Vietnam: How to handle the land parcel on lease or under mortgage upon the government's land expropriation?

1. When a land parcel on lease or under mortgage is expropriated by the government for national defense or security purpose and socio-economic development in the national or public interest, the land rent contract or the contract for mortgage of land use right shall terminate. The rights and obligations regarding the land use between the parties in the land rent contract or the mortgage contract shall be settled pursuant to the legislation on civil affairs.

2. When a land parcel on lease is expropriated pursuant to Point a, b, c, d, g, h and i, Clause 1, Article 64 of the Land Law of Vietnam, the land rent contract shall terminate and the land expropriation shall proceed in the following manner:

- The government expropriates the land parcel whose lessor has violated the legislation on land. The lessor shall make amends to the renter pursuant to the legislation on civil affairs;

- The government expropriates the land parcel whose renter has violated the legislation on land. The renter shall make amends to the lessor pursuant to the legislation on civil affairs;

- If the transgressor of the legislation on land is neither the lessor nor the renter, the government shall expropriate the land parcel and the transgressor shall be held liable to make amends to the affected entities as per regulations.

3. If the right of use of a land parcel that the government expropriates pursuant to Point a, b, c, d, g, h and i, Clause 1, Article 64 of the Land Law is under mortgage, the contract for mortgage of land use right shall terminate and the mortgagee shall repay the loan to the mortgagor as per the legislation on civil affairs and other relevant regulations.

4. The government shall expropriate a land parcel being leased or mortgaged by land user(s) who pass(es) away without an inheritor and shall be responsible for settling the rights and obligations concerning such land parcel as per the laws. In such event, the land rent contract or the mortgage contract shall terminate while the land use right is handled in the following manner:

- If the land parcel is on lease, the government shall continue leasing it to the current renter for the remaining duration of the land rent contract signed;

- If the land use right is under mortgage, it shall be handled as per the legislation on secured transactions.

-Ngoc Duyen-

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