There is a certificate of land use right, the transfer contract is still invalid in Vietnam?

Specifically, in the appellate civil judgment No. 103/2018/DS-PT dated May 18, 2018 on a dispute over the property being distrained land use rights, the content is as follows:

“Mrs. Le Thi Bach B has a loan to Mr. Tran Trung X and Mr. X has sued Ms. B to the People's Court of District C. On May 23, 2011, the People's Court of District C heard the Property loan contract dispute between Mr. X, Ms. B, Ms. T and forced Mrs. B and Ms. T to pay Mr. X the amount of 300,000 VND. Mr. X then appealed and was appellate trial by the People's Court of An Giang province on September 22, 2011. On April 25, 2011, Ms. Le Thi Bach B made a contract to donate land use rights with an area of ​​5,336m2 to Mr. T and he was granted a land use right certificate. On February 14, 2012, Mr. T entered into a contract to transfer the land use rights to Mr. P, Mrs. N with an area of ​​2,503m2 (located in the land area of 5,336m2), Mr. P and Mrs. N have been granted a certificate of land use right by the People's Committee of District C.

After the judgment took legal effect, Mr. X requested the judgment enforcement and the District C's Civil Judgment Execution Sub-department distrained Ms. B's property, including the land of Mr. P and Ms. N. Now Mr. P, Ms. N asked the Court to recognize the land use rights granted to you by the People's Committee of District C, if not, Mr. Tran Van T and Ms. Le Thi Bach B must return to him VND 200,000,000 at the price. buying."

The People's Court of An Giang province said: The contract for the donation of the above land use rights between Mr. T and Mrs. B is against the provisions of the law, so it is invalidated, leading to the contract for the transfer of land use rights between Mr. T and Mrs. B. T with Mr. P and Mrs. N are also invalidated.

Although the real estate transferee has been granted a certificate of use right, the judgment enforcement agency still distrains and handles the property according to the transferor's judgment, which confuses many people. There are many reasons leading to this situation, among them is that when the trial judgment takes effect, the person with the right to request judgment enforcement has not exercised his/her rights or the judgment enforcement agencies have not promptly taken preventive measures and notified relevant agencies. At that time, Ms. Le Thi Bach B had the right to give Mr. T the right to use the land. Since then, Ms. P and Mr. N received the transfer of the property, which is Mr. T's land use right, in good faith and lawful.

However, according to the provisions of Joint Circular 14/2010/TTLT-BTP-TANDTC-VKSNDTC and more specifically in Decree 62/2015/ND-CP, the following regulations: 

Article 24. Distraint of assets for judgment enforcement

1. From the time the judgment or decision takes legal effect, if the judgment debtor converts, donates, sells, transfers, mortgages or pledges property to another person without using the proceeds for judgment enforcement and there are no other assets or other assets that are insufficient to satisfy the judgment enforcement obligation, such property shall still be distrained and handled for judgment enforcement, unless otherwise provided for by law. When distraint of property, if there is a dispute by another person, the enforcer shall notify the involved party or the disputing person to comply with the provisions of Clause 1, Article 75 of the Law on Civil Judgment Execution.

         …

The donation contract between Ms. Le Thi Bach B and Mr. T took effect on June 28, 2011 when the People's Committee of District C granted the certificate of land use rights to Mr. T after the first-instance judgment was issued on May 23, 2011 to hear the dispute over a property loan contract between Mr. X, Ms. B and Ms. T. The Court applied Article 503 of the 2015 Civil Code of Vietnam then the gift contract between Mrs. B and Mr. T is void. As a result, the land use right transfer contract between Mr. T and Mr. P and Mrs. N is also invalid.

It can be seen that the legal provisions are intended to protect the interests of the judgment debtor and avoid the dispersion of the judgment debtor's assets, but at the same time, it puts great risks for honest transferees like Mr. P and Ms. N.

Therefore, in order to ensure compliance with the decision of the effective judgment, avoid the dispersion of assets and transfer the risk to an honest third party, strict sanctions are applied or when If there is a judgment, the judgment creditor should quickly transfer the file to the judgment enforcement agency requesting the distraint and handling of assets.

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