From that, when pairing these two words together, it can be understood that a property mortgage is a party using the property to fulfill or replace a previous obligation.7The concept of
Rationale of the study
Until the new concept of the knowledge economy and the strong rise of science and technology in the 90s of the last century to the early years of the twenty-first century, especially in the era of the Second Industrial Revolution As the material resources get closer and closer to the limit, the limitless resource of knowledge is increasingly asserted Off-plan assets are considered creating an important factor to promote the development of the economy
On the basis of studying the provisions of the law on mortgage of off-plan properties in order to understand the nature of mortgage, inadequacies and limitations in the provisions of the law and the application of the provisions of the law Law to find solutions, thereby proposing to improve Vietnamese law on mortgage of off-plan properties, proposing specific solutions in the application of the law on mortgage of off-plan properties
Therefore, the topic " Mortgaging the off-plan property - Theory and Practice" will partly provide a system of legal arguments to promote the practice of mortgaging off-plan property in Vietnam.
Research situation
In general, the research works related to mortgage of off-plan assets are still quite modest compared to those of other legal relationships The topic mortgage of off-plan properties has been studied in the following studies
- Nguyễn Thanh Thúy (2014), Master thesis, Thế chấp nhà ở hình thành trong tương lai theo pháp luật Việt Nam
- Nguyễn Hoàng (2015), Master thesis, Thế chấp nhà ở hình thành trong tương lai theo pháp luật Việt Nam hiện hành
- Hoàng Thị Hải Hà (2015), Master thesis, Pháp luật về cho vay thế chấp bằng nhà ở hình thành trong tương lai của ngân hàng thương mại tại Việt Nam
- Trần Văn Từ (2022), “Hoàn thiện pháp luật về giao dịch bảo đảm đối với loại động sản đặc thù là tàu bay, tàu biển hình thành trong tương lai”, The
The topic of off-plan property mortgaging has limited research coverage, with studies often treating it as a separate subject rather than an integral aspect This lack of comprehensive analysis indicates a gap in the understanding of off-plan property financing.
Research aims
Providing an overview study on mortgage of off-plan properties, putting such provisions of the two legal systems Common Law and Civil Law under the perspective of comparative law
Researching the regulations and movement in the provisions of Vietnam's civil law on mortgage of properties formed in the future, including setting up a mortgage, the legal effect of the mortgage measure, and handling assets mortgage property Compare, contrast and give suggestions and solutions.
Research objects and scope of the study
The graduation paper focuses on researching theoretical and practical issues of applying the law on mortgage of off-plan properties in Vietnam The first is to clarify concepts, contents and compare and contrast relevant theoretical issues Next, the graduation paper analyzes the current situation of law application in Vietnam, points out the shortcomings, proposes amendments in line with legal practice.
Research methods
The graduation paper uses theoretical research methods, normative analysis methods, historical methods, comparative jurisprudence methods, and synthetic methods to solve problems in the most reasonable and clear way
Organisation of the study
The following chapters will be listed correspondingly in this research Chapter I Some theoretical issues related to mortgage of off-plan properties Chapter II Vietnamese law on mortgage of off-plan properties
Chapter III Application of the law in practice and recommendations
SOME THEORETICAL ISSUES RELATED TO MORTGAGE OF OFF-
Theoretical background
The concept of property rights emerged during the 6th century and played a pivotal role in shaping ancient Roman law By the reign of Emperor Justinian, the doctrine of "jus in re – jus ad rem" served as a cornerstone for legal design Throughout the evolution of civil law history, national legal systems have been heavily influenced by these Roman legal principles, which continue to shape laws to this day.
A property right (jus in re) is a concept of Latin law, used to refer to a right that can be exercised directly and immediately on an object 1 The property rights relationship is built from two components: the subject of the right (human) and the object of the right (thing) That relationship operates outside the role of another subject, especially without the cooperation or assistance of another subject
A lien, or secure property right, is a legal claim against an asset that gives the holder direct and immediate rights to that asset in the event that the owner fails to fulfill an obligation This type of right strengthens the position of the bondholder by granting them a special interest in the debtor's property The concept originated in the Continental European legal system, providing an alternative to traditional lending practices and increasing the bondholder's security without relying on third parties.
From ancient times, Roman jurists defined liens as including: sale (fiducia cum creditore) and pledge to hand (pignus), later, in the course of development, mortgage (hypotheca) was added 3
1 Xem, ví dụ, F Terré và Ph Théry, Droit civil- Les biens, Dalloz, Paris, 1992, tr 30 ; Ph Malaurie và Laurent Aynès, Droit civil-Les biens, Cujas, Paris, 1998, tr 87 và kế tiếp
2 Pierre Voirin, Gilles Goubeaux Droit Civil: Personnes – Famille, Incapacité – Biens, Obligations – Sûreté Ấn bản thứ 27 1999 Tr 606
3 Ngô Thu Trang, “Quyền đối với tài sản – đánh giá mức độ tiếp cận lý thuyết vật quyền và những vấn đề đặt ra”, Trang thông tin điện tử Bộ Tư pháp, https://moj.gov.vn/UserControls/News/pFormPrint.aspx?UrlListProcess=/qt/tintuc/Lists/NghienCuuTraoDo i&ListIdua8df79-a725-4fd5-9592-517f443c27b6&SiteId1f9e79-d495-439f-98e6-
Sale, mortgage, mortgage was approached by Roman law as a kind of security right, so it has the characteristics of a security right
Firstly, the secured recipient is completely entitled to establish a direct right to the economic value of the pledged or mortgaged property even though such property is still under the ownership of the securing party Property rights are antagonistic and exclusive This means that if one person has established ownership over a property of theirs, the third party will not have the right to affect, change the physical or legal state of that property without the consent of the third party intention of the property owner However, with respect to the mortgage of collateral, in the event that the secured obligation is not performed or improperly performed, the secured creditor has the right to dispose of the security property to recover the debt The right to dispose of the creditor's property was protected by Roman law, and no one had the right to stop it, not even the owner of the secured property
Secondly, the security recipient continues to hold and exercise his/her rights to the security asset even if the property has changed owner or is in the possession of another person (right of following)
Thirdly, property rights allow the right holder to exercise his or her right (priority to exercise the right) before others pursue the same benefit with the principle that "whoever declares the right first will have priority to pay" The law calls it the right of precedence This is most evident in secured and unsecured loan transactions.
General theory
1 The concept, nature and role of mortgage
Under the perspective of Anglo-American law, mortgage is defined as “A conveyance of title to property that is given as security for the payment of a debt or
4bd81e36adc9&ItemID#33&SiteRootID1e67e4-9250-47a7-96d6-64e9cb69ccf3 , truy cập ngày
11 the performance of a duty and that will become void upon payment or performance according to the stipulated terms - Also termed (archaically) dead pledge.” 4 “Dead pledge “ from mort "dead" + gage "pledge;" so called because the deal dies either when the debt is paid or when payment fails
In terms of Vietnamese semantics, "mortgage" is a Sino-Vietnamese word In which, "Thế means instead of" 5 and "Chấp is to hold and keep" 6 From that, when pairing these two words together, it can be understood that a property mortgage is a party using the property to fulfill or replace a previous obligation 7
The concept of "mortgage" is defined by Article 317 of the 2015 Civil Code as follows: “(1) Mortgage of property means the action of a party (hereinafter referred to as the mortgagor) use his/her property to secure the performance of an obligation and not to hand over the property to the other party (hereinafter referred to as the mortgagee); (2) The mortgaged property is held by the mortgagor The parties can agree to assign a third person to keep the mortgaged property Therefore, the legislator implicitly asserted that a mortgage would create an object relationship where the right is exercised directly on a particular object (property)
Current Vietnamese law does not have a specific definition of secured transactions, the Civil Code 2015 only has listing-measure provisions to refer the types of security for the performance of obligations, including: 1 Pledge of property;
2 Mortgage of property; 3 Deposit; 4 Security collateral; 5 Escrow deposit; 6 Title retention; 7 Guarantee; 8 Fidelity guarantees; 9 Lien on property 8 It can be seen that, from the perspective of Vietnamese legislators, "mortgage" is considered as one
4 Black's Law Dictionary, 9th edition
5 Đào Duy Anh (2000), Từ điển Hán Việt, Nxb Khoa học xã hội, Hà Nội, tr154
6 Đào Duy Anh (2000), Từ điển Hán Việt, Nxb Khoa học xã hội, Hà Nội, tr394
7 Nguyên Vũ, Những quy định về thế chấp tài sản hình thành trong tương lai, Báo Pháp luật, 2021, https://baophapluat.vn/bds/nhung-quy-dinh-ve-the-chap-tai-san-hinh-thanh-trong-tuong-lai- post421051.html , truy cập ngày 19/03/2022
12 of the measures to secure the performance of an obligatory obligation using assest as the collateral
In short, "mortgage" is one of the measures to secure objects prescribed by law Accordingly, the mortgagor uses the property under his/her ownership to secure the performance of civil obligations towards the mortgagee and does not have to transfer such mortgaged property to the mortgagee
The essence of “mortgage property” is a legal relationship whereby the owner of the property restricts his absolute right to the property and gives others a certain right to that property for the purpose of securing the performance of an obligation while retaining the right to exploit, use, and obtain profits from the mortgaged property
In a mortgage security measure, the subject matter brought by the parties as security is a certain property, which has a value that can be converted into cash, is recoverable and is compensatory for the fact that the guarantor has breached obligations specified in the contract
The establishment of a secured interest through property mortgage involves creating a right over an asset to guarantee an obligation The existence of this right remains independent of the obligation's fulfillment, unless otherwise stipulated by the parties However, the security interest is contingent upon the presence of an encumbrance (an obligation that must be performed) Hence, the destruction of the encumbrance extinguishes the security interest Conversely, the emergence of a lien (obligation secured by performance) results in the creation of a corresponding collateral and the parties' ability to enforce their respective rights.
9 Tăng Thị Hà Chi, Một số vấn đề về hợp đồng thế chấp tài sản đảm bảo thục hiện nghĩa vụ, 2019,
Cổng thông tin điện tử sở tư pháp tỉnh Bình Dương https://stp.binhduong.gov.vn/bo-tro-tu- phap/Lists/GiaoDichBaoDam/DispForm.aspx?ID, truy cập ngày 22/3/2022
Vietnamese law as well as other countries’ law system following the tradition of Civil Law recognize two necessitated rights of the mortgagee, namely the right of following and the right to priority of payment when the mortgage measure comes into effect through a registration mechanism
By giving the above two physical rights to the creditor, it helps to partly guarantee the interests of the creditor when making a loan When the debt repayment obligation is not fulfilled, the creditor (also known as the mortgagee) will be guaranteed the right directly and immediately However, the mortgagee must also prove the legitimacy when exercising its rights on the mortgaged property with sufficient grounds such as: there is a breach of the secured obligation and the mortgage contract is valid
1.3.2 Enhance the debtor's willing to fulfill obligations
The enhancement of the debtor's responsibility for debt repayment is considered an inevitable consequence when "creating more rights for creditors" The contract of mortgage of property formed in the future will create a binding on the mortgagor by the value of the property to promote the responsibility of the mortgagor, forcing the mortgagor to perform its obligations When the mortgagor fails to perform part or all of its obligations, the mortgagee is allowed to use its right of recourse and priority to secure its lawful rights and interests, in accordance with the provisions of this Law law A physical right is granted to a creditor beyond the scope of the unauthorized relationship and is not subject to the unauthorized relationship Compulsory performance of this obligation does not stop at the right to claim (the right of the counterparty) to the obligor, but it is also reflected in the right of the mortgagee to directly influence the mortgaged real estate to secure ensure that this obligation will still be performed in the event that the right of counterpart is not
2 Concepts and constitutive elements of off-planed assets
effective 10 Therefore, the mortgagor will be forced to bear the burden of the obligation and the responsibility to perform the obligation
1.3.3 Ensuring the safety of the credit institution system and promoting credit activities
Credit markets are very important prerequisites for the efficient exploitation and use of resources in the economy The loan-lending relationship, also known as the credit relationship, has a far-reaching impact on the current market economy Credit activities play a decisive role in mobilizing and allocating idle capital in an economical and efficient manner In recent years, the system of credit institutions has developed strongly in order to promptly meet the demand for loans, improve the ability to access capital to serve the needs of people and businesses Therefore, to ensure a stable credit market, it is necessary to establish an effective collateral mechanism and handle collateral
To establish a secure and robust mortgage system, it is crucial that the asset used as collateral holds significant value relative to the credit risk involved This ensures that there is ample cushion to mitigate potential losses, fostering a stable environment for mortgage lending By providing sufficient collateral, the mortgage market becomes more accessible, enabling those in need of credit to participate and contribute to the overall health of the financial system.
2 Concepts and constitutive elements of off-planed assets
Vietnamese law recognizes "off-plan property" in many different legal documents and especially the 2015 Civil Code
Clause 2, Article 108, the 2015 Civil Code regulate: “Off-plan property includes: a) Non-formed property; b) Formed property that the entity has established his/her ownership rights after the time of transaction establishment.”
10 Nguyễn Quang Hương Trà, “Thế chấp bất động sản theo quy định pháp luật Việt Nam hiện hành”, tr49
Assets formed in the future include both movable and immovable property 11 Assets formed in the future may be: apartments, villas that have been partially completed or have been built in whole but have not yet been issued with a certificate of ownership; property being means of transport subject to registration of ownership but not yet registered; machinery, production lines and equipment have been ordered to be purchased by the method of goods arriving at the port, there is a sale and purchase contract, and the bill of lading has arrived but the buyer has not paid enough money to the seller, after the party complete the payment for the seller to hand over the goods…
2.2 Constitutive elements of off-planed assets
There are two factors used to determine off-plan assets, including:
(i) Physical factors (also known as material factors): This element represents the physical state of the property - the property has not been formed according to the standard of physical form and has not been fully owned the properties, features and uses of that type of property at the time of entering into the contract; however, it will certainly have or be formed in the future;
(ii) Legal element: This element represents the legal status of the property
Even when the property has been formed, the physical factors are ensured, but only after the transaction is established, the owners will establish the ownership rights;
It can be said that these are two necessary and sufficient factors to determine whether it is an existing asset or an asset formed in the future
Tổng cục Thi hành án dân sự đã trình bày "Khái quát chung về pháp luật thi hành án dân sự tại Việt Nam, những khó khăn vướng mắc trong quá trình thi hành án dân sự" tại Hội thảo: Trao đổi kinh nghiệm trong lĩnh vực thi hành án dân sự giữa Đại sứ quán Pháp tại Hà Nội và Tổng cục Thi hành án dân sự, Bộ Tư pháp tổ chức tại Hà Nội, ngày 07.7.2017.
Mortgage relationship is established to form a legal relationship between the parties, in which the rights and obligations of the parties are guaranteed by law The subject of the mortgage relationship consists of two parties, one party is called the mortgagor, the other is called the mortgagee
The mortgagor in a mortgage relationship performing an obligation means a party that commits to the other in an obligation relationship secured by that security relationship to the property under his/her ownership or by performing a certain task to secure the performance of obligations
Thus, in a mortgage relationship, the mortgagor is the party that commits before the obligee in the secured obligation relationship to the security of the performance of a civil obligation Usually, the mortgagor is also the "obligee" party in the secured obligation relationship For example, B borrows money from A and B mortgages his property as security for that payment
In addition, in the case of mortgage of property to secure a third party's obligations, the mortgagor is the party that uses its property to secure the performance of another's obligations Accordingly, "third party" is just a term used to refer to the guarantor in case they are not concurrently the civil obligor in the obligation relationship secured by that security measure The mortgagor in this case is not the borrower After the sale of the secured property, even if the value of the property sold is not enough to repay the loan, the liability (also known as the obligation) of the mortgagor will end after the sale When the property is sold, the borrower must continue to repay the debt The reason why the mortgagor's obligation terminates after the security property is sold is because this is a measure to secure the object, the mortgagor's obligation in this case is limited to the value of the property only
17 guaranteed This means that the mortgagor uses the value of the collateral to secure the performance of a civil obligation
The mortgagee in a mortgage relationship is the party that accepts the other party's commitment to secure the performance of a civil obligation with property Thus, the mortgagee is always the party with the "right" in the secured obligation relationship When the obligation is due, the mortgagee has the right to require the mortgagor to fully perform the commitments entered into in the contract; If you do not do it voluntarily, you may be forced to do it
Despite subsequent dealings with the mortgaged property, the mortgagee's rights remain unaffected Alterations to the collateral do not compromise the mortgagee's security as their focus is on the property's value, regardless of its physical state Even in cases of destruction or disappearance, the mortgagee's right to payment remains valid, preserving their financial interest in the property.
Mortgage is a security measure with a complex nature between two factors: property rights and obligatory rights, in which, in that relationship, the contract of mortgage of off – plan properties (obligatory rights) establishes the right (real rights) of the mortgagee to the property formed in the future mortgaged The contract is the basis for establishing the effect of the mortgage measure on the off-plan properties between the parties to the mortgage measure Mortgage security measures prescribed by the Civil Code are essentially security measures formed on the basis of an agreement; mortgage in particular and other security measures in general 12
Theo Đỗ Văn Đại (2014), bảo đảm thực hiện nghĩa vụ dân sự là phương tiện pháp lý quan trọng nhằm bảo vệ quyền và lợi ích hợp pháp cho các bên tham gia quan hệ dân sự Phương tiện này giúp phòng ngừa, ngăn chặn hành vi vi phạm nghĩa vụ dân sự, đảm bảo trật tự luật pháp và thúc đẩy sự phát triển lành mạnh của quan hệ dân sự.
Mortgage contract represents the will and agreement between the mortgagor and the mortgagee, whereby, the mortgagor agrees to use the future-formed property under his/her ownership to secure the performance of obligations towards the mortgagee
VIETNAMESE LAW ON MORTGAGE OF OFF-PLAN PROPERTIES
History of formation and development of Vietnamese law on mortgage of off-plan
1.1 Feudal and French colonial period
During the feudal period, social relations were often regulated by a common set of laws such as the Ministry of State, the Criminal Law under the Le Dynasty and the Gia Long Code under the Nguyen Dynasty At this stage, civil society relations are regulated and adjusted in small and non-systematic ways, and legal relations related to mortgages are quite fuzzy and limited
During the feudal colonial period, there were three Civil Codes in Vietnam: the Cochinchina Civil Code (1883), the Trung Ky Civil Code (1936), and the Tonkin Civil Code (1931) In Vietnam, during the French colonial period, the subject of mortgage was mainly aimed at existing real estate The concept of assets forming in the future is still too vague According to Article 1527 of Hoang Viet Trung ky Code 28 , "A mortgage of real estate is a contract belonging to the right by a debtor to assign to the creditor a real estate to secure the debt" The concept of real estate mortgage in this period was strongly influenced by the thinking of the Civil Code of the French Republic Taking a similar approach, the Tonkin Civil Code defines the
"right to claim", a right that has the nature (appearance) of a real estate mortgage According to Article 1353 of the Tonkin Civil Code, "The right to be owned is the right of the debtor to be assigned to the creditor When the debt is due, he can order a certain immovable property, even if it is in anyone's hand, to sell it to get money from debt, before other creditors” Approaching similar to the two civil laws mentioned above but with more expansion, the Ordinance on Land of July 21, 1925 regulated for mortgage of real estate in ordinary cases (based on the theory of obligatory rights) and “để đương rights”( based on the theory of real rights) to the
28 Hoàng Việt trung kỳ hộ luật (1947), Nhà in Viên – Đế, Huế
34 mortgaged real estate 29 At this stage, the regulations related to mortgage of off-plan properties have not yet been recorded
The typical legal documents regulating the mortgage relationship in this period are mainly sub-law documents
The Ordinance on Economic Contracts of the State Council No 24- LCT/HDNN8 dated September 25, 1989 only stipulates 03 measures to secure the performance of economic contracts, including: property mortgage, pledge, guarantee asset;
The Ordinance of the Council of State No 52-LCT/HDNN8 dated May 7, 1991 on civil contracts further stipulates that the deposit measure is divided into 04 measures to secure the performance of civil contracts, including: mortgage of property, property pledge, guarantee, deposit;
The Civil Code 1995 outlines seven measures to ensure performance of civil obligations: pledging property, mortgaging property, depositing funds, providing guarantees, collecting deposits, and imposing fines for violations This represents an expansion of the three measures stipulated in the Ordinance on Civil Contracts 1991: depositing funds, providing guarantees, and imposing fines for violations.
Mortgage can be seen as one of the earliest legal recognized security measures
With the profound influence of French legal tho
The concept of property to be formed in the future and related legal institutions have begun to be specified in the 2005 Civil Code and a number of related documents According to Article 163 of the 2005 Civil Code, "Property includes objects, money, valuable papers and property rights", Article 320 of the 2005 Civil Code stipulates:
29 Điều 130, Điều 146 Sắc lệnh Điền thổ ngày 21/7/1925
"Objects used to secure the performance of obligations Civil service is an existing thing or is formed in the future Things to be formed in the future are movables, real estate owned by the securing party after the time when the obligation is established or the secured transaction is entered into.” Accordingly, the property formed in the future is called not yet called "property" but just "thing" Next, Decree No 163/2006/ND-CP (amended and supplemented by Decree No 11/2012/ND-CP) on security transactions stipulates that off-plan assets include: formed from borrowed capital; the property is in the formative stage or is being created legally at the time of entering into the security transaction; assets have been formed and subject to registration of ownership rights, but after the time of entering into security, such property can only be registered in accordance with law Assets formed in the future do not include land use rights” 30
Then, thanks to the movement and development of the law, a new approach was opened, according to the provisions of Decree 11/2012/ND-CP, the assets formed in the future include:
(1) Off-plan assets, at this stage, at first, the mortgaged object is only accepted if it is real estate, excluding other common properties; and the secured obligation must be the mortgagor's obligation
In the Regulation on mortgage, pledge and guarantee of assets for bank loans issued together with Decision No 217/QD-NH1 dated August 17, 1996 of the Governor of the State Bank of Vietnam, stipulates: “Mortgage Bank loan property means the borrower (referred to as the mortgagor) uses real estate property under his/her ownership to secure the performance of debt repayment obligations (including principal, interest and interest penalties) to the lender (referred to as the mortgagee)”
30 Hoàng Thị Thanh Hoa, Hoàn thiện pháp luật về Thi hành án dân sự đối với tài sản hình thành trong tương lai, cổng điện tử thi hành án dân sự - Bộ tư pháp,2022, https://thads.moj.gov.vn/noidung/tintuc/Lists/NghienCuuTraoDoi/View_Detail.aspx?ItemID
Off-plan assets, as defined in Circular 07/2003/TT-NHNN, serve as collateral for mortgaged loans at credit institutions These assets include future-formed real estate, such as yields, interests, loan-generated assets, construction works, and other acquired properties after the mortgage transaction.
Until 2003, although assets formed in the future were recognized as an asset that could be used to secure obligations, the law only recognized assets formed in the future as real estate rom borrowed capital;
(2) The property is in the formative stage or is being created legally at the time of entering into the security transaction;
(3) Property has been formed and subject to registration of ownership, but only after the security transaction is concluded, such property can be registered in accordance with law
At this point, the scope of properties formed in the future has been greatly expanded than before, including real estate and movable property.
Current Vietnamese law
2.1 Overview of current Vietnamese law
Vietnamese law has now been developed quite fully to serve the purpose of regulating the legal relationship related to mortgages in general and mortgages of properties formed in the future in particular
The first thing to mention is the 2015 Civil Code and the system of guiding documents issued, specifically: Decree No 102/2017/ND-CP dated September 1,
2017 of the Government on registration security measures; Circular No 08/2018/TT-BTP dated June 20, 2018 of the Ministry of Justice guiding a number of registration
37 issues, providing information on security interests, contracts and exchanging information on registration security measures at transaction registration centers, assets of the National Register of Secured Transactions under the Ministry of Justice (amended and supplemented by Circular No 06/2020/TT-BTP dated 17/17/ December 2020 of the Ministry of Justice); Circular No 01/2019/TT-BTP dated January 17, 2019 guiding a number of contents on registration of security interests by aircraft and ships; Circular No 07/2019/TT-BTP dated November 25, 2019 guiding a number of contents on registration of mortgage of land use rights and land-attached assets; Joint Circular No 16/2014/TTLT-BTP-BTNMT-NHNN dated June 6, 2014 between the Ministry of Justice, the Ministry of Natural Resources and Environment, and the State Bank of Vietnam guiding a number of issues on financial handling collateral (Joint Circular No 16)
In addition to the general legal system on secured transactions, specialized laws govern this issue, including the Land Law and its guiding documents, the Law on Land, Housing, and Real Estate Business Other relevant documents also make adjustments in certain aspects, such as the Law on Construction, Law on Investment, Law on Planning, Tax Law, and Environmental Protection Law.
2.2 Problems and limitations in regulations
Regulations for aircraft mortgage deregistration need revision due to inconsistencies Clause 6, Article 32 of the Vietnam Civil Aviation Law outlines five scenarios for mortgage deregistration: (1) secured obligation termination; (2) mortgage contract cancellation; (3) collateral aircraft disposal; (4) effective legal judgment; and (5) arbitrator's decision However, these provisions require further clarification to ensure coherence and consistency in mortgage deregistrations.
38 cancellation of the mortgage of the aircraft or declaring the aircraft mortgage contract invalid; (v) At the request of the mortgagee of the aircraft Meanwhile, in Clause 1, Article 21 of Decree 102/2017/ND-CP, the cases of deregistration of security interests include 10 cases (applicable to the mortgage of aircraft), specifically: : (i) Termination of secured obligation; (ii) Cancellation or replacement of the registered security interest with another security interest; (iii) Replace all security assets with other assets; (iv) Finished handling of all security assets; (v) The security property is destroyed or completely lost; properties attached to land as security assets are demolished or confiscated under decisions of competent state agencies; (vi) There is a legally effective judgment, decision of the Court or an arbitral award on the cancellation of the security interest, declaring the security interest invalid; (vii) Unilaterally terminate the security interest or declare the termination of the security interest in other cases as prescribed by law; (viii) Deletion of registration of mortgage of property rights arising from a house sale and purchase contract in case of transition of mortgage registration as prescribed by law; (ix) The civil judgment enforcement agency or bailiff's office has distrained and finished handling the security property; (x) As agreed by the parties Thus, between the two basic legal documents, there is a lack of uniformity in the pledge and mortgage of aircrafts formed in the future 31
Secondly, the punishments for handling violations of the law in the real estate business that may arise in the future are not strictly regulated and not sufficiently deterrent According to the provisions of Decree No 139/2017/ND-CP dated 27/11/2017 of the Government, the highest administrative fine for prohibited acts in construction investment, real estate business, and housing development activities is only 300 million VND Compared to the potential profits gained from exploiting loopholes in the law in large-scale real estate projects worth hundreds or thousands of billions of dong, this fine is considered too lenient, potentially encouraging investors to intentionally violate the regulations.
31 Trần Văn Từ, Hoàn thiện pháp luật về giao dịch bảo đảm đối với loại động sản đặc thù là tàu bay, tàu biển hình thành trong tương lai, 2022 https://tapchitoaan.vn/bai-viet/xay-dung-phat-luat/hoan-thien-phap-luat- ve-giao-dich-bao-dam-doi-voi-loai-dong-san-dac-thu-la-tau-bay-tau-bien-hinh-thanh-trong-tuong- lai6216.html , truy cập 19/5/2022
39 the law regulations, accepting to pay fines, greatly affecting the interests of other subjects Legal sanctions, in addition to punishment and remedial action, also have to prevent and prevent violations of the law Therefore, the sanctions to handle violations in the field of buying and selling houses and construction works to be formed in the future must be really strong enough and must be stricter to have the effect of preventing and deterring threaten and prevent illegal acts 32
Third , there is no consensus in determining the value of collateral In Clause 2,
Article 306 of the 2015 Civil Code, it is required that "the valuation of security assets must be objective and consistent with the market price" This is an appropriate requirement to avoid the security assets being valued below the market price, affecting the interests of the secured party However, Article 306 does not specify whether this requirement applies to the case where the secured party and the guarantor agree on the security asset price, especially when the agreed price is clearly lower than the market price field of collateral? Furthermore, Clause 3, Article 306 only states that the compensation for damages applies to the valuation organization's violations during the asset valuation process, so it can be understood that the request for valuation is consistent with the market price Is it only applicable to pricing through a valuation organization? 33
32 ThS Đoàn Thị Ngọc Hải, Pháp luật về các loại hình kinh doanh bất động sản ở Việt Nam, 2019, https://stp.bacgiang.gov.vn/hien-thi-noi-dung/-/asset_publisher/wtMnvtGfRUNi/content/phap-luat-ve-cac- loai-hinh-kinh-doanh-bat-ong-san-o-viet- nam/pop_up?_101_INSTANCE_wtMnvtGfRUNi_languageId=vi_VN&_101_INSTANCE_wtMnvtGfRUNi_view Mode=print , truy cập 20/5/2022
33 Quỳnh Huệ, “Một số vướng mắc, bất cập về biện pháp bảo đảm trong hoạt động tín dụng, ngân hàng”, 2021, https://vksndthaibinh.gov.vn/Article/3986/Mot-so-vuong-mac-bat-cap-ve- bien-phap-bao-dam-trong-hoat-dong-tin-dung-ngan-hang.html , truy cập 20/5/2022
APPLICATION OF THE LAW IN PRACTICE AND RECOMMENDATIONS
Application of the law in practice
It can be seen that the movement and development of the economy - society - the law on mortgage of properties formed in the future in Vietnam is still limited, thus leading to disputes related to mortgage The assets formed in the future, especially those that have been resolved, are still relatively modest At present, there are still many different views on the application of the law on mortgage, especially mortgage of off-plan properties
Regarding the perspectives related to mortgage of property to secure obligations for third parties Currently, in the process of settling disputes, there are still some courts that hold the opinion that the use of collateral for loans to a third party is a guarantee measure and the security contract must be a three-party contract (the guarantor, guarantor, guarantor) This has caused difficulties and legal risks for credit institutions in the process of signing and implementing property mortgage contracts, facing the risk of third party mortgage contracts being declared invalid
Regarding the order of priority for mortgage payment In fact, there are cases where when a credit institution handles security assets, the creditor has expenses to contribute to the formation of the security asset (such as a work builder, a supplier of construction materials to a credit institution) works, ) request to be prioritized for payment from the proceeds from the sale of the collateral In this case, some Courts had the opinion of determining the credit institution to be prioritized for payment, while some other Courts also had a view of determining that the creditor has the cost of contributing to the formation of the account Guaranteed products have priority to pay first The 2015 Civil Code does not yet clearly stipulate the order of priority for
41 payment between credit institutions and creditors whose costs contribute to the formation of collateral
Regarding the competence to handle proceedings related to mortgage of property The Civil Procedure Code 2015 specifically stipulates the order and procedures for civil and business cases However, during the settlement process, between the Courts there were different views on the jurisdiction In determining the jurisdiction to consider and settle the case, the courts now understand very differently Some courts respect the agreement of the parties to be agreed in credit contracts or mortgage contracts conditions for the credit institution to focus on convenient handling of cases, to accept the content of the agreement to select the court where the credit institution's headquarters, branches and transaction offices are located In fact, there are many courts that have agreed to accept and handle the content of this agreement, but there are many courts that do not accept it, saying that it must be the court where the mortgaged property or the defendant's permanent residence is located single Therefore, in order for the lawsuits to be favorable, the proceeding agencies should agree to let the credit institution and the customer and the mortgagor actively choose the Court to handle the case when there is a dispute
In addition, the application of case law in the process of settling disputes related to mortgage of properties formed in the future is quite limited Up to now, the number of precedents on mortgage of properties formed in the future is not much and the quality of precedents (also known as new contribution) is still relatively limited
According to the data searched on the portal of the People's Court as of March
20, 2019, the whole country has 275 judgments and decisions of the district-level People's Courts with the application of case law For the provincial People's Court, there are 88 judgments and decisions that invoke precedent in the trial of civil cases 34
34 TS Nguyễn Văn Đại, Ths Trần Thị Thu Sương, “Áp dụng án lệ trong xét xử các vụ án dân sự, từ thực tiễn của tòa án nhân dân tỉnh Đồng Nai”, Tạp chí Tòa án, 14/10/2019
Specifically, Case Law No 43/2021/AL on the validity of the mortgage contract in the case that the mortgaged property is a house and land that the mortgagor accepts to transfer from another person but has not yet paid enough money to the seller 35
On November 3, 2008, Mr Duong Quoc K and Ms Pham Thi Kim H agreed to sell Ms L two houses for VND5,500,000,000 Ms L paid VND3,000,000,000, leaving a balance of VND2,500,000,000 due on November 3, 2009, in exchange for possession of the properties.
Ms L requested Mr K and Ms H to notarize the signature of Ms L in the name of the house so that Ms L could mortgage the bank Ms L mortgaged the above properties under the property mortgage contract No 6360- LCP-2009-00949 dated December 1, 2009 has been notarized and registered as collateral in accordance with the law During the performance of the contract, Ms L did not pay in full, until due,
Ms L only paid interest within the due date on May 12, 2010, so the Bank transferred the overdue debt to the credit contract and the contract appendices copper The bank sued and asked Ms L to pay the outstanding amount as of December 7, 2012 of VND 14,780.416,666, of which the principal debt was VND 8,000,000,000, interest owed within VND 2,879,083,333 and overdue interest 3,901,333,333 VND If Ms L is unable to pay the debt, the sale of the mortgaged property is requested to recover the debt
Contents of the precedent: “Regarding the realizing of mortgaged property: According to documents contained in the case file, it was determined that the mortgaged property being real estate at No 26Đ and 20/2T above belonged to Ms L, who received the assignment from Mr Duong Quoc K, Ms Pham Thi Kim H under the notarized transfer contracts of house ownership and residential land use rights dated November 4, 2008 On November 7, 2008, Ms L was granted a certificate of
35 https://anle.toaan.gov.vn/webcenter/ShowProperty?nodeId=/UCMServer/TAND165081 , truy cập ngày 22/5/2022
Ms L owns two houses since 2008 and has the right to use them as collateral for loans from the Bank Ms H and Mr K consented to the mortgage agreement, which was duly notarized and registered Despite Mr K and Ms H's belief that Ms L owes them 2,500,000,000 VND, the mortgage contracts are legally valid and enforceable If Ms L fails to pay the outstanding balance, Mr K and Ms H can file a lawsuit to recover the amount owed However, the Court of Appeal declared the mortgage contract invalid, Property No 6360-LCP-2009.
00949 between the Bank and Ms L for house No 26Đ and house No 20/2T, Ward
Q, District P, Ho Chi Minh City dated December 1, 2009 is incorrect, affecting the legitimate rights and interests of the plaintiff."
From the above-mentioned precedent, it can be seen that the content of the precedent is still adjudicated on the basis of the law, not the judge's arguments Therefore, the novelty and contribution of this precedent is still quite modest
From the trial practice of the Supreme Court of the countries, it is easy to see that the legal issues that are still left open have been overcome through case law, which is also the basis for the development of legal regulations Through adjudication practice, the Supreme Court of Japan has expanded the scope of collateral, including property that is the right to claim future formation, while the Japanese Civil Code does not seem to have any legal provisions 36 Regulations adjust this issue, in order to be compatible with the development of society.
Recommendations
36 ThS Liên Đăng Phước Hải, “Vai trò của án lệ trong việc hoàn thiện pháp luật về giao dịch bảo đảm tại Nhật Bản và các gợi mở cho Việt Nam”, Tạp chí Tòa án nhân dân, 2022
Stemming from the strong movement of the market, the obvious change comes from the heart of society, the need to build and perfect the legal basis for the formation, ownership, management and distribution of products The type of assets formed in the future as a resource for the rapid and sustainable development of the country is becoming more and more urgent
First , it is necessary to codify the Law on Secured Transactions This law will unify provisions scattered in different legal documents on a termite, making it more convenient to grasp Moreover, the promulgation of the Law on Registration of Secured Transactions instead of the current implementing decrees also reflects the importance of the secured relationship in society, a complex and related relationship to many important sectors as well as assets of great value in the economy
Second , it is necessary to clearly specify the privileges associated with the security right Those are the right to follow, the right to priority take debt over the property of any creditor The parties will freely agree on the method of handling the security property, if no agreement is reached, the right to handle will belong to the creditor
Specific legal documents and guidelines for future assets are crucial, including regulations for mortgages on aircraft to be formed in the future While Circular 01/2019 has separate records for aircraft, it lacks specific regulations for such mortgages Therefore, considering and adding "mortgages of future assets" to this document and Decree 102/2017/ND- is essential to ensure adequate legal protection.
CP, which only mentions mortgage of aircraft but Nor does it specify which ships will be formed in the future Therefore, it is also necessary to consider adding this provision to Decree 102/2017 to be applied in a more specific and detailed manner
Under Article 306 of the Civil Code, security asset valuation must align with market prices However, the article is ambiguous about applying this requirement to agreements between the secured party and guarantor when the agreed price falls below market value Additionally, Article 104(3)(c) of the Civil Procedure Code 2015 suggests that courts should intervene in property valuation only if parties undervalue assets to avoid obligations or due to unlawful appraisal practices.
Fifth , promote the improvement of the team of judges in both professional qualifications and moral qualities and ensure the independence of the Court The Court need to use their own explanation to find a solution of justice instead of waiting for the guiding documents from legal document-issuing agencies Strengthening and renewing the training of judges as well as regular capacity building work of judges Salary and compensation issues are also need to be taken care of so that judges can focus more on their professional work
Off-plan property has been and will become the main object in economic, commercial and civil transactions Therefore, mortgage of property formed in the future is becoming more and more essential The graduation paper has explained and clarified the basic theoretical issues about mortgage of off-plan properties in an overview and from the perspective of analysis and comparison
The graduation paper also analyzes and evaluates the current state of Vietnamese law from a theoretical and practical perspective, pointing out limitations and shortcomings in the current legal provisions on this issue On the basis of summarizing research results, the graduation paper makes recommendations to improve the law and improve the efficiency in the practical application of the law on mortgage of off-plan properties
The present study, nevertheless, has some restricts I am looking forward to receiving suggestions from lecturers to gain experiences and make additional premise for future research./
A Law, regulations and legal documents
2 The Vietnamese Civil Procedure Code 2015
5 Law on real estate trading 2014
6 Law on Civil Aviation of Vietnam 2006
9 Hoang Viet Trung ky Code 1947
11 The Ordinance on Economic Contracts of the State Council No 24- LCT/HDNN8
12 The Ordinance of the Council of State No 52-LCT/HDNN8
13 Decree No 102/2017/ND-CP on registration of security interests
14 Decree No 139/2017/ND-CP on penalties for administrative violations against regulations on investment and construction
15 Decree 11/2012/ND-CP amending and supplementing a number of articles of the Government's Decree No 163/ 2006/ND-CP of December 29, 2006, on secured transactions
16 Decree No 163/ 2006/ND-CP on secured transactions
19 F Terré và Ph Théry, Droit civil- Les biens, Dalloz, Paris, 1992, tr 30 ; Ph Malaurie và Laurent Aynès, Droit civil-Les biens, Cujas, Paris, 1998, tr 87 and
20 Pierre Voirin, Gilles Goubeaux Droit Civil: Personnes – Famille, Incapacité – Biens, Obligations – Sûreté 27 th edition 1999 Tr 606
21 Black's Law Dictionary, 9th edition
22 Đào Duy Anh (2000), Từ điển Hán Việt, Nxb Khoa học xã hội, Hà Nội,
23 TS Nguyễn Văn Đại, Ths Trần Thị Thu Sương, “Áp dụng án lệ trong xét xử các vụ án dân sự, từ thực tiễn của tòa án nhân dân tỉnh Đồng Nai”, Tạp chí Tòa án, 14/10/2019
24 ThS Liên Đăng Phước Hải, “Vai trò của án lệ trong việc hoàn thiện pháp luật về giao dịch bảo đảm tại Nhật Bản và các gợi mở cho Việt Nam”, Tạp chí Tòa án nhân dân, 2022
25 Nguyễn Trung Hiếu (2015), Thế chấp và xử lý tài sản thế chấp theo pháp luật dân sự Việt Nam hiện hành”
26 Vũ Thị Hồng Yến (2017), Tài sản thế chấp và xử lý tài sản thế chấp theo quy định của Bộ luật Dân sự năm 2015, Nhà Xuất bản Chính trị quốc gia Sự thật,
27 Vũ Thị Hồng Yến, “Bàn luận về giao dịch dân sự vô hiệu do vi phạm hình thức theo Điều 129 Bộ luật Dân sự năm 2015”
28 Nhà Pháp luật Việt – Pháp (2012), Kỷ yếu Tọa đàm về sửa đổi Bộ luật Dân sự, phần các biện pháp bảo đảm thực hiện nghĩa vụ, Hà Nội, 11-12/1/2012
29 Trường Đại học Luật Hà Nội (2014), Báo cáo phúc trình Đề tài khoa học cấp Trường: “Hoàn thiện chế định pháp luật về giao dịch bảo đảm”, TS Phạm Văn Tuyết làm chủ nhiệm, Hà Nội
30 Trần Đức Dũng (2018), “Thế chấp nhà ở vay vốn ngân hàng theo pháp luật Việt Nam”, Luận văn thạc sỹ luật học, Trường Đại học Mở
31 Đỗ Văn Đại (2014), “Một số vấn đề cơ bản về bảo đảm thực hiện nghĩa vụ dân sự”, tham luận trong Tài liệu Hội thảo quốc tế, Trường Đại học Luật Thành phố Hồ Chí Minh