In 2024, what is the newest contract form for the transfer of land use rights in Vietnam? Is the handwritten contract for the transfer of land use rights valid?
What is the newest contract form for the transfer of land use rights in Vietnam?
When carrying out land use right transfer, the two parties may use the contact form for the transfer of land use rights (Form No. 06) in the Appendix promulgated together with Decree 02/2022/ND-CP as follows:
Download the newest contract form for the transfer of land use rights in Vietnam: Here.
Currently, is the handwritten contract for the transfer of land use rights in Vietnam valid?
According to the provisions of Point a, Clause 3, Article 167 of the 2013 Land Law, regulations on the notarization and certification of contracts and documents exercising the rights of land users shall be implemented as follows:
The right to exchange, transfer, lease, sublease, inherit, donate, mortgage land use rights and contribute land use rights as capital
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3. The notarization and certification of contracts and documents on the exercise of the rights of land users shall be conducted as follows:
a/ Contracts on transfer, donation, mortgage or contribution of land use rights as capital or the rights to use land and land-attached assets must be notarized or certified, except the case of real estate business prescribed at Point b of this Clause;
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Under Clause 2, Article 129 of the 2015 Civil Code on contracts that do not comply with regulations on form but are still recognized by the Court:
Invalidity of civil transactions due to non-compliance with form
A civil transaction violating conditions for validity pertaining to form shall be invalid, except for any of the following cases:
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2. If the form of a civil transaction, required to be established in writing, violates against regulations on notarizing or authorization, but a party or the parties has/have fulfill at least two third of the obligations in the transaction, a court, at his/her/their request(s), shall issue a decision on recognition of the validity of such transaction. In this case, the parties need not perform the notarizing or authorization.
Thus, the handwritten contract for the transfer of land use rights must be notarized or authenticated to enter into force, unless one party or parties to the transaction is an organization engaged in real estate business.
However, in case the contract violates the mandatory provisions on notarization and authentication (ie the handwritten contract is not notarized or authenticated), but one party or the parties have performed at least 2/3 of the obligations in the contract, the Court shall still decide to recognize the validity of the contract as required.
What are the eligibility requirements to engage in real estate business in Vietnam from January 1, 2025?
According to Article 9 of the Law on Real Estate Business 2023, the eligibility requirements to engage in real estate business in Vietnam are specified as follows:
(1) Any organization or individual that wishes to engage in real estate business must establish an enterprise, or cooperative or cooperative union, in accordance with the Law on Enterprises or the Law on Cooperatives respectively, whose business lines include real estate business (hereinafter referred to as “real estate enterprise”), except the cases in (3) and (4).
An organization or individual providing real estate services shall comply with the provisions in (5).
(2) A real estate enterprise shall be required to meet the following requirements:
+ It is not subject to any court’s judgment or decision, or a competent authority’s decision, on prohibition or suspension of real estate business;
+ It must maintain safe ratios of outstanding credit balance and outstanding bonds to the owner's equity;
+ The real estate enterprise approving a real estate project must ensure that its owner's equity shall not be lower than 20% of total investment of that project, if the area of land used is less than 20 ha, or 15% of total investment of that project, if the area of land used is 20 ha or higher, and that it is capable of raising capital for implementing that project. If a real estate enterprise implements several real estate projects at the same time, its owner's equity must be sufficient to fund all of such projects at the abovementioned percentage.
(3) An individual engaging in a small-scale real estate business shall not be required to establish a real estate enterprise but must declare and pay taxes in accordance with regulations of law.
(4) An organization or individual that sells housing, building or its floor area for non-commercial purposes or conducts sale, lease or lease purchase of housing, building or its floor area of an ultra-small scale shall not be subject to the provisions of Law on Real Estate Business 2023 but must declare and pay taxes in accordance with regulations of law. The organization or individual that sells or offers lease purchase of housing, building or its floor area must also follow certification or notarization procedures as prescribed in clause 5 Article 44 of Law on Real Estate Business 2023.
(5) Any organization or individual that wishes to provide real estate services must establish an enterprise, or cooperative or cooperative union, in accordance with the Law on Enterprises or the Law on Cooperatives respectively (hereinafter referred to as “real estate service enterprise”), and meet relevant requirements laid down in Law on Real Estate Business 2023.
(6) The Government shall elaborate points b and c clause 2 of Article 9 of the Law on Real Estate Business 2023; and provide guidelines for determination of small-scale real estate business as prescribed in (3) and (4).
Notes:
- The Land Law 2024 will come into effect from January 1, 2025. However, Articles 190 and 248 of the Land Law 2024 come into effect from April 1, 2024.
Recently, with the desire to apply the Land Law 2024 before the planned date, on March 26, 2024, the Prime Minister of Vietnam has Official Dispatch 202/TTg-NN proposing the National Assembly of Vietnam to allow the Land Law 2024 to come into force from July 1, 2024.
Thus, the Land Law 2024 may be replaced from July 1, 2024.
- The Law on Real Estate Business 2023 comes into force from January 1, 2025.
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