05 things to know about property auction service contracts in Vietnam

05 things to know about property auction service contracts in Vietnam (Internet image)

1. What is an property auction service contract?

In Clause 1, Article 33 of the Law on Property Auction 2016, the asset auction service contract is as follows:

A property seller shall sign a property auction service contract with a property auction organization to conduct property auction.

Such a contract shall be made in writing and must comply with the civil law and the Law on Property Auction 2016.

2. Responsibilities of participants in the signing of asset auction service contracts in Vietnam

In Clauses 2 and 3, Article 33 of the Law on Property Auction 2016, the asset auction service contract is as follows:

When signing the property auction service contract, the property seller shall provide the property auction organization with documents of title to prove his/her right to own, use or sell property in accordance with law and take responsibility before law for such documents.

The property auction organization shall check information on the right to sell property provided by the property seller, and is not responsible for the value and quality of the auctioned property unless this organization fails to adequately and accurately provide bidders with necessary information on the value and quality of the auctioned property under the property auction service contract.

3. Rights and obligations of the asset auction organization in Vietnam

Pursuant to Clause 4, Article 34 of the Law on Property Auction 2016, the rights and obligations of asset auction organizations are as follows:

- Rights and obligations of the property auction organization and property seller must comply with the property auction service contract, the Law on Property Auction 2016, civil law, and other relevant laws.

The property seller or property auction organization may unilaterally terminate the performance of the property auction service contract in accordance with the civil law before the property auction organization receives the bidder’s dossier for participation in auction, unless otherwise prescribed by law.

4. Right to cancel the asset auction service contract in Vietnam

Clause 6, Article 33 of the Law on Property Auction 2016,  the property seller may cancel the property auction service contract when having one of the following grounds:

- The auction is held by an organization without the property auction function or conducted by an individual other than an auctioneer, unless it is held by a property auction council;

- The property auction organization intentionally allows an unqualified person to participate in an auction who later becomes the winning bidder;

- The property auction organization commits one of the following acts: failing to publicly display information on property auction; failing to disclose information on property auction; improperly implementing regulations on the sale of auction dossiers or organizations registering for participation in auction; or impeding or restricting bidders from registering for participation in auction;

- The property auction organization colludes or is in cahoots with bidders during the auction, thus falsifying information on the auctioned property, auction dossier or property auction results;

- The property auction organization holds an auction at variance with regulations on auction forms and methods according to the rules of the auction, thus falsifying the property auction results.

5. Rules of an auction in Vietnam

Pursuant to Article 34 of the Law on Property Auction 2016 stipulates the auction regulations as follows:

- A property auction organization shall issue rules to be applicable to each auction before the date of public display of information on property auction.

- Rules of an auction must have the following principal contents:

+ Name of property or list of property items, quantity and quality of the auctioned property; place where the auctioned property is located; and documents of title proving the ownership or use right over the auctioned property;

+ Time and venue for checking the auctioned property;

+ Time and venue for selling auction dossiers;

+ Reserve price of the auctioned property, in case such price is publicized;

+ Money amount paid for buying auction dossiers, and advance payment;

+ Time, venue, conditions and method of registration for participation in auction;

+ Time and venue for holding the auction;

+ Form and method of auction;

+ Cases of deprival of the right to participate in auction, and cases ineligible for refund of advance payment.

Note: A property auction organization shall publicize the rules of an auction.

Ngoc Nhi

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