Mortgage of LURC is understood as the mortgage of the Certificate of House and Land Use Right to borrow money from the bank. Thus, when mortgaging a LURC in Vietnam, people should note the following 03 conditions.
Article table of contents
Vietnam: 03 conditions to mortgage LURC for a loan from the bank (Illustration)
According to Article 188 of Vietnam's Land Law 2013 and Articles 118 and 119 of Vietnam's Law on Housing 2014, people who want to mortgage their LURC must meet the following conditions for mortgage of land use rights and housing rights:
First: Conditions to mortgage land use rights
According to Clause 1, Article 188 of Vietnam's Land Law 2013, land users may exercise the rights to exchange, transfer, lease, sublease, inherit, donate or mortgage land use rights and contribute land use rights as capital when meeting the following conditions:
- Having the certificate (except the case prescribed in Clause 3, Article 186 and the case of receiving inheritance prescribed in Clause 1, Article 168 of this Law);
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The land is dispute-free;
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The land use rights are not distrained to secure judgment enforcement;
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Within the land use term.
Second: Conditions to mortgage housing
According to the provisions of Clause 1, Article 118 of Vietnam's Law on Housing 2014, any house regarding transactions in housing sale, lease purchase, gifting, mortgage, or capital contribution shall meet the requirements below:
- There is the Certificate as prescribed, except for mortgage of a house to be formed in the future (which is a house in the process of investment and construction and has not been tested for acceptance and put into use);
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There is no dispute, complaint, or proceedings for homeownership; the term of homeownership has not expired if the house is under a term contract on housing; (Note: does not apply to the case of buying, selling or renting-purchase houses in the future)
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The house is not distrained; (Note: does not apply to the case of buying, selling or renting-purchase houses in the future)
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There is no decision on land revocation, notification of housing clearance or demolishment issued by the competent agency.
Third: Conditions for mortgagee
According to the provisions of Clause 1, Article 119 of Vietnam's Law on Housing 2014, people mortgaged their houses must meet the following conditions:
- He/she is the homeowner, or the person permitted and authorized by the homeowner to enter into housing as prescribed in this Law and law on civil;
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If the entity is a person, he must have full civil capacity to enter into transactions in housing as prescribed in law on civil;
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If the entity is an organization, it must have legal personality, except for the organization giving house of gratitude.
Thus, according to the above regulations, when mortgaging the Red Book, people must meet the above 03 conditions. In case a person has a separate house and wants to mortgage both the house and the land, the mortgage can only be exercised if the land use right meets the conditions for mortgage of the land use right and the house must satisfy the following conditions: of housing when mortgaged.
