Is it permissible to sell land that is mortgaged at the bank in Vietnam? In Vietnam: Is it permissible for the bank to put mortgaged land up for an auction when the mortgagor is unable to pay the debt? What are conditions for individuals to mortgage land use rights in Vietnam?
Hello Lawnet. I have a piece of land in the countryside. As I needed capital, so I mortgaged it at a bank to get money to invest. Now, my business has failed so I can't pay the bank loan. Can I sell the land I am mortgaged to get money to pay the bank debt?
Pursuant to Article 320 of the Civil Code in 2015 stipulating obligations of mortgagor as follows:
1. Transfer documents related to the mortgaged property, unless otherwise agreed or prescribed by law.
2. Take care of and preserve the mortgaged property.
3. If the mortgaged property is in danger of losing its value or depreciating in value due to its exploitation, to take necessary remedial measures, including ceasing the exploitation of the mortgaged property.
4. When the mortgaged property is damaged, the mortgagor is obligated to, within a reasonable period, repair or substitute another property with equivalent value, unless otherwise agreed.
5. Provide information about the actual condition of the mortgaged property to for the mortgagee.
6. Deliver the mortgaged property to the mortgagee for realization in one of the cases prescribed in Article 299 of this Code.
7. Notify the mortgagee of any third person rights with respect to the mortgaged property (if any). In the case of failure to provide such notice, the mortgagee shall have the right to cancel the contract of mortgage of property and demand compensation for damage or the right to maintain the contract and agree on the rights of the third person with respect to the mortgaged property.
8. Do not sell, exchange or give the mortgaged property, except in the cases provided in Clauses 4 and 5 of Article 321 of this Code.
Pursuant to Clause 5 Article 321 of the Civil Code in 2015 stipulating as follows:
5. 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.
As regulations above, you are not allowed to sell land that is mortgaged at the bank unless you obtain the consent from the bank to do sell it.
Pursuant to Article 323 of the Civil Code in 2015 stipulating rights of mortgagees as follows:
1. Examine and inspect directly the mortgaged property provided that such examination and inspection does not hinder or cause difficulty to the use and exploitation of the mortgaged property.
2. Require the mortgagor to provide information on the current status of the mortgaged property.
3. Require the mortgagor to apply necessary measures to preserve the property and the value of the property if there is a danger that use and exploitation of the mortgaged property will cause loss of value or depreciation in value of the property.
4. Conduct the registration of mortgage as prescribed by law.
5. Require the mortgagor or a third person holding the mortgaged property to deliver it to the mortgagee for realization if, upon expiry of the term for fulfillment of the obligation, the obligor has failed to perform or performed incorrectly the obligation.
6. Hold documents related to mortgaged property as agreed by parties, unless otherwise prescribed by law
7. Follow procedures for realization of mortgaged property as prescribed in Article 299 of this Code.
Pursuant to Article 299 of the Civil Code in 2015 stipulating cases of realization of collateral as follows:
1. An obligator fails to perform or perform not as agreed an obligation when it falls due.
2. An obligator must perform the secured obligation before time limit due to his/her violation against the obligation as agreed or prescribed by law.
3. Other cases as agreed by the parties or prescribed by law.
Pursuant to Clause 1 Article 303 of the Civil Code in 2015 stipulating methods of realizing collateral as follows:
1. The securing party and the secured party may agree any of the following methods of realizing collateral:
a) Put collateral up for an auction;
b) The secured party sells collateral itself;
c) The secured party accepts the collateral as substitutions for the performance of obligations of the securing party;
d) Other methods.
2. If there is no agreement on methods of realizing collateral as prescribed in Clause 1 of this Article, the collateral shall be put up for auction, unless otherwise prescribed by law.
As regulations above, it is permissible for the bank to put mortgaged land up for an auction when the mortgagor is unable to pay the debt.
Pursuant to Article 188 of the Law on Land in 2013 stipulating conditions for the exercise of the rights to exchange, transfer, lease, sublease, inherit, donate or mortgage land use rights; to contribute land use rights as capital as follows:
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.
2. In addition to the conditions specified in Clause 1 of this Article, when exercising the rights to exchange, transfer, lease, sublease, inherit, donate or mortgage land use rights and contribute land use rights as capital, land users must also be eligible under Articles 189, 190, 191, 192, 193 and 194 of this Law.
3. The exchange, transfer, lease, sublease, inheritance, donation or mortgage of land use rights or contribution of land use rights as capital must be registered with the land registration agency and will take effect from the time of registration in the cadastral book.
Above are conditions for individuals to mortgage land use rights at credit institutions in Vietnam.
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