VIETNAM Law and Practice Contributed by: Tran Thai Binh and Duong Thi Minh Han, LNT & Partners
user enjoys almost full rights over the land and may exercise a broad range of rights attached to the LUR. • Leased LUR with one-off rental payment for the entire lease term : Land-use rights are leased from the State pursuant to a land lease decision, with rental paid upfront for the entire term. This mecha - nism is commonly applied to foreign-invested enterprises and foreign individuals. • Leased LUR with annual rental payment : Land-use rights are leased from the State with rent paid on an annual basis. In this case, the land user is sub - ject to certain restrictions in exercising LURs; for example, the LUR holder is not entitled to transfer the LUR without asset ownership attached to the land. A transferee of land-use rights will enjoy the same rights and be subject to the same obligations as the transferor in respect of such rights. Ownership rights to assets to the land This includes ownership rights over buildings and other structures situated on the land (if any), encom - passing the rights to possess, use, and dispose of such assets. In particular, the owner may freely sell, lease, mortgage, or otherwise deal with these assets in accordance with applicable laws. However, the scope of these rights also depends on the type of property. For example, owners of apart - ment units hold ownership over their individual units, while sharing land-use rights to the land on which the building is constructed with other unit owners on a co-ownership basis. Investment rights in project development These are rights associated with the development and implementation of real estate projects. However, such rights are subject to obtaining the requisite approvals through the prescribed regulatory procedures. 2.2 Laws Applicable to Transfer of Title Title to real estate may include LURs and assets attached to the land. Land Law specifically deals with LUR matters, while other laws (eg, the Civil Code, Residential Housing Law, Real Estate Trading Law, Law on Investment, Law on Enterprises) deal
with matters relating to construction structure or real estate business. Apart from Residential Housing Law and Real Estate Trading Law, which specifically deal with transfer of ownership in residential housing and building struc - tures, respectively, there is no clear separation of real estate types – ie, industrial, offices, retail or hotels. Therefore, in general, a real estate transfer transac - tion may become the subject of various laws depend - ing on the subject in question. However, due to the varied LURs, there are differences in deal structures, procedures and documents in deals transferring the real estate. As such, different laws apply in real estate transfer transactions. It should be noted that Vietnam law follows a strict title registration system which provides that property title will not be properly recognised by law until it is registered with the competent authorities. 2.3 Effecting Lawful and Proper Transfer of Title Transfer of real estate title is lawful and valid if the transaction documents are compliant with the law and the title conveyance is properly registered with the land registry authority. The title to real estate is recognised and recorded in the Certificate of Land Use Rights[1.1][LNT2.1] and Assets Attached to Land (LURC). The transfer agreement must be executed in writing and notarised by a licensed and competent notary office (with certain exceptions) to be valid. A title transfer is deemed complete once registered and recorded by the Land Registry Office under provin - cial-level Departments of Agriculture and Environment (DAE) and reflected in an LURC with the transferee as the current land user and/or real estate owner. There is no concept of title insurance in Vietnam. How - ever, a buyer should check the validity and legal status of the real estate at the relevant sources (eg, the Land Registry Office or DAE and notary offices) before sign - ing the transfer agreement and executing payment, since there may be encumbrances on the property (pledges, mortgages, government recovery orders, enclosures, or land-use restrictions, etc) which pre -
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