Selling land without selling houses in Vietnam

In the first-instance civil judgment No. 21/2019/DS-ST dated May 3, 2019 on disputes over land use rights and house ownership; Dispute over the contract for the transfer of land use rights and request for cancellation of land use right certificate with the following contents:

“ In 2006, Mr. Ch received the transfer of land plot No. 446, map sheet No. 09, area 397m2 from Mrs. A. At that time, there was a level 4 house on the land, brick wall, tole roof, area 107,9m2 built by Mrs. M (adopted son of Mrs. A). Because the house above has not been granted ownership, when making a land transfer contract, Ms. A and Mr. Ch do not show assets on the land.

After signing the contract, Ms. A still stays in the house. When he discovered that Mrs. M's family lived on the above land, Mr. Ch sued to ask Mrs. M to return the whole house and the above land plot. After that, disagreeing with Mr. Ch's claim, Ms. M kept the counterclaim requesting the Court to cancel the contract of land use right transfer."

The People's Court of Thu Dau Mot City, Binh Duong Province decided to suspend the trial for Mr. Ch's petition for a dispute over land use rights and house ownership against Ms. M. Acceptance Ms. M's lawsuit claim and Ms. A's independent claim on the dispute over the land use right transfer contract against defendant Mr. Ch. Ms. A has the right to manage and use the land area, attached to the land plot is the grade 4 house of Mrs. M.

When carrying out procedures for transferring land use rights (LURC), because there is no house on the land to be built later or the house has not been granted ownership, the information on the transfer contract and the LURC will not be shown. This leads to the dispute of the land use right transfer contract in which the parties do not transfer the ownership of the house and other assets attached to the land, which is quite common. There are many solutions for this situation such as the parties agreeing on the transfer of ownership of houses and other assets on the land and then adding information to the LURC or filing a lawsuit in Court to resolve it, but most The court will declare the land use right transfer contract invalid for various reasons such as mistake or object that cannot be performed.

In this case, the Court found that the house and the land plot were a unified, movable, inseparable block for transfer and sale. Because the house is solidly built, has a large area, the construction and stable living in the house are witnessed by many people. If only handing over the land use right but not the house, then the land belongs to one person but the house on the land belongs to another person. Failure to record the house attached to the land plot resulted in the land use right transfer contract between Ms. A and Mr. Ch being unenforceable and null and void right from the time the contract was signed.

The 2015 Civil Code of Vietnam provides:

Article 408. Invalidity of civil contracts due to impossibility of performing subject matter

1. If, immediately as from the time a contract is signed, it is impossible to perform the subject matter of the contract for objective reasons, the contract shall be invalid.

2. If, when entering into a contract, one party knew or should have known that it was impossible to perform the subject matter of the contract for objective reasons but failed to notify the other party which entered into the contract, the former party must compensate the latter party for damage, unless the latter party knew or should have known that it was impossible to perform the subject matter of the contract.

3. ...

When a court declares the transfer contract invalid, the parties must return to each other what they have received.

Article 131. Legal consequences of invalid civil transactions

1. An invalid civil transaction shall not give rise to, change or terminate any civil rights and obligations of the parties as from the time the transaction is entered into.

2. When a civil transaction is invalid, the parties shall restore everything to its original state and shall return to each other what they have received.

If the restitution is not able to make in kind, it may paid in money.

Courts often determine that the sale of a house but not the sale of land is a void contract even though there is an object that cannot be performed or a mistake. Therefore, in order to protect their own rights and interests, the transferee should pay attention when establishing real estate transactions to avoid unnecessary disputes later.

See some more judgments with the same content here .