If I lease mortgaged property without notify the mortgagee, will my lease contract terminate in Vietnam?

If I lease mortgaged property without notify the mortgagee, will my lease contract terminate in Vietnam?

Article 34 of Decree 21/2021/ND-CP regulates Mortgage relating to leased properties, lent properties, as follows:

1. In case leased properties or lent properties are used for mortgaging, mortgagors must inform mortgagees.

2. In case mortgaged properties that are being leased or lent are dealt with according to Article 299 of the Civil Code, lease agreements and loan agreements shall not be terminated, and hiring parties and borrowing parties shall continue to hire and borrow the properties until the agreements expire.

3. In case mortgage has entered into effect against third individuals and mortgagors lease or lend mortgaged properties without informing mortgagees, lease agreements and loan agreements shall be terminated at the time in which mortgaged properties are dealt with. Rights and obligations between mortgagors and hiring parties, borrowing parties shall be dealt with according to property lease agreements, property loan agreements, the Civil Code and other relevant law provisions.

Thus, the mortgage measure has an adverse effect on the third party, if you use the mortgaged property to rent but do not notify the mortgagee, your lease contract will terminate at the time in which mortgaged properties are dealt with.

If I lease mortgaged property without notify the mortgagee, will my lease contract terminate in Vietnam? (Image from the Internet)

If I don't repay the loan on time, can the bank handle the mortgaged property, which is a car in Vietnam?

According to Article 299 of the 2015 Civil Code, cases of realization of collateral are specified as follows:

1. An obligator fails to perform or perform not as agreed an obligation when it falls due.

2. An obligator must perform the secured obligation before time limit due to his/her violation against the obligation as agreed or prescribed by law.

3. Other cases as agreed by the parties or prescribed by law.

Article 303 of the 2015 Civil Code stipulates methods of realizing collateral, accordingly:

1. The securing party and the secured party may agree any of the following methods of realizing collateral:

a) Put collateral up for an auction;

b) The secured party sells collateral itself;

c) The secured party accepts the collateral as substitutions for the performance of obligations of the securing party;

d) Other methods.

2. If there is no agreement on methods of realizing collateral as prescribed in Clause 1 of this Article, the collateral shall be put up for auction, unless otherwise prescribed by law.

According to this Article, when you do not fulfill your debt repayment obligations, the mortgaged assets will be handled by the bank in the above method according to the law in Vietnam.

What is settlement of mortgaged properties are subjects of nullified civil transactions in Vietnam? 

Pursuant to Article 36 of Decree 21/2021/ND-CP regulating resolutions for cases where mortgaged properties are subjects of nullified civil transactions, as follows:

1. In case properties that are subjects of nullified civil transactions are mortgaged and have been transferred to mortgagees in cases specified under Clause 1 and Clause 2 Article 133 of the Civil Code, mortgage agreements shall not be nullified; rights and obligations of relevant parties shall conform to Clause 3 Article 133 of the Civil Code.

2. Transfer of mortgaged properties specified under Clause 1 of this Article refers to when mortgagors do not deliver mortgaged properties while mortgagees have obtained certificates for mortgaged properties as agreed upon or while mortgagees have adopted other necessary practical measures to prevent mortgagors from violating obligations under Article 320 of the Civil Code.

With the above regulations in Vietnam, mortgaged properties are subjects of nullified civil transactions will be resolved according to the above regulations.

Best regards!