VIETNAM Law and Practice Contributed by: Tran Thai Binh and Duong Thi Minh Han, LNT & Partners
2.5 Typical Representations and Warranties
agreement and executing payment, since there may be encumbrances on the property (pledges, mortgages, government recovery orders, enclo - sures, or land-use restrictions, etc) which pre - vent the title transfer. According to the law on notarisation, the parties to a real estate transfer transaction are required to sign the document(s) in person, witnessed by a notary officer. E-signa - tures are not yet accepted. However, the trans - feror or transferee may have their representa - tive execute such document(s) or conduct title registration by power of attorney. In general, the principal is responsible for any act by the rep - resentative in relation to the transfer transaction which complies with that described under the Due to its complex nature, buyers, who are either individuals or corporate entities investing in real estate projects, should conduct due dili - gence with the engagement of legal, technical and finance experts in respect of the land and investment property. Legal due diligence usually includes checking: responsibilities of power of attorney. 2.4 Real Estate Due Diligence • the legal capacity of the seller/transferor; • the legal status of the land of the real estate; • the valid title of the property/investment project and the land on which the property/ investment project stands; • the validity of the LURs and compliance to the real estate development; and • any encumbrances on the real properties, including zoning restrictions, title disputes, current collateral with the properties, and/ or unpaid financial obligations by the seller/ transferor.
In real estate transactions, buyers require sellers to make representations and warranties (R&W) according to which: • the seller is duly incorporated or has full power and capacity to transact; • the seller owns the valid title to the land and/ or project investment; • the seller is granted the proper investment and development rights in the real estate project, including development approvals, construction licences, environmental assess - ments and others (if the seller is a developer); • the real estate is not subject to encumbranc - es, restrictions, disputes, foreclosure, a court order enforcement, or an urban zoning order; • the real estate of an investment project and the land are clear from any administrative penalties in accordance with the laws on land, investment, construction, planning and zoning, and tax; and • the real estate and the land are not subject to any prohibition order from transaction made by competent authority. However, the concept of R&W is conceived in the common law system; it is not expressly regulated by civil law. A legal adviser in the field may enforce these R&W by obliging the seller to ensure R&W are true and remain so. Depending on the agreement drafting tech - niques, a misrepresentation or an incorrect war - ranty can lead to invalidity or cancellation of the agreement, or breach by the party making the misrepresentation or having an incorrect warran - ty. It is the responsibility of the parties to include clauses on the survival period of the R&W.
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