The validity of the contract for the donation of land use rights in Vietnam

The first viewpoint argues that the gift contract between Mr. H and Mrs. N for the LUR should be recognized, with the following reasons:

The gift contract for the LUR between Mr. H and Mrs. N is a joint property of the couple. At the time of gifting, the land had been granted a Certificate of Land Use Right and Ownership, and there were no disputes over the land. The land was eligible for gifting, and all parties had the legal capacity to perform civil acts, were not coerced, and acted voluntarily. The purpose and content of the contract did not violate the prohibitions of the law and were not contrary to social ethics. The contract was executed in written and notarized form and was registered and effective from the registration date at the land registration agency, in accordance with Article 459 of the 2015 Civil Code and Article 3 of the 2013 Land Law.

Furthermore, according to the appointment letter dated May 7, 2021, from the Branch of the District Land Registration Office, the Branch would provide the result to Mrs. N on May 20, 2021. However, Mr. H only filed a lawsuit at the court and requested to suspend the issuance of the Certificate of Land Use Right and Ownership to Mrs. N on May 31, 2021. Therefore, the delay in the specialized agency's procedures compared to the appointment letter is the fault of the land management agencies, not Mrs. N. Hence, the gift contract for the LUR between Mr. H and Mrs. N is valid and should be recognized.

The second viewpoint, which is also the author's viewpoint, considers that the gift contract for the LUR between Mr. H and Mrs. N was indeed signed. The content and form of the gift contract for the LUR indicate that all parties had the legal capacity to perform civil acts at the time of entering into the contract. The contract did not violate the law or social ethics. The content and form of the transaction were in accordance with Article 117 and Article 119 of the 2015 Civil Code. The Reception and Result Department of the Branch of the District Land Registration Office has processed the file but has not paid the taxes yet, so it cannot be claimed that the gift contract for the LUR between Mr. H and Mrs. N has been registered.

According to Article 401, Clause 1 of the 2015 Civil Code, the effectiveness of a concluded contract starts from the time of conclusion, except for other agreements or different provisions in relevant laws. Article 188, Clause 3 of the 2013 Land Law stipulates that "3. The transfer, assignment, lease, sublease, inheritance, gift, and mortgage of land use rights and capital contribution with land use rights must be registered at the land registration agency and take effect from the time of registration in the land register." Therefore, registration in the land register means that all necessary procedures, such as tax payment to the State Treasury, must be completed before it can be considered registered.

However, the gift contract for the LUR between Mr. H and Mrs. N was contrary to Mr. H's intention. When Mr. H discovered that Mrs. N intended to misappropriate his joint property by using the LUR as collateral for a bank loan, he requested that Mrs. N cancel the contract, but she refused. Mr. H filed a lawsuit, and at the same time, the gift contract for the LUR between him and Mrs. N had not fulfilled the obligation of tax payment and registration, so it has not taken effect.

In the contract, there is no provision regarding using the LUR as collateral for a bank loan. However, considering the parties' intention to use the gift contract for the LUR for Mrs. N to borrow money from the bank, the condition for the effectiveness of the gift contract for the LUR should be that Mrs. N borrows money from the bank. But since Mrs. N did not fulfill this agreement, Mr. H has the right to request a modification or cancellation of the contract.

Furthermore, according to the legal provisions, a gift contract must meet certain conditions. The necessary condition is that it must be notarized and authenticated, while the sufficient condition is that the ownership right must be registered. However, the gift contract between Mr. H and Mrs. N was only notarized and not registered. Recognition is only possible in cases where the contract cannot be fulfilled due to objective obstacles. But in this case, on May 7, 2021, Mr. H and Mrs. N signed the gift contract for the LUR, and on May 25, 2021 (19 days later), Mr. H sent a letter to the Branch of the District Land Registration Office to oppose and file a lawsuit. Mrs. N, as the recipient of the LUR, has not received the property yet and has not fulfilled the financial obligations (taxes,registration fees, etc.) required for the registration of the LUR. Therefore, the gift contract for the LUR between Mr. H and Mrs. N has not met the necessary and sufficient conditions for recognition and should be considered invalid.

In addition, there are rubber trees on the land, but when the gift contract for the LUR was made, the parties did not include these assets in the contract. Therefore, the gift contract for the LUR is not in the correct order or procedure, and cannot be enforced. Therefore, there is sufficient basis to cancel the gift contract for the LUR between Mr. H and Mrs. N.

Given the above difficulties, to unify the application of the effectiveness of the gift contract for the LUR, the author proposes that the Supreme People's Court issue guidelines on the effectiveness of the gift contract for the LUR to be applied uniformly in practice.

We look forward to receiving opinions from our readers.

MSc. LE VAN QUANG (Head of Office 9, People's Procuracy of Binh Phuoc province)

Source: "Tạp chí Tòa án nhân dân điện tử" (Electronic People's Court Magazine)