The land user has the right to mortgage their Certificate of Land Use Rights (commonly known as mortgaging the Red Book) as a security measure. So, during the mortgage period, does the land user have the right to change the land use purpose?
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Is it allowed to change the land use purpose while having a mortgaged red book? (Illustrative photo)
According to Article 317 of the Civil Code 2015, mortgaging property is when the mortgagor uses their property to secure the performance of an obligation without transferring the property to the mortgagee. The mortgagor still has the right to exploit the uses, enjoy the yields, and benefits from the mortgaged property, except in cases where the yields and benefits are also mortgaged under the agreement. However, the mortgagor is not allowed to sell, replace, exchange, or gift the mortgaged property, except in cases where it is circulating goods in the process of production, business, or with the consent of the mortgagee or by law.
Regarding the change of land use purpose, Article 57 of the Land Law stipulates that the land area for which the use purpose is to be changed must, if required by the state authority, obtain permission from the competent authority. When changing the land use purpose, the land user must fulfill financial obligations as prescribed by law. The land use regime, rights, and obligations of the land user will be applied according to the type of land after the change of use purpose. Cases that require permission from the competent state authority to change the land use purpose include:
- Converting rice cultivation land to perennial crop land, forest land, aquaculture land, salt production land;- Converting other annual crop land to brackish water aquaculture land, salt production land, aquaculture land in the form of ponds, lakes, and lagoons;- Converting special-use forest land, protective forest land, production forest land to use for other purposes within the agricultural land group;- Converting agricultural land to non-agricultural land;- Converting non-agricultural land allocated by the State without the levy to non-agricultural land allocated by the State with the levy or leased land;- Converting non-agricultural land that is not homestead land to homestead land;
Converting land for building career structures, land used for public purposes with business purposes, non-agricultural production, and business land that is not commercial land to commercial land; converting commercial land, land for building career structures to non-agricultural production establishment land.
Thus, if the land user wants to change the land use purpose in cases requiring permission from the competent authority as mentioned above, they must first obtain approval from the competent authority. Once approved by the competent authority, the land user can negotiate with the mortgagee about changing the land use purpose of the mortgaged plot. Whether the mortgagee agrees to the change or not depends on the agreement between the parties. If the parties successfully reach an agreement and the mortgagee consents to the change, the mortgagor can proceed with the procedures for changing the land use purpose according to legal provisions.
Thuy Tram
