether it is in the planning area of the project. judgment or not.
In case the land has a red book, planning information will usually be recorded directly in the notes section in the book, which clearly states what planning area this land lot is in. Buyers can consider and consider whether the plan is suitable for them, from which to proceed with the purchase of land.
Check land owner information
Information on the land owner is one of the important information to know who has the right to determine that piece of land, has the right to conduct sales and transfer transactions, etc. In case the land is owned by the household, A family or a husband and wife must have the consent of all members before they can continue to conduct other land-related transactions.
In addition, during the transaction, the buyer needs to ask for identification documents, proof of ownership for the land, as well as a written authorization or consent of the members if buying the household’s land from seller.
Checking the owner is a must to avoid possible disputes in the future, for example, the wife reclaims the land, the husband sells it voluntarily, or the family members reclaim the land by the representative in the name of the pink book voluntarily sell without consent.
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Frequently asked questions
The 2015 Civil Code does not stipulate the deposit amount. Therefore, the parties are entitled to agree on the deposit level. However, although it is not regulated by law, in order to limit risks, the parties can agree at less than 30% of the value of the transfer contract for real estate or the purchase and sale contract for the house.
To assess the risks or obligations of the parties if the transfer or sale contract is not entered into or performed, it depends on the position of each party; because if the deposit recipient violates, the depositor will benefit, if the depositor violates, the deposit recipient will benefit.
The 2015 Civil Code, the 2013 Land Law, the 2014 Housing Law, the 2014 Notarization Law and the guiding document do not contain any provisions that the deposit contract must be notarized or authenticated. only stipulates the notarization of contracts on the transfer or donation of land use rights and assets attached to land.
However, to avoid disputes or other risks, the parties should notarize or authenticate. In fact, in many cases, because of trust, they only give a deposit without having a record of deposit delivery, leading to a dispute.
When the deposit recipient or depositor fails to sign or perform the contract as agreed, a deposit penalty will be imposed; The deposit penalty is clearly defined in Clause 2, Article 328 of the 2015 Civil Code as follows:
“In case the contract is entered into or performed, the deposit property shall be returned to the depositor or deducted to fulfill the payment obligation; if the depositor refuses to enter into and perform the contract, the deposited property belongs to the deposit recipient; if the deposit recipient refuses to enter into and perform the contract, it must pay the depositor the deposit property and an amount equivalent to the value of the deposited property, unless otherwise agreed.
Accordingly, the deposit penalty is determined as follows:
If the depositor refuses to enter into and perform the contract, the deposit property belongs to the deposit recipient (losing the deposit amount).
If the deposit receiving party refuses to enter into and perform the contract, it must pay the depositor the deposit property and an amount equivalent to the value of the deposited property (return the deposit and be fined a deposit). amount equivalent to the deposit).
Note: The parties have other agreements such as no deposit penalty or deposit penalty at a lower or higher level, then comply with that agreement provided that the content of the agreement is not contrary to law and social ethics.
Conclusion: So the above is Regulations on deposit to buy a house 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
