CONDITIONS APPLICABLE TO THE BUSINESS OF FUTURE BUILDING

Future Building means any buildings which is under construction and has not been permitted to put into operation. According to  Vietnam Real Estate Law 2014, a future buildings can be sold, leased or lease purchased prior the comletion of construction. However, such future buildings must meet the following conditions to be put on the markets:

1. Conditions on paperworks: the following documents must be avaiable prior putting the future building on the markets

- Documents on land, project documents or construction drawing approved by competent agencies;

- License for construction;

- Documents on certification of completion of technical infrastructure in equivalent to project progress; or it is required to gain the certification of completion of the foundation of the building regarding future apartment buildings or mix-used buildings.

2. Conditions on notifications to State Agency: The investor must send written notification to the  agency in charge of housing of province for the future building permitted to be put on the market.

3. Bank Guarantee condition: The investor’s financial obligations must be guaranteed by a competent commercial bank in case the investor fails to transfer the building on schedule as commitment to clients before the investor sell or lease purchase future buildings.

- The State bank of Vietnam shall issue the list of competent commercial banks which may give guarantee in the future real estate trading.

- The scope, requirements, content and guarantee fee shall be agreed by contracting parties and concluded in an agreement

- The investor shall send the copy of guarantee agreement to the buyer or lessee when the agreement on sale or lease purchase is signed.

- The guarantee agreement will stay unexpired until the building is transferred to the buyer or lessee.

- If the investor fails to transfer the building on schedule as committed and at the request of the buyer or lessee, the guarantor shall make a refund of the option fee and other payments to clients under agreement on housing sale or lease purchase and signed guarantee agreement.

REAL ESTATE MORTGAGE AGREEMENT UNDER VIETNAM CIVIL CODE 2015

 In order to overcome the limitation of Civil Code 2005, The Vietnam Civil Code 2015 provides details and transparent regulations on mortgage on land use right and property attached on land. In general, The Vietnam Civil Code 2015 respects freedom of agreement of the parties, however, in cases where the parties have not agreed upon or failed to discuss upon, these issues will be handled according to the law as follows:

In principle, the land owner is also the owner of property attached on land. In case the property attached on land is not legally registered under the law of Vietnam, such property shall not be considered as mortgaged property and shall be executed separately.

Mortgage on land use rights without mortgage of property attached on land:

- if the land user is also the owner of the property attached on land; such property shall also part of the realized property;

- If the land user is not also the owner of the property attached on land, such owner may keep using such land within his/her rights and obligations during the realization of the land use rights. The rights and obligations of the mortgagor in relation with the owner of the property attached on land shall be transferred to the transferee of the land use rights.

Mortgage of property attached on land without mortgage on land use rights

- If the owner of the property attached on land is also the land user, such land use rights shall also part of the realized property;

- if the owner of the property attached on land is not also the land user, the transferee of property on land may keep using such property within the transferred rights and obligations from the owner of the property attached on land during the realization of the land use rights.