PROTECTING THE RIGHTS OF REAL ESTATE TRANSFEREES ACCORDING TO LAND REGISTRATION LAW BASED ON PRACTICES IN HỒ CHÍ MINH CITY

PROTECTING THE RIGHTS OF REAL ESTATE TRANSFEREES ACCORDING TO LAND REGISTRATION LAW BASED ON PRACTICES IN HỒ CHÍ MINH CITY

PROTECTING THE RIGHTS OF REAL ESTATE TRANSFEREES ACCORDING TO LAND REGISTRATION LAW BASED ON PRACTICES IN HỒ CHÍ MINH CITY

PROTECTING THE RIGHTS OF REAL ESTATE TRANSFEREES ACCORDING TO LAND REGISTRATION LAW BASED ON PRACTICES IN HỒ CHÍ MINH CITY

Châu Phụng Chi

PhD, Deputy Head of District 1 Department of Natural Resources and Environment

Võ Quốc Hưng

Deputy Director of District 1 Branch Office of Land Registration

ABSTRACT

Land registration and the registration of assets attached to land are legal requirements that land users must comply with for state authorities to recognize their rights. However, compliance with these legal provisions does not always ensure the establishment of ownership status for transferees when participating in real estate transactions. The practical implementation of land registration law over recent years has also generated significant risks concerning the rights of real estate transferees. Identifying these risks is crucial for proposing contributions to better protect the legitimate rights of buyers when engaging in real estate transactions.

Keywords: Land registration, change registration, rights of real estate transferees

I. THEORETICAL ISSUES ON LAND REGISTRATION FOR GOODS IN THE REAL ESTATE MARKET

Globally, the concept of the real estate market generally refers to the transaction market for land, assets attached to land, and rights to assets attached to land. The circulating object in the market is land that has been commodified. In Vietnam, the real estate transaction market has become a market for the transaction of land use rights and assets attached to land because land is owned by the entire people.

Land registration and the registration of assets attached to land involve land users, owners of assets attached to land, and those assigned to manage land declaring land use rights and ownership of assets attached to land with competent state agencies to be recognized under the provisions of the 2024 Law on Land. This includes initial registration and mutation registration (National Assembly, 2024).

Initial registration applies to cases where the State allocates or leases land for use, or where the land user is using land that has not yet been issued a Land Use Rights Certificate or other asset ownership certificate attached to land.

Updates to registration are performed for land users who have been issued a Land Use Rights Certificate, where there is a change in the stated contents. The condition for updates to registration regarding land status is that the land user has completed the initial registration.

To exercise the rights of land users, registration is mandatory for land users and those assigned to manage land (National Assembly, 2024). The result of initial registration is that the competent state agency considers issuing a Land Use Rights Certificate and ownership of assets attached to the land if the conditions are met.

At that time, organizations and individuals are recognized by the State for land use rights and can carry out transactions related to the plot of land (such as conversion, transfer, lease, sublease, inheritance, mortgage of land use rights, donation, and capital contribution by the value of land use rights). When the conditions specified in Article 133 of the 2024 Law on Land are met, the land user must carry out the procedures for updating the registration when exercising the aforementioned rights.

The procedures for registration and issuance of the Land Use Rights Certificate and ownership of assets attached to land are carried out in accordance with the Law on Land and Decree No. 101/2024/NĐ-CP dated July 29, 2024, of the Government on basic land surveys; registration, issuance of the Land Use Rights Certificate, ownership of assets attached to land, and the land information system.

Thus, through the implementation of land registration regulations, state management agencies perform the function of state management of land, which includes managing transactions related to land use rights and assets attached to land in the real estate market. Land users, when complying with land registration regulations, are protected by law and state management agencies regarding their legitimate rights and interests during land use and when participating in real estate transactions.

II. ASPECTS OF PROTECTING THE RIGHTS OF REAL ESTATE TRANSFEREES ACCORDING TO LAND REGISTRATION LAW AND ASSETS ATTACHED TO LAND

Real estate transfer transactions are a type of civil transaction that adhere to the fundamental principles of the Civil Code and relevant legal provisions in the fields of land and housing, where both the transferor and transferee have full rights and obligations according to civil and land law. One of the most important rights for real estate transferees is the right of ownership.

According to Vietnamese law, the process of transferring real estate ownership includes the following steps and procedures:

Checking the legal status of the real estate: The transferee needs to check the documents related to the real estate, including the ownership certificate, Land Use Rights Certificate, construction permit, and other related documents.

Negotiating prices and transaction conditions: Both parties agree on the price, payment method, and other conditions related to the transaction.

Drafting the sale and purchase contract: The transfer contract must be drafted in accordance with legal provisions, including information about the buyer, seller, transferred real estate, price, and other conditions.

Carrying out the transfer procedures: The transferee and transferor together go to the notary office to create a delivery receipt and notarize the contract.

Carrying out post-transfer procedures: The transferee needs to complete the procedures to transfer the owner’s name, pay taxes, and other related fees. The change in the legal status of real estate ownership is only effective from the time of registration according to the provisions of the 2015 Law on Land (National Assembly, 2015).

From the perspective of parties involved in real estate transfer transactions, legal regulations on land registration and assets attached to land play a crucial role in confirming the legality of land use rights and ownership of assets attached to land, allowing parties to engage in transactions legally, specifically:

– For the transferor, only when ownership and other rights related to real estate assets are registered according to the provisions of the Civil Code and asset registration law can the real estate be issued a certificate. This is the responsibility of the seller to ensure the transaction property is their lawful ownership, and it is also the lawful right of the buyer.

– For the transferee, carrying out land and asset registration procedures aims to terminate the legal status of the transferor and establish the legal status for the transferee. In other words, it is the right to be issued a Land Use Rights Certificate and ownership of assets attached to land (hereinafter referred to as the certificate) according to Article 26 of the 2024 Law on Land.

However, in practice, compliance with these legal procedures does not always guarantee the establishment of ownership status for the transferee. The practical implementation of land registration law and the registration of assets attached to land in recent years has also generated significant risks concerning the right to be issued a certificate for the real estate transferee. Identifying these risks is crucial for proposing recommendations to better protect the rights of real estate transferees.

III. RISKS FOR REAL ESTATE TRANSFEREES IN THE PROCESS OF UPDATING REGISTRATION BASED ON PRACTICES IN HỒ CHÍ MINH CITY

  1. Current Status of Land Registration Updates and Assets Attached to Land in Hồ Chí Minh City

Buying and selling real estate is a common activity in the real estate sector, especially in rapidly developing urban areas like Hồ Chí Minh City. According to a report from the City’s Office of Land Registration, in 2023, a total of 153,275 registration update dossiers were processed across the City, with 41,099 dossiers processed in the first six months of 2024 (Hồ Chí Minh City Department of Natural Resources and Environment, 2024).

During the application of the 2013 Law on Land, the City’s Office of Land Registration based its procedures for updating land registration and assets attached to land in real estate transactions on the following regulations:

– Article 188 of the 2013 Law on Land regarding conditions for transferring land use rights when the following conditions are met: a) Having a certificate; b) Land without disputes; c) Land use rights not being seized to ensure judgment enforcement; d) Within the land use term.

– Article 7 of Circular 33/2017/TT-BTNMT dated September 29, 2017, of the Ministry of Natural Resources and Environment amending and supplementing certain articles of Circular 24/2014/TT-BTNMT dated May 19, 2014, which stipulates cases for refusing registration dossiers and issuance of certificates when receiving documents from civil judgment enforcement agencies or public notary offices; documents from competent agencies resolving land disputes; land users not meeting conditions to exercise rights according to legal provisions.

– Article 10 of Decision No. 17/2024/QĐ-UBND dated April 1, 2024, of the City’s People’s Committee issuing regulations on coordinating the management of construction order in Hồ Chí Minh City. During the process of resolving procedures related to the certification of assets attached to land, if violations of construction order are detected during inspections of housing or construction works as stipulated by land law, the dossier will be transferred to the competent agency for inspection and handling according to legal regulations.

The procedure for updating real estate registration in Hồ Chí Minh City is as follows:

– After signing the notarized contract, individuals contact the land registration agency to carry out the procedures for updating land and assets attached to land.

– The land registration agency will receive the dossier components according to Decision No. 1774/QĐ-UBND dated May 2, 2017, of the City’s People’s Committee on the announcement of standardized administrative procedures in the field of land under the management functions of the Hồ Chí Minh City Department of Natural Resources and Environment.

– After receiving the dossier, the land registration agency will check the dossier and compare it with management data to process it. If there are no disputes, complaints, no requests for prevention from competent authorities, and no information about changes in assets attached to land, the land registration agency will issue an information transfer slip to determine the financial obligations concerning land, sending it to the tax agency.

– After the tax agency checks the dossier sent by the land registration agency; if the dossier is valid (the taxpayer has only one tax code, no tax debt, no overdue tax declaration violations, and has all documents proving exemption or tax reduction…), the tax agency will determine the financial obligations, fees, and charges related to land management and use, issue a notice of financial obligation fulfillment, and guide the land user on payment as per legal regulations, then send it to the land registration agency to forward to the land user.

– Once the land user completes the financial obligations, they contact the land registration agency to receive the results.

  1. Identifying Risks in the Process of Updating Land and Asset Registration

Based on the above regulations, practical experience shows that in many cases, real estate transferees may encounter the following risks when updating registration:

Firstly, disputed houses and land.

According to Article 203 of the 2013 Law on Land, the authority to resolve land disputes lies with the district-level People’s Committee, provincial-level People’s Committee, or People’s Courts at various levels. However, when handling disputes, these agencies do not send acceptance notifications to the Information and Notary Counseling Center under the Department of Justice. Therefore, individuals continue to transact at notarial practice organizations. Only after that do they submit their dossiers to the land registration agency.

Upon receiving the dossier, if the land registration agency has information about a dispute or receives documents from a competent authority resolving a land dispute regarding the receipt of a request to resolve a land and asset dispute, they will refuse the dossier for registration and issuance of the Land Use Rights Certificate and ownership of houses and other assets attached to land as stipulated in Article 188 of the 2013 Law on Land or Article 7 of Circular 33/2017/TT-BTNMT dated September 29, 2017, of the Ministry of Natural Resources and Environment.

Secondly, houses and land with documents requesting temporary suspension or cessation of issuing Land Use Rights Certificates and ownership of assets attached to land for land users and owners of assets attached to land.

Currently, land registration agencies often receive documents requesting temporary suspension or cessation of issuing Land Use Rights Certificates and ownership of assets attached to land for land users and owners of assets attached to land from agencies such as: civil judgment enforcement agencies or public notary offices, investigation police agencies, tax agencies. However, these agencies typically do not send documents to the Information and Notary Counseling Center under the Department of Justice. Therefore, individuals continue to transact at notarial practice organizations. Only after that do they submit their dossiers to the land registration agency.

Upon receiving the dossier, the land registration agency will refuse to process it according to Article 7 of Circular 33/2017/TT-BTNMT.

Thirdly, the current state of assets attached to land has changed compared to the Land Use Rights Certificate.

a) Changes regarding land:

If there is a decrease compared to the Land Use Rights Certificate: The plot of land being transacted has previously undergone changes due to State acquisition of a portion of the land, erosion, or agreements with other parties leading to changes in size and area. However, the land user has not completed the registration update according to the regulations but still signs notarized contracts with the information from the Land Use Rights Certificate.

In this case, based on Article 95 of the 2013 Law on Land, the land registration agency will refuse to process the dossier because the actual state differs from the issued Land Use Rights Certificate.

– If there is an increase compared to the Land Use Rights Certificate: the land registration agency can still consider processing the registration for transfer.

b) Changes regarding assets attached to land:

If there is a decrease compared to the Land Use Rights Certificate, such as partial or total demolition of the house: The land registration agency has no basis to recognize the ownership of the house according to the Land Use Rights Certificate for the transferee.

– If there is an increase compared to the Land Use Rights Certificate due to partial extension or complete rebuilding of the house but the registration update for assets attached to land (commonly known as completion certification) has not been completed, the land registration agency will, based on Article 10 of Decision No. 17/2024/QĐ-UBND, transfer the case to the construction order management agency for inspection and opinion before considering processing.

Fourthly, other issues related to tax authorities.

The transferor or transferee delays submitting the tax declaration dossier (required within 10 working days according to Clause 3, Article 44 of the 2019 Law on Tax Administration), has multiple tax codes, or has tax debt. In these cases, the tax authority will require the parties to pay administrative fines for late declaration, close other tax codes, or complete outstanding tax payments before the tax authority issues a Notice of Payment for registration fee and personal income tax for real estate transfer.

After receiving the Notice of Payment for registration fee (for the transferee) and personal income tax (for the real estate transferor), both parties must fulfill their tax obligations before the registration update to the buyer’s name is processed. If the seller does not fulfill the personal income tax obligation, the land registration agency will not consider processing the dossier (according to Clause 4, Article 10 of Interministerial Circular No. 88/2016/TTLT-BTC-BTNMT dated June 22, 2016, of the Ministry of Finance – Ministry of Natural Resources and Environment).

IV. SOME RECOMMENDATIONS TO MITIGATE RISKS FOR REAL ESTATE TRANSFEREES WHEN UPDATING LAND AND ASSET REGISTRATION

  1. Improving Legal Provisions

Firstly, the obligation to register as stipulated in Clause 1, 2, Article 131 of the 2024 Law on Land: “Land registration is mandatory for land users and those assigned to manage land; Assets attached to land such as houses and buildings are registered at the request of the owner.” This means that the law does not mandate the registration of ownership of houses and other assets attached to land but only regulates registration based on the owner’s will.

This leads to disputes arising easily, such as: selling land without selling the house and assets on it; land with a house that cannot be relocated being transferred, causing the land buyer to be unable to use the land. Although Article 408 of the 2015 Civil Code provides invalid contract provisions to control this situation, in practice, this provision has not yet thoroughly resolved the issue but has allowed complicated disputes to arise.

Nevertheless, Clause 2, Article 131 of the 2024 Law on Land maintains the viewpoint of the 2013 Law on Land with the provision: “Assets attached to land such as houses and buildings are registered at the request of the owner.” From a theoretical perspective, the registration object is identified as rights related to real estate, but the competent real estate registration agency must still record essential and basic information about the physical status of the real estate (area, size, items) in the registration book.

This is necessary because the rights of real estate owners must be established and exercised on a specific real estate property, meaning the physical status of the real estate as the subject of transactions must be determined. Therefore, in this case, lawmakers need to study mandatory registration regulations for assets attached to land to limit disputes and risks in real estate transactions.

Secondly, real estate is a unified entity (including land and assets attached to land), so the legal mechanism for real estate must be clear and consistent (for example: mandatory or voluntary registration; whether registration establishes rights or is purely for opposition to third parties). This is essential to determine the approach, scope of adjustment, and relationship between the Law on Asset Registration and other related laws (Law on Land, Law on Housing, Law on Forest Protection and Development, etc.).

Thirdly, to carry out real estate transfers, land users must ensure the conditions stipulated in Article 45 of the 2024 Law on Land. However, currently, the State has yet to establish an official and unified database on land and notarial activities. This leads to notaries facing difficulties in verifying the above-mentioned information, primarily relying on the commitments and self-responsibility provisions of the parties as shown in the contract, resulting in transferees being unable to carry out the procedures for updating registration as mentioned above.

Currently, the law stipulates that provincial People’s Committees establish a notarial database, which encounters several issues such as:

(i) Lack of synchronization, consistency, and standardization across provincial databases. Each province, depending on its budget and conditions, will invest in and build databases according to different standards and scales. When nationwide data connection is needed, these databases cannot be connected;

(ii) Each province must develop projects, invest in hardware, software, personnel, operational costs, and maintain the database. In provinces with large transaction volumes, many notaries and notarial practice organizations, the investment efficiency is evident (e.g., Hà Nội, Hồ Chí Minh City). However, in provinces with few transactions and few notaries, the investment efficiency is low, even wasteful;

(iii) The database investment depends on local budgets, and not all localities are ready to allocate funds to build a notarial database (Dung, 2023).

Therefore, the Ministry of Justice needs to take the lead in establishing an integrated notarial and authentication database, moving towards connecting and sharing notarial and authentication data with the land management database of the Office of Land Registration (including mortgage registration data for land use rights and assets attached to land) and the security measure database of the Transaction and Asset Registration Center under the National Registration Agency for Secured Transactions – Ministry of Justice.

When the information system is complete, it will provide a basis for notaries to verify and cross-check when performing notarial procedures related to this issue. This will help minimize errors, misjudgments, and wrongful exercise of authority, impacting the rights and interests of real estate transferees.

Fourthly, the procedures and processes need to be simplified, removing regulations that could lead to “unlawful” requirements from state management agencies, especially regulations related to coordinating the handling of construction order violations (Department of Administrative Violation Handling and Law Enforcement Monitoring – Ministry of Justice, 2016).

Legal provisions across sectors have not been consistent, and new directives not included in dossier processing procedures, such as verifying unlicensed or illegal construction when people register land changes, must still address these violations before processing dossiers, leading to non-compliance with the prescribed time frame, resulting in overdue dossiers. In some cases, dossiers are rejected due to unremediable construction violations.

Additionally, the State needs to implement synchronized solutions such as: guiding the calculation of taxes, land use fees, and certificate issuance fees in line with the 2024 Law on Land, which stipulates that the land price table approaches market prices; simultaneously implementing procedures for updating changes in land status with the registration of rights when land users engage in transactions.

  1. Solutions in Administrative Reform for Land Management in Hồ Chí Minh City

Firstly, focus on accelerating the implementation of the project “Developing the application of population data, identification, and electronic authentication to serve the national digital transformation for the period 2022-2025, with a vision to 2030.” This involves managing, operating, and updating a centralized unified cadastral database. Gradually complete the database on the pilot VBDLIS software, focusing on exploiting the centralized prevention software, helping to gradually transform the unit’s database from distributed to centralized and prepare for the “data cleansing process,” moving towards connecting the cadastral database system (VBDLIS) and the public service portal system (https://dichvucong.hochiminhcity.gov.vn).

Simultaneously, the City People’s Committee needs to urgently issue guiding regulations and reorganize the administrative procedure reception and resolution agency in the field of land according to the procedures and authority stipulated in the 2024 Law on Land and guiding documents effective from August 1, 2024.

Secondly, implement electronic tax interconnection with the tax sector. The provincial People’s Committee needs to proactively assign the Department of Natural Resources and Environment to coordinate with the Tax Department to develop a coordination regulation on electronic information exchange in resolving administrative procedures for land. Through this regulation, state agencies shorten the time to check and verify information related to the financial obligation history of real estate when people carry out registration update procedures, thereby reducing the risk of people being denied certification due to violations of financial obligations.

Thirdly, focus on propagating and disseminating legal education regarding regulations related to the real estate sector to each individual and organization. Emphasize the content related to the rights and obligations of the parties when participating in real estate transactions to equip legal knowledge for self-protection against risks right from the initial stage of participating in transactions. In addition to the responsibility of state agencies in implementing synchronized solutions to ensure transparency and limit disputes and risks in real estate market transactions, the transferee, as the directly benefiting party, needs to understand legal provisions and proactively protect their right to legally own property after completing payment obligations to the transferor.

V. CONCLUSION

Land registration and registration of assets attached to land are administrative land procedures stipulated in Point b, Clause 1, Article 223 of the 2024 Law on Land. Previously, according to the 2013 Law on Land, this content was part of the procedure for land registration, registration of assets attached to land, and issuance of the Land Use Rights Certificate, ownership of houses, and other assets attached to land.

The 2024 Law on Land separates the content of land registration and registration of assets attached to land from the content of issuing the Land Use Rights Certificate, ownership of houses, and other assets attached to land into two independent administrative procedures, highlighting the importance of implementing land registration regulations in practice.

To ensure legal safety in real estate transfer transactions, various regulations and tools are required. However, only when the transferee carries out the registration update procedure is the right to be issued a certificate enforced, and the ownership status transferred in practice. Therefore, identifying the risks in the process of performing this administrative procedure is necessary. This is the responsibility not only of the parties involved in the transaction but also of the state land management agency in protecting the legal rights and interests of the people.

REFERENCES

  1. Ministry of Natural Resources and Environment (2017), Circular 33/2017/TT-BTNMT dated September 29, 2017, of the Ministry of Natural Resources and Environment amending and supplementing certain articles of Circular No. 24/2014/TT-BTNMT dated May 19, 2014, on cadastral records.
  2. Ministry of Finance – Ministry of Natural Resources and Environment (2016), Interministerial Circular No. 88/2016/TTLT-BTC-BTNMT dated June 22, 2016, of the Ministry of Finance – Ministry of Natural Resources and Environment.
  3. Government (2024), Decree 101/2024/NĐ-CP dated July 29, 2024, of the Government on basic land investigations; registration, issuance of Land Use Rights Certificates, ownership of assets attached to land, and the land information system.
  4. Government (2024), Decree 102/2024/NĐ-CP dated July 30, 2024, of the Government detailing the implementation of certain provisions of the Law on Land.
  5. Department of Administrative Violation Handling and Law Enforcement Monitoring – Ministry of Justice (2016), Official Dispatch No. 103/QLXLVPHC&TDTHPL-XLHC dated March 16, 2016, of the Department of Administrative Violation Handling and Law Enforcement Monitoring – Ministry of Justice regarding exchanging solutions for difficulties and obstacles in handling administrative violations.
  6. Dung, T. T. T (2023), Improving legal regulations on ensuring legal safety for real estate sales and transfer contracts, Journal of Law and Practice (p.57).
  7. National Assembly (2015), Civil Code 2015.
  8. National Assembly (2024), Law on Land 2024.
  9. Hồ Chí Minh City People’s Committee (2024), Decision No. 17/2024/QĐ-UBND dated April 1, 2024, of the City People’s Committee issuing regulations on coordinating the management of construction order in Hồ Chí Minh City.
  10. Hồ Chí Minh City People’s Committee (2024), Decision No. 1774/QĐ-UBND dated May 2, 2017, of the City People’s Committee on the announcement of standardized administrative procedures in the field of land under the management functions of the Hồ Chí Minh City Department of Natural Resources and Environment.
  11. Office of Land Registration – Hồ Chí Minh City Department of Natural Resources and Environment (2024), Report No. 364/BC-VPĐK-HC dated January 16, 2024, of the Office of Land Registration – Hồ Chí Minh City Department of Natural Resources and Environment.

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