Vietnam: What are the regulations on the property auction service contract? In case of a successful auction, what is the minimum fee applicable to the property auction service contract?
What are the regulations on the property auction service contract in Vietnam?
Pursuant to Article 33 of the Law on Property Auction 2016 on the property auction service contract as follows:
- A property seller shall sign a property auction service contract with a property auction organization to conduct a property auction. Such a contract shall be made in writing and must comply with the civil law and this Law.
- When signing the property auction service contract, the property seller shall provide the property auction organization with documents of title to prove his/her right to own, use or sell property in accordance with law and take responsibility before law for such documents.
- The property auction organization shall check information on the right to sell property provided by the property seller, and is not responsible for the value and quality of the auctioned property unless this organization fails to adequately and accurately provide bidders with necessary information on the value and quality of the auctioned property under the property auction service contract.
- Rights and obligations of the property auction organization and property seller must comply with the property auction service contract, this Law, civil law, and other relevant laws.
- The property seller or property auction organization may unilaterally terminate the performance of the property auction service contract in accordance with the civil law before the property auction organization receives the bidder’s dossier for participation in auction unless otherwise prescribed by law.
- The property seller may cancel the property auction service contract when having one of the following grounds:
+ The auction is held by an organization without the property auction function or conducted by an individual other than an auctioneer unless it is held by a property auction council;
+ The property auction organization intentionally allows an unqualified person to participate in an auction who later becomes the winning bidder;
+ The property auction organization commits one of the following acts: failing to publicly display information on the property auction; failing to disclose information on the property auction; improperly implementing regulations on the sale of auction dossiers or organizations registering for participation in the auction; or impeding or restricting bidders from registering for participation in the auction;
+ The property auction organization colludes or is in cahoots with bidders during the auction, thus falsifying information on the auctioned property, auction dossier, or property auction results;
+ The property auction organization holds an auction at variance with regulations on auction forms and methods according to the rules of the auction, thus falsifying the property auction results.
What are the rules of a property auction in Vietnam?
Pursuant to Clause 2, Article 34 of the 2016 Law on Property Auction, the rules of a property auction include the following contents:
- Name of property or list of property items, quantity and quality of the auctioned property; the place where the auctioned property is located; and documents of title proving the ownership or use right over the auctioned property;
- Time and venue for checking the auctioned property;
- Time and venue for selling auction dossiers;
- Reserve price of the auctioned property, in case the such price is publicized;
- Money amount paid for buying auction dossiers, and advance payment;
- Time, venue, conditions, and method of registration for participation in the auction;
- Time and venue for holding the auction;
- Form and method of auction;
- Cases of deprival of the right to participate in the auction, and cases ineligible for a refund of advance payment.
In case of a successful auction, what is the minimum fee applicable to the property auction service contract in Vietnam?
Pursuant to Clause 1 Article 3 of Circular 45/2017/TT-BTC as amended by Clause 1 Article 1 of Circular 108/2020/TT-BTC) as follows:
Fee bracket
1. Fee bracket applicable to a property auction contract in case of successful auction is defined as follows:
a) Minimum fee: VND 1,000,000 per contract;
b) Maximum fee equivalent to each bracket of property value by starting prices prescribed in Appendix I, II issued herewith, but not exceeding VND 400,000,000 per contract.
2. Auction fees prescribed in Clause 1 of this Article excludes: VAT and the property auction costs as prescribed in clause 2 Article 66 of the Law on Property Auction.
3. In case of unsuccessful auction, the seller must pay to the auction company for the property auction costs as prescribed in clause 2 Article 66 of the Law on Property Auction under the auction contract.
4. The seller shall come into an agreement with an auction company on fee and specific auction expenses and specify it in an auction contract according to the results of auction company selection and regulations on auction fees in accordance with the Law on Property Auction. The seller shall decide the specific auction remuneration within the fee bracket as prescribed by the Ministry of Finance in this Circular but not exceeding the maximum and not less than the minimum of the bracket of asset value by starting price as specified in Appendix I and II issued herewith.
5. Within 20 working days from the date on which the closing day of auction, the seller must pay to the auction company for the fee and the property auction costs as prescribed in clause 2 Article 66 of the Law on Property Auction; unless otherwise agreed upon by the parties or prescribed by law.
Thus, in case of a successful auction, the minimum fee applicable to the property auction service contract in Vietnam is VND 1,000,000.
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