VIETNAM Law and Practice Contributed by: Tran Thai Binh and Duong Thi Minh Han, LNT & Partners
2. Sale and Purchase 2.1 Categories of Property Rights In Vietnam, rights to real estate include the fol - lowing. • Rights attached to the land – ie, land-use rights (LUR). There is no term for land own - ership in Vietnam, since land is by law considered to be under the “ownership of the people” . Subsets of the LURs of a land user include the right to transfer (not to sell), capitalise, lease (or sublease), bequest, exchange, gift, and pledge or mortgage such LUR, similar to ownership rights. On the other hand, a real estate owner has ownership over the property on land while holding LURs to the land. As such, theoretically, acquiring land in Vietnam means acquiring some or all of the rights attached to it. Depending on land cat - egories (leased land or allocated land), entitle - ment to all or some of the LURs by land users may vary. For example, a land user holding leased land with annual payment of rent can - not use the LUR as collateral, while a land user of allocated land is permitted to do so. • Ownership rights to the building structure on the land (if any). • Investment rights in project development. 2.2 Laws Applicable to Transfer of Title Title to real estate may include LURs and build - ing structures on 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 Enter - prises) 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 structures, respectively, there is no clear separation of real estate types – ie, industrial, offices, retail or hotels. Therefore, in general, a real estate transfer transaction may become the subject of various laws depending on the subject in question. However, due to the varied LURs, there are differences in deal structures, proce - dures 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 and Assets Attached to Land (LURC). The transfer agreement must be executed in writing and notarised by a licensed and compe - tent notary office (with certain exceptions) to be valid. A title transfer is deemed complete once registered and recorded by the Land Registry Office under provincial-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 Viet - nam. However, 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 signing the transfer
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