Mortgage as a security measure for the performance of civil obligations has many advantages compared to other security measures. For the obligor, the mortgage measure really has a special meaning in the field of business that requires capital. For high-value assets such as land use rights, taking out a mortgage can be risky. So many people wonder, is it okay to mortgage land use rights? If yes, what legal documents do I need to prepare? The following article of Lawyer X will help you answer.
Legal grounds
Land Law 2013
Civil Code 2015
Decree 102/2017/ND-CP
What is mortgage?
Article 317 of the Civil Code 2015, mortgage of property means the use of property by one party (hereinafter referred to as the mortgagor) under his/her ownership to secure the performance of an obligation and not handing over the property to the other party (below referred to as the mortgagee). this is called the mortgagee).
Collateral is held by the mortgagor. The parties may agree to assign a third person to keep the mortgaged property.
Regulations on mortgaged property
In case of mortgage of the entire immovable property or movable property with auxiliary objects, the auxiliary objects of such immovable or movable property shall also belong to the mortgaged property, unless otherwise agreed.
In case of mortgage of a part of real estate or movable property with auxiliary objects, the auxiliary objects attached to such property shall belong to the mortgaged property, unless otherwise agreed.
In case of mortgage of land use rights and properties attached to the land are under the ownership of the mortgagor, the property attached to the land is also part of the mortgaged property, unless otherwise agreed.
Where the mortgaged property is insured, the mortgagee must notify the insurance organization that the insured property is being mortgaged. The insurance organization pays the insurance premium directly to the mortgagee upon the occurrence of the insured event.
In case the mortgagee fails to notify the insurance organization that the insured property is being mortgaged, the insurance organization shall pay the insurance premium according to the insurance contract and the mortgagor is obliged to pay the mortgage. payment to the mortgagee.
Can individuals mortgage land use rights?
Pursuant to Article 179 of the 2013 Land Law, land-using households and individuals have the right to mortgage their land use rights at credit institutions licensed to operate in Vietnam, economic organizations or individuals according to regulations. provisions of the law.
At the same time, based on Article 35 of Decree 21/2021/ND-CP taking effect, from May 15, 2021, individuals and economic organizations that are not credit institutions may receive mortgages for their right to mortgage. land use, land-attached assets (red book) of households and individuals using land, specifically:
“Article 35. Mortgage by individuals or economic organizations other than credit institutions for land use rights and land-attached assets of households or individuals using land
The mortgage of an individual or economic organization that is not a credit institution for the land use rights and land-attached assets of the household or individual using the land must satisfy the following conditions: :
- The mortgagee is an economic organization under the Land Law, and an individual is a Vietnamese citizen with full civil act capacity;
- The acceptance of mortgage to secure the performance of obligations does not violate the prohibition of the Civil Code, other relevant laws, and is not contrary to social ethics in contractual relations with respect to investment, construction, or lease projects. , contracting, services, other transactions;
….4. Other valid conditions of civil transactions as prescribed by the Civil Code and other relevant laws.”
On the other hand, when mortgage, it is necessary to meet the conditions of land law as follows:
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:
- Have a certificate of land use right.
- Land without dispute;
- 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.
Individuals and households using land in one of the following types of land are entitled to mortgage land use rights, including:
- 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-off payment for the entire lease period;
- Land recognized by the State with land use rights;
- Land received for conversion, transfer, donation, inheritance.
Thus, land users can mortgage their land use rights to other individuals or households (if they meet all conditions). Therefore, if your case meets the conditions, you can mortgage the land use right to secure the repayment obligation when lending money. However, you should note, low-mortgage transactions are transactions that must be registered, so when receiving mortgages, they must be registered at the land registry office and and takes effect from the time of registration in the cadastral book.
Mortgage registration procedure
Registration profile:
According to the provisions of Article 39 of Decree 102/2017/ND-CP, stipulating the application for registration of mortgage of land use rights
Article 39. Dossier for registration of mortgage of land use rights and land-attached assets
The registration requester shall submit 01 application for registration of mortgage of land use rights or registration of mortgage of land use rights concurrently with land-attached assets or for registration of mortgage of the following land-attached assets:
- Registration request form (01 original);
- Notarized or authenticated mortgage contract or mortgage contract, if so prescribed by law (1 original or 1 certified true copy);
- The original of the Certificate of land use rights, ownership of houses and other land-attached assets or one of the types of certificates specified in Clause 2, Article 97 of the Land Law (hereinafter referred to as: Certificate);
- In case of mortgage of future land-attached assets other than houses, apart from the papers specified in Clauses 1, 2 and 3 of this Article, the registration requester must submit the following documents:
a) A construction permit as prescribed by law requires a construction permit or a decision on approval of an investment project in accordance with the law requiring an investment project (01 uncertified copy), except for the contract on mortgage of such property is notarized or authenticated; one of the types of Design Drawings showing the construction site of the project in case the investor mortgages the work construction project (01 uncertified copy);
b) A construction permit as prescribed by law requires a construction permit or a decision on approval of an investment project in accordance with the law on which an investment project must be made (01 uncertified copy), except for the contract on mortgage of such property is notarized or authenticated; one of the types of design drawings showing the premises of the property on land approved by the competent authority in the case of mortgage of future land-attached assets, which are construction works. other (01 uncertified copy);
- 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 which the owner 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);
- Proofs in the following cases:
a) Power of attorney in case the registration requester is an authorized person (01 original or 01 certified copy or 01 uncertified copy with the original for comparison);
b) One of the papers proving that he/she is exempt from paying fees when registering a security interest as prescribed in Article 12 of this Decree.
Accordingly, a mortgage registration dossier includes:
- Mortgage registration form 01/DKTC circular 07/2019/TT-BTP
- Notarized mortgage contract
- The original certificate of land use right
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Frequently asked questions
According to the provisions of Article 715 of the 2005 Civil Code, “a contract for mortgage of land use rights is an agreement between parties whereby the land user (hereinafter referred to as the mortgagee) uses the land use right. to secure the performance of a civil obligation to the other party (hereinafter referred to as the mortgagee). The mortgagor may continue to use the land during the mortgage term.
Step 1: Submit the application at the local land registration office
Step 2: Receive and process the application
Pursuant to Article 48 of Decree 102/2017/ND-CP, within the time limit for settlement, the land registration office shall perform the following tasks:
Record the content of mortgage registration in the cadastral book and certificate.
– After recording in the cadastral book and the certificate, certify the registration content on the registration request form.
Time limit for registration of mortgage of land use rights: No more than 3 days as prescribed in Article 16 of Decree 102/2017/TT-BTP
Conclusion: So the above is Vietnamese law on mortgage of land use rights. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
