[Vietnam] Is an unnotarized contract for buying land use rights invalid ?

Under Clause 3, Article 167 of the 2013 Law on Land of Vietnam on the right to exchange and transfer of land use rights, there are provisions on the form of land use right transfer contracts as follows:

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“Contracts on exchange, donation, mortgage or capital contribution with land use rights, land use rights and land-attached assets must be notarized or authenticated”

Thus, based on the 2013 Law on Land, your land use right transfer contract is not consistent with the provisions of law.

However, based on the principle of freedom of contract, the Civil Code 2015 stipulates that a civil transaction is invalid due to failure to comply with the following formality:

A civil transaction in violation of regulations on formality is invalid, except for the following cases:

  • If the form of a civil transaction, required to be established in writing, does not comply with regulations of law, but a party or the parties has/have fulfill at least two third of the obligations in the transaction, a court, at his/her/their request(s), shall issue a decision on recognition of the validity of such transaction.
  • If the form of a civil transaction, required to be established in writing, violates against regulations on notarizing or authorization, but a party or parties has/have fulfill at least two third of the obligations in the transaction, a court, at his/her/their request(s), shall issue a decision on recognition of the validity of such transaction. In this case, the parties need not perform the notarizing or authorization.

Thus, although your contract does not comply in terms of form, but you have paid 6 billion 900 million out of the total payment of 8 billion. That is, you have performed “at least two-thirds of the obligations in the transaction”, so you have the right to request the Court to recognize this transaction. Then the two parties are obliged to strictly comply with the previous agreements of both parties. You will have to pay the remaining amount of 1 billion 100 million and the other party will be obliged to allocate the land and carry out the name change procedure.

In the case where the seller decides not to perform the obligations as agreed from the beginning, causing damage to you. You have the right to take legal action to the People’s Court of the district where the seller resides to claim your legitimate rights and interests.

The above is our advice for civil transactions in violation of the conditions in force on form. Please contact us for more detailed advice./.

By Lawyer Do Ba Thich from ANS Law Firm

 

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