22/07/2022 10:20

Without the signature of children over 15 years old, is the mortgage contract of land use right in Vietnam?

Without the signature of children over 15 years old, is the mortgage contract of land use right in Vietnam?

Usually, the family's big transactions are done by parents, such as mortgaging the family's land use right to borrow money from the bank...So, when the parents perform the mortgage contract on their own, they don't have the land use right. If the child's signature is over 15 years old, will the contract be declared invalid?

Specifically, in Judgment 03/2017/DS-ST  dated February 17, 2017 on the dispute over the land use right mortgage contract, according to which:

“On April 24, 2009, between the Bank for Agriculture and Rural Development of Vietnam, branch of Dak Nong province, transaction office D and Mr. Bui Xuan N and Ms. Ngo Thi Le N (who are the biological parents of Mr. A) signed a mortgage contract. Property number 240261032/TC to borrow the amount of VND 300,000,000. The substitutable property is the land use right of the land plot No. 415; 18;10a; 348; 542a; 543; 56; 75 belonging to map sheets 02, 05, 12 and 24, land use right certificate No. D0497188 issued by the People's Committee of Dak Mil district on October 19, 1994 to the household of Mr. Nguyen Xuan N.

When Mr. N and Mrs. N signed the mortgage contract, Mr. A was over 15 years old at that time but did not know, was not consulted, and did not have a written authorization to sign the mortgage contract. Therefore, he requested the Court to cancel the mortgage contract No. 240261032 and the attached mortgage contract appendix, and at the same time ask the Bank to return the land use right certificate No. D0497188 to Mr. Nguyen Xuan N's household. ".

The court found that when signing the property mortgage contract No. 240261032/TC and the contract addendum 5300LAV201003264/HDTD, the children of Mr. Bui Xuan N and Ms. Ngo Thi Le N did not have written authorization for them to use the household's property as collateral to secure the loan amount of VND 300,000,000. Therefore, the content of the above mortgage contract does not comply with the provisions of the law, so it is partially invalidated.

However, the members of Mr. Bui Xuan N's household could not reach an agreement on the division of common property in the household to determine the assets of the members. Therefore, there is no basis to declare invalid a part of the content of mortgage of use rights in the common property of the household. It is necessary to declare null and void the entire content of the property mortgage contract No. 240261032/TC.

Compared with the provisions of law at the time of the transaction, the Civil Code 2005 of Vietnam has provisions.

“Article 108. Common property of households

Household's common property includes the right to use land, the right to use forests and planted forests of the household, property contributed by members, jointly created or given as a gift, jointly inherited and other properties that the members agree are common property of the household.

“Article 109. Possession, use and disposition of common household property

1. The members of the household possess and use the common property of the household according to the agreed method.

2. The disposition of property being the means of production or common property of great value of a household must be agreed upon by all members who are full fifteen years of age or older; for other types of common property, the consent of a majority of members aged full fifteen years or more must be agreed.”

Therefore, for land use rights granted collectively to households, transactions related to such land use rights, if made at the time the Civil Code 2005 is in force, must be approved by all members of the household over the age of 15. The consent can be through authorizing parents to represent transactions or through the signatures of each member in those transactions. When a transaction fails to satisfy the above-mentioned conditions, such transaction shall be invalidated in whole or in part, depending on the case, due to a violation of the prohibition of law as prescribed in Article 128 of the Civil Code 2005.

Specifically, the land use right mortgage contract will be partially void when the members of the household can agree on the division of the common property of the household. For example, the common land parcel allocated to a household has an area of ​​200m2, the members of the household including parents and two children agree to divide 50m2 each. Thus, the area of ​​​​100m2 of the couple's mortgage to the bank will still be valid. On the contrary, if the members of the household cannot agree on the division of common property, the mortgage contract on land use rights is completely invalid because it is not possible to determine the property portion of each member to have a basis for declaring an annulment. partial signal.

However, the current law has the following provisions: Article 212 of the Civil Code 2015 of Vietnam 

"Article 212. Joint ownership of family members

1. Property of family members living together includes property contributed and jointly created by members and other properties established as ownership in accordance with the provisions of this Code and other relevant laws. relate to.

2. The possession, use and disposition of common property of family members shall be done by the method of agreement. In case of disposing of property which is real property, registered movable property, or property which is the main source of income of the family, the consent of all family members who are adults with legal capacity must be obtained. fully civil, unless otherwise provided for by law."

Therefore, current regulations of Vietnam only require the consent of adult family members (from full 18 years old) with full behavioral capacity, and no longer require the consent of children on 15 years old as Civil Code 2005.

It can be seen that we often focus on having enough signatures of husband and wife in transactions, but ignore the mandatory requirement for signatures of children in the family, leading to invalidated transactions, for this reason, is not uncommon. Therefore, it is thought that households, as well as banks, need to be careful in transactions related to their common property to ensure that the transaction strictly complies with the provisions of the law, and avoid unfortunate invalidity.

Sang Nguyen

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