Is it possible to transfer land use rights while mortgaged at the bank in Vietnam?

Is it possible to transfer land use rights while mortgaged at the bank in Vietnam?

According to Article 320 of the 2015 Civil Code, the obligations of mortgagor are as follows:

1. Transfer documents related to the mortgaged property, unless otherwise agreed or prescribed by law.

2. Take care of and preserve the mortgaged property.

3. If the mortgaged property is in danger of losing its value or depreciating in value due to its exploitation, to take necessary remedial measures, including ceasing the exploitation of the mortgaged property.

4. When the mortgaged property is damaged, the mortgagor is obligated to, within a reasonable period, repair or substitute another property with equivalent value, unless otherwise agreed.

5. Provide information about the actual condition of the mortgaged property to for the mortgagee.

6. Deliver the mortgaged property to the mortgagee for realization in one of the cases prescribed in Article 299 of this Code.

7. Notify the mortgagee of any third person rights with respect to the mortgaged property (if any). In the case of failure to provide such notice, the mortgagee shall have the right to cancel the contract of mortgage of property and demand compensation for damage or the right to maintain the contract and agree on the rights of the third person with respect to the mortgaged property.

8. Do not sell, exchange or give the mortgaged property, except in the cases provided in Clauses 4 and 5 of Article 321 of this Code.

Thus, because the land use rights are mortgaged, the exercise of the land owner's rights is limited; The land user does not have right to transfer that land use right, unless the bank agrees in Vietnam.

Is it possible to transfer land use rights while mortgaged at the bank in Vietnam? (Image from the Internet)

If the debt is overdue and the seller cannot pay the bank, what will be handled in Vietnam?

Article 303 of the 2015 Civil Code stipulates the methods of realizing collateral as follows:

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.

In addition, Article 307 of the 2015 Civil Code stipulates the payment of the sum of money obtained from the realization of collateral as follows:

1. The sum of money obtained from the realization of the collateral after deducting from the cost of preservation, capture and realization of the collateral shall be paid in order of priority specified in Article 308 of this Code.

2. Where the sum of money obtained from the realization of the collateral, after deducting from the cost of preservation, seizure and realization of the collateral is greater than the value of secured obligations, the difference amount must be paid to the securing party.

3. Where the sum of money obtained from the realization of the collateral, after deducting from the cost of preservation, seizure and realization of the collateral is less than the value of secured obligations, part of the unpaid obligations are defined as unsecured obligations, unless the parties otherwise agree additional collateral. The secured party may request the obligor to perform the unpaid secured obligations.

According to the above regulations in Vietnam, when the land owner cannot repay the bank, the land use rights you are planning to transfer will be handled according to the agreement between the bank and the mortgagee and according to the provisions of the Law. 

Best regards!