Some Common Disputes In Land Use Right Transfer Contracts in Vietnam

Currently, land disputes account for a significant proportion of administrative and civil disputes often accepted by competent People’s Courts. with the desire to give some overview of disputes in the transfer of land use rights, Lac Duy & Associates will in turn send you articles related to this field.

In the beginning of this series of articles, we quote, summarize and send to readers Section 2 Part 2 of Resolution No. 02/2004/NQ-HDTP guiding a number of problems when resolving disputes over land use right transfer contracts effective from September 21, 2004, specifically  as follows:

1. Disputes over land use right transfer contracts established before July 1, 1980 (the date on which the Government Council is now the Government issued Decision No. 201/CP on the unified management of land and strengthening the management of land throughout the country) which after October 15, 1993 arises disputes

This dispute can be resolved as follows:

– Where the contents and forms of the contract are in accordance with the provisions of law at the time of conclusion of the contract.

• If the transferee has received the land, the court shall recognize the contract, commance the parties to perform the contract obligations and carry out procedures for transferring land use rights. If the land recipient has not paid enough money to the party with the land, he/she must pay the transferor the missing amount according to the actual land price on the market at the time of first-instance trial.

• If the transferee has paid in full but has not received the land and the transferor still manages, uses or has not yet built the architectural works on such land, the parties must perform the obligations under the contract, unless otherwise agreed upon by the parties.

Where the transferor has made a house or has no conditions to assign the land to the transferee, the court may, depending on the specific case, cancel the contract and commion the transferor to pay the transferee the money received at the actual land price on the market at the time of first-instance trial.

– Where the contents of the contract are in accordance with the provisions of law but the form of the contract is inconsistent with the provisions of law at the time of conclusion of the contract.

• If the parties have not yet performed their contract obligations, the courts shall declare the contracts void and cancel the contracts.

• If the transferee has paid the full amount of land transfer; if the transferor has assigned the entire land area, the court shall recognize the land transfer contract. In case the transferee pays part of the land transfer, the new transferor assigns part of the land area, such contract may be recognized based on the land area received. If the contract is recognized in case the transferor’s land area is valued at greater than the amount they have received, the court shall commance the transferee to pay the transferor the difference between the amount paid by the transferee compared to the actual land area they received at the time of conclusion of the contract according to the value land use rights are calculated at market prices at the time of first-instance trial. At the same time, the parties must apply procedures for transfer of land use rights to the land area received by the transferee. In case the transferee has delivered an amount greater than the value of the received land area, but the court only recognized the contract corresponding to the land area they have received, the transferor must pay the received amount exceeding the value of the assigned land area calculated according to the value of land use rights at the market price at the time of consideration first-instance trial.

– For cases guided at Points a and b, Sub-section 2.1 of Section 2 of This Section 2, if the transferor has received money from the transferee but has not yet assigned the land to them but such land has been recovered by the State for public use and compensated the transferor, the court shall declare the contract void and cancel the contract copper. The settlement of consequences of the void contract is carried out in accordance with the guidance in Point c of sub-section 2.3 of this Section 2.

– If a conditional land use right transfer contract has occurred or has been performed, such contract may be settled according to the guidance at Points a and b of Sub-section 2.1 of this Section 2.

– Land use right transfer contracts in which all or part of the contract violates law or are contrary to social ethics shall be void in whole or in part and the settlement of legal consequences of the void contract shall comply with the provisions of Article 137, Article 146 of the Civil Code and the guidance in Point c of sub-section 2.3 of this Section 2.

The settlement of disputes over land use right transfer contracts was established from July 1, 1980 (the date the Government issued Decision No. 201/CP) to before October 15, 1993 (the effective date of the Land Law 1993)

The law of this period prohibits the purchase and sale of land transfer soup in any form; therefore, when there is a dispute over the land use right transfer contract, the court shall settle as follows:

– In principle, the land use right transfer contract established between July 1, 1980 and before October 15, 1993 is an unlawful contract; therefore, if there is a dispute that the land use right transfer contract has not been performed, the court shall cancel the contract because the contract is void. The settlement of consequences of a void contract is made in accordance with the guidance in sub-section 2.3 of this Section 2.

– If the land use right transfer contract has been performed, the court shall recognize the contract in the following cases:

• The transferee has been granted the land use right certificate by the competent People’s Committee in accordance with the law on land;

• In case the land has not been granted the land use right certificate, but the transferee has completed the procedures for applying for the land use right certificate at the competent People’s Committee, the People’s Committee has authorized the transfer;

• The transferee has built houses, architectural works, planted perennial trees, invested in production and business without violating the planning regulations and the transferor shall not object when the transferee of land use right builds houses, architectural works, grows perennial crops, invests in production and business on that land.

The settlement of disputes over land use right transfer contracts was established from the latter 15/10/1993

– Conditions for recognition of land use right transfer contracts: According to the provisions of Article 131, things from Article 705 to Article 707 and Article 711 of the Civil Code, Clause 2, Article 3, Article 30, Article 31 of the Land Law 1993 and Clause 1, Article 106, Point b, Clause 1 of Article 127 , Clause 1, Article 146 of the Land Law 2003, the courts shall only recognize land use right transfer contracts when such contracts fully meet the following conditions:

• The participants enter into contracts for transfer of land use rights capable of civil acts;

• The participants enter into contracts for transfer of land use rights completely voluntarily;

• The purposes and contents of the land use right transfer contract are not contrary to law and social ethics;

• Transferred land has been granted land use right certificates by competent agencies under the Land Law 1987, the Land Law 1993, the  Land Law 2003;

• The land use right transferor must be eligible for transfer and the transferee must meet the conditions for receiving the transfer in accordance with the provisions of law;

• Land use right transfer contracts shall be made in writing certified by the State Notic or authenticed by competent People’s Committees.

– Determining that the land use right transfer contract does not fully meet the conditions guided at Point a of sub-section 2.3 of this Section 2.

• For contracts concluded before July 1, 2004, in violation of the conditions guided at Point a.4 of Sub-section 2.3 of this Section 2, but there has been one of the papers on land use rights prescribed in Clauses 1, 2 and 5, Article 50 of the Land Law 2003, which arises disputes, if from July 1, 2004 there is a request for the court to settle, it shall not be considered void contract due to violation of this condition.

• For land use right transfer contracts which at the time of conclusion violate the conditions guided at Points a.4 and a.6, Sub-section 2, These 3 section 2, but then granted land use right certificates or one of the papers specified in Clauses 1, 2 and 5, Article 50 of the Land Law 2003, which a dispute arises and from July 1, 2004, requests the court to settle, it shall not be considered void contract due to violation of this condition.

• For land use right transfer contracts in violation of the conditions guided at Points a.4 and a.6 of Sub-section 2.3 of section 2 of this Section 2, if after the performance of the transfer contract, the transferee has planted perennial trees, has made a solid house … and if the transferor does not object nor is it handled by competent state agencies in accordance with the State’s regulations on handling of administrative violations in the field of land, the courts shall recognize the contracts. If the transferee makes only one part of the land, the court shall recognize the part of the contract for transfer of the right to use the land with houses and cancel the contract for the remaining land area, forcing the transferee to return the land to the transferor. , except where the delivery does not guarantee the purpose of use for both parties to the contract, and commion of the parties to pay each other the difference.

– The settlement of consequences of the land use right transfer contract is void.

• When determining that the land use right transfer contract is void, depending on each case the court applies the provisions of the corresponding law from Article 136 to Article 138, from Article 140 to Article 145 and Article 146 of the Civil Code to determine the time limit for requesting the court to declare the land use right transfer contract void and handle the consequences of the disabled land use right transfer contract.

• Determination of errors, determination of liability for damages: The determination of errors, determination of liability for compensation for damage shall comply with the guidance at Points a and b, Section 2.4, Section 2, Part I of Resolution No. 01/2003/NQ-HDTP of April 16, 2003 of the Judges’ Council of the Supreme People’s Court “Guiding the application of law in the settlement of certain types of civil, marriage and family disputes”.

• Determine the damage.

+ When declaring the land use right transfer contract void, the court should determine the damage including: The amount of money that the transferor must spend to restore the original state of the land area due to the transferee’s destruction of the land; the amount of money that the transferee has invested for renovation increases the value of land use rights, the value of works, properties, perennial trees … on the soil. Where the land use right transfer contract has no other agreement on the application of penalties for breach of contract and compensation for damage specified in Article 379 of the Civil Code to secure the contract, the damage shall also include the difference in the value of land use rights agreed upon by the parties with the value of the right to use. land at the time of first-instance trial or other damages, if any.

+ In order to properly determine the a above-said damages, the courts must assess the value of land use rights and determine land damage as follows:

If the involved parties cannot reach agreement on the value of land use rights and the value of damage, the courts shall request the specialized agencies to assess or issue decisions to establish the price councils. The value of land use rights is determined according to the market price transferred in the locality where the land is in dispute for each type of land at the time of first-instance trial.

In case provincial-level People’s Committees provide for specific land use right value in accordance with the transfer price of land use rights at local market prices or legally operating real estate transaction centers, the prices of land use right transfer transactions shall be posted at the locality at the time of first-instance trial. , the courts may base on the prices prescribed by the People’s Committees or the listed prices of transaction centers to determine the value of land use rights, without necessarily establishing a price council. In this case, there must be grounds for determining the land use right price prescribed by the People’s Committee or the land use right price listed by the real estate transaction center is fully consistent with the market price at the time of first-instance trial.

+ Responsibility to bear expenses for the edible shall bear expenses corresponding to their part of their obligations. Where the involvediganted requests for re-evaluation, the requesting person must advance the costs for the re-evaluation and the court shall decide who shall bear the price depending on the trial results.

The above is the content of Lac Duy & Associates‘ first article regarding disputes over land use right transfer contracts. Please kindly refer to our above article.

In case of questions or need assistance related to disputes over land use right transfer contracts, readers can contact Lac Duy & Associates for timely assistance at:

• Phone: + 84 (28) 3622 1603
• Email: info@lacduy-associates.com or lacduy@lacduy-associates.com

Best regards.