New guidance on registration of mortgage of land use right and construction works - Part 1

New guidance on registration of mortgage of land use right and construction works - Part 1

On 25 November 2019, the Ministry of Justice (MOJ) issued Circular 7 guiding some contents of mortgage of land use right and asset attached to land (Circular 7/2019). Circular 7/2019 will take effect from 10 January 2020 and replace Joint Circular 9 of the MOJ and Ministry of Natural Resources and Environment (MONRE) dated 23 June 2016 (Joint Circular 9/2016) on the same subject matter. In general, Circular 7/2019 only provides some guiding and supplementing provisions for Decree 102 of the Government dated 1 September 2017 (Decree 102/2017) rather than providing detailed guidance as Joint Circular 9/2016.

Competent authority managing the registration of mortgage

Previously, the document detailing the registration of mortgage over land use right and asset attached to land is usually a joint circular of the MOJ and MONRE. However, since joint circular is no longer legislative document (văn bản quy phạm pháp luật) under Law on Laws 2015. Accordingly, the unified authority to manage the security interest registration is vested in MOJ. Under Decree 102/2017, the MOJ now has the authority to issue or to submit for the Government to issue legislative documents on the registration of security interest, which includes Circular 7/2019.

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Written by Nguyen Quang Vu On In ,

Are Land Use Rights Considered As Immovable Properties Under Vietnamese Law?

Under the current law of Vietnam, it is possible that “land use rights” (quyền sử dụng đất) are considered “immovable properties”. The following arguments support the view that land use rights are immovable properties under Vietnamese law:

  • Land use rights (LUR) are property rights (quyền tài sản), which is a property (tài sản). Properties are divided into movable properties (động sản) and immovable properties (bất động sản). Immovable properties are defined to include: (i)  Land; (ii) House and construction work attached to land; (iii) Other properties attached to land, house or construction works; and (iv) other properties as stipulated by law.

  • Regarding item (iv) above, LURs are stipulated under Article 5.4 of the Law on Real Estate Business 2014 as types of “immovable properties made available for trading” (bất động sản đưa vào kinh doanh). This view is also adopted by Dr. Do Van Dai in his book on Civil Code 2015.

  • Regarding item (iii), Dr. Nguyen Minh Tuan considers LURs being immovable properties because they are “properties attached to land”.

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Written by Nguyen Quang Vu On In

Environmental license and permit for industrial parks in Vietnam

The following is a non-exhaustive list of licenses, permits and requirements on environment which an industrial park in Vietnam need to comply with.

1. Environment impact assessment report (EIAR – Báo cáo đánh giá tác động môi trường) or environment protection plan (EPP – Kế hoạch bảo vệ môi trường).

2. Confirmation on completion of the environmental protection works (Xác nhận hoàn thành công trình bảo vệ môi trường).

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Written by Nguyen Quang Vu On In , ,

Issues in selecting arbitration to settle construction disputes in Vietnam

Under the Law on Construction 2014, a dispute relating to a construction contract can be resolved through mediation, by a commercial arbitration or court “in accordance with law”. This standard wording seems to allow parties to a construction dispute in Vietnam to select arbitration to settle the dispute. However, Circular 26/2016 of the Ministry of Construction provides that a dispute relating to quality of a construction work will be resolved in the following steps:

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Written by Nguyen Quang Vu On In ,