10 cases of deregistration of security interests in Vietnam

10 cases of deregistration of security interests in Vietnam (Internet image)

1. What is registration of security interest?

According to Clause 1, Article 3 of Decree 102/2017/ND-CP,  registration of security interests refers to the recording in a security interest register or entry into a database on security interests by a security interest registry of the use of assets by the grantor to secure the secured party’s performance of an obligation;

- Register refers to a cadastral register or a register of mortgage of off-the-plan property on land in case of security interest in land use rights or property on land, Vietnam aircraft register in case of security interest in aircrafts, Vietnam sea-going ship register in case of security interest in sea-going ship or another register as per the law;

- Security interest database refers to a collection of information on registered security interests which are kept at a registry;

(Clause 2, 3, Article 3 of Decree 102/2017/ND-CP,)

2. Cases of deregistration of security interests in Vietnam

Specifically, in Article 21 of Decree 102/2017/ND-CP, an applicant shall submit an application for deregistration in any of the following cases:

(1) The secured obligation is terminated;

(2) The registered security interest is cancelled or replaced with another one;

(3) Collateral as a whole is replaced with other ones:

(4) Collateral is completely disposed of;

(5) Collateral is destroyed as a whole; property on land is collateral being demolished or seized under a competent regulatory agency's decision;

(6) There is a court’s judgment and decision or arbitrator’s decision on cancellation of security interest or declaration of null and void security interest that becomes legally effective;

(7) Unilaterally terminating security interest or declaring termination of security interest in other cases as per the law;

(8) Deregistration of mortgage of property rights arising out of housing purchase contract in case of changing the registration of mortgage as per the law;

(9) The civil enforcement agency or bailiff office has already seized or disposed of collateral;

(10) As agreed upon by the involved parties.

3. Validity time of security interest registration in Vietnam

Validity time of security interest registration according to the provisions of Article 5 of Decree 102/2017/ND-CP, specifically as follows:

The registration of security interests in land use right, property on land, aircraft, or seagoing ship will become valid when the registry keeps a record in register.

The registration of security interests in other personal/movable property will become valid when it is updated in the security interest database.

- The registration of change due to addition of collateral without any new security agreement or addition of secured obligation and parties’ failure to reach agreement on obligations arising in the future at the time of concluding agreement will become valid  when it is updated in the register or security interest database.

- The following cases do not change the time when the registration of security interests becomes valid:

+ Changing the registration of mortgage of property rights arising out of housing sale contract to the registration of mortgage of off-the-plan housing or changing the registration of mortgage of property rights arising out of housing sale contract to the registration of mortgage of off-the-plan housing as set forth in the Law on Housing, the registration of security interests will become valid from the time of registration of mortgage of property rights arising out of housing sale contract;

+ Changing registration prescribed in Clauses 1, 2, 4 and 5 Article 18 of Decree 102/2017/ND-CP.

Thanh Rin

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