Socialist Republic of Vietnam

GOVERNMENT

No. 17-1999-ND-CP Hanoi, 29 March 1999 (as amended 1 November 2001 )


DECREE ON PROCEDURES FOR CONVERSION, ASSIGNMENT, LEASE, SUBLEASE AND INHERITANCE OF LAND USE RIGHTS AND FOR MORTGAGE AND CAPITAL CONTRIBUTION OF VALUE OF LAND USE RIGHTS


The Government

Pursuant to the Law on the Organization of the Government dated 30 September 1992;

Pursuant to the Law on Land dated 14 July 1993 and Law on Amendment of and Addition to a Number of Articles of the Law on Land dated 2 December 1998;

Pursuant to the Civil Code dated 28 October 1995;

Following the proposal of the General Director of the General Department of Land Administration;

Decrees:


CHAPTER I

General Provisions

Article 1 Governing scope

1. This Decree stipulates the procedures for conversion, assignment, lease, sublease and inheritance of land use rights and for mortgage of, guarantee using, and capital contribution of the value of land use rights by economic organizations, family households and individuals.

2. The provisions of this Decree shall not apply to cases of public land rented from wards, communes and townships.

Article 2 Authority to exercise rights of land users

1. A person authorized by the head of a family household to exercise the rights of a land user may be a household member or another person other than a household member with full civil legal capacity in accordance with law.

2. A person authorized by an individual shall be the representative of that individual in exercising the rights of a land user.

3. A person authorized by the representative of an organization shall be the representative of that organization in exercising the rights of a land user.

4. The authorization for a representative to exercise the rights referred to in clauses 1, 2 and 3 of this article must be made in writing.

In the case of family households and individuals, the authorization must be certified by the people's committee of the commune, ward or township in which they reside in accordance with articles 48 to 53 inclusive of the Civil Code.

Article 3 Papers required for exercise of rights of land users

1. When exercising its rights, a land user must have a certificate of land use rights or a certificate of ownership of residential housing and right to use urban residential land (hereinafter referred to as certificate of land use rights) issued by the authorized State body. Certificates of land use rights shall be issued by the former General Department of Land and Field Management or by the General Department of Land Administration.

2. A current land user having one of the following papers shall be required to carry out procedures for issuance of a certificate of land use rights in order to be entitled to exercise the rights provided for in this Decree:

(a) Decision on land allocation or decision on land lease issued by the competent State body in accordance with the provisions of the laws on land;

(b) Papers issued by the State body authorized to allocate or lease out land in the process of implementation of land policies from time to time of the State of the Democratic Republic of Vietnam, the Provisional Revolutionary Government of the Republic of Southern Vietnam and the State of the Socialist Republic of Vietnam provided that the land allocatee or land lessee has been using the allocated or leased land continually since then;

(c) Provisional certificate of land use rights which has been issued by the authorized State body or registered in the cadastral book without any dispute;

(d) Papers issued by the authorized body of the former regime to a land user which has been using that land continually since then without any dispute;

(dd) Papers on inheritance, offer or donation of residential housing attached to land which has been certified by the people's committee of the commune, ward or township as not being the subject of any dispute;

(e) Judgement or decision of a people's court which has taken legal effect or decision on resolution of a land dispute of an authorized State body which has taken legal effect;

(g) Papers on hand-over of charitable housing;

(h) Papers on land assignment or sale and purchase of residential housing accompanied by the assignment of land use rights provided that the land has been verified by the people's committee of the commune, ward or township as not being the subject of any dispute and the verification result of the people's committee of the commune, ward or township has been certified by the people's committee of the district, provincial town or city.

3. When family households or individuals assign or inherit assets which they own and which are attached to land use rights, they must have a certificate of land use rights or one of the papers stipulated in clause 2 of this article.

4. In the case of economic organizations with land use rights legally assigned to them from others or with land leased from the State in respect of which land use fees payable are not funded from the State Budget, they shall be entitled to exercise the rights provided for in this Decree and shall not have to prepare an application for leasing land from the State.

5. The State body authorized to issue certificates of land use rights shall issue such certificates within thirty (30) days from the date of receipt of a complete and proper file to persons having papers relating to land use rights stipulated in clause 2 of this article.

Article 4 Purpose and term of land use upon exercise of rights

Upon conversion, assignment, lease, sublease or inheritance of land use rights and upon mortgage or capital contribution of the value of land use rights, the land must be used for the correct purposes and within the term of allocation or lease.


CHAPTER III

Assignment of Land Use Rights


SECTION 2

For Organizations

Article 12 Conditions for assignment of land use rights by economic organizations

An economic organization may transfer land use rights when it satisfies one of the following conditions:

1. The land is allocated by the State with collection of land use fees;

2. The land is acquired through lawful transfer of land use rights;

3. The land is leased by the State, the land rental has been paid for the whole lease term or for many years in advance, and the remaining land lease duration for which rental has been paid is at least five years.

Article 13 File for assignment of land use rights

Files for assignment of land use rights shall include:

1. Contract of assignment of land use rights;

2. Certificate of land use rights;

3. Extract of the map of the land lot being assigned;

4. Receipt proving payment of land use fees or lease rental (in the case of allocated land or leased land, respectively).

Article 14 Order for implementing assignment of land use rights

1. Files for assignment of land use rights shall be submitted to the Land Administration Office at the district level in the place where the land is located.

2. Within ten (10) days of receipt of a complete and proper file, the Land Administration Office at the district level shall examine it and certify the assignment in cases where the assignment is permitted in accordance with law; where the assignment does not satisfy the conditions for assignment, the file shall be returned to the applicant which shall be notified of the reasons why the assignment of land use rights is not permitted.

3. Within five days of receipt of a complete and proper file from the land authority at the district level, the people's committee of the district, provincial town or city shall complete certification on the contract of assignment of land use rights.

4. After the people's committee of the district, provincial town or city has certified the assignment, the land authority at the district level shall notify the parties to the assignment of the tax payable on the assignment of land use rights and the registration fee payable as prescribed by law.

5. After the parties have paid the tax on assignment of land use rights and the registration fee, the people's committee of the district, provincial town or city shall issue a certificate of land use rights to an assignee being a family household or individual or, in the case of an assignee being an economic organization, shall propose that the people's committee of the province or city under central authority issue a certificate of land use rights to the assignee.

6. The assignee of land use rights shall register the land use rights at the people's committee of the commune, ward or township where the land is located.


CHAPTER IV

Lease and Sublease of Land

SECTION 2

For Organizations

Article 19 Conditions for lease or sublease of land by economic organizations

1. Economic organizations may lease land use rights if they satisfy the following conditions:

(a) The land is allocated by the State with collection of land use fees; the land is acquired through lawful transfer of land use rights;

(b) The leased land has been invested in with the construction of architectural and infrastructure projects.

2. Economic organizations may sublease land use rights if they satisfy the following conditions:

(a) The land is leased from the State, the land rental has been paid for the whole lease term or for many years in advance, and the remaining land lease duration for which the land rental has been paid is at least five years;

(b) The subleased land has been invested in under a project.

Article 20 File for lease or sublease of land

Files for lease or sublease of land shall include:

1. Land lease or sublease contract;

2. Certificate of land use rights;

3. Extract of the map of the land lot being assigned;

4. Receipt proving payment of land use fees and land rental (in the case of allocated land or leased land, respectively).

Article 21 Procedures for lease or sublease of land

1. Files for lease or sublease of land shall be submitted to the Department of Land Administration or Department of Housing and Land Administration.

2. Within fifteen (15) days of receipt of a proper file, the Department of Land Administration or Department of Housing and Land Administration shall examine it and certify permission of the land lease or sublease in section 2, part II (reserved for the State body only) of the land lease or sublease contract; where the lease or sublease is not permitted, the file shall be returned to the applicant organization which shall be notified of the reasons therefor.

3. Upon obtaining certification of permission for the land lease or sublease, the lessor or sublessor shall register the land lease or sublease at the peoples committee of the commune, ward or township where the land is located.


CHAPTER VI

Mortgage of Value of Land Use Rights

SECTION 2

For Organizations

Article 27 Conditions for mortgage of value of land use rights

Economic organizations may mortgage the value of land use rights at Vietnamese credit institutions if they satisfy one of the following conditions:

1. The land is allocated by the State with collection of land use fees.

2. The land is acquired through lawful transfer of land use rights.

3. The land is leased from the State, the organization has paid land rental for the whole lease term or for many years in advance, and the remaining land lease duration for which the land rental has been paid is at least five years. The mortgaged value of land use rights in the case of leased land shall include the damages at the time of land leasing by the State (if any), the land rental already paid to the State after deducting the amount of land rental payable for the period during which the land has been used, and the value of assets attached to the land.

A mortgage of the value of land use rights of leased land for the purpose of borrowing a short-term loan where the remaining land lease duration for which land rental has been paid is less than five years shall be implemented in accordance with the regulations of the State Bank of Vietnam.

4. Economic organizations which are allocated with land by the State without collection of land use fees for the purpose of agricultural production, forestry, aquaculture or salt production or which are leasing land from the State and paying land rental annually shall be permitted to mortgage only the assets under their ownership attached to that land.

Article 28 File for mortgage of value of land use rights

Files for mortgage of the value of land use rights shall include:

1. Contract of mortgage of the value of land use rights;

2. Certificate of land use rights;

3. Extract of the map of the land lot;

4. Receipt for payment of land rental (in the case of leased land).

Article 29 Procedures for mortgage of value of land use rights

1. The mortgagor shall declare the contents required by it in part I (reserved for the parties) of the mortgage contract and submit the mortgage file to the Department of Land Administration or Department of Housing and Land Administration of the locality where the land is located.

2. Within seven days of receipt of a complete file, the Department of Land Administration or Department of Housing and Land Administration shall verify the file and certify permission of the mortgage in section 2, part II (reserved for the State body only) of the mortgage contract; in cases where a mortgage is not permitted, the file shall be returned to the applicant organization which shall be notified of the reasons therefor.

3. Upon obtaining certification of permission for the mortgage from the Department of Land Administration or Department of Housing and Land Administration, the mortgagor and the mortgagee shall sign the mortgage contract.

4. The mortgagor shall register the mortgage at the Department of Land Administration or Department of Housing and Land Administration.

Article 29a Guarantee using value of land use rights

1. Economic organizations using land in respect of which they are permitted to mortgage the value of land use rights pursuant to article 27 of this Decree shall also have the right to provide a guarantee using the value of the land use rights to credit institutions licensed to operate in Vietnam.

2. Files for guarantees using the value of land use rights shall comprise the contract of guarantee using the value of land use rights and the papers stipulated in clauses 2, 3 and 4 of article 28 of this Decree.

3. The guarantor shall lodge the guarantee file with the Department of Land Administration or Department of Housing and Land Administration (both hereinafter referred to as Department of Land Administration) of the locality where the land is located.

4. Within seven days of receipt of a complete and proper file, the Department of Land Administration shall verify the file and certify permission for the guarantee on the guarantee contract; in cases where a guarantee is not permitted, the file shall be returned to the applicant which shall be notified of the reasons therefor.

5. After the parties have entered into a contract of guarantee, the guarantor or beneficiary must register it at the Department of Land Administration where the land is located. After registration, the credit institution which is the beneficiary shall make the loan in accordance with the agreements in the loan contract.

SECTION 3

Release of Mortgages and Dealing with Mortgaged Land Use Rights
for Purpose of Debt Recovery

Article 30 Release of mortgages and guarantees

1. When a mortgagor or principal has fulfilled the debt payment obligations to the mortgagee or beneficiary, the mortgagee or beneficiary shall release the mortgage or guarantee in accordance with the provisions in the mortgage contract or guarantee contract.

2. The mortgagor or principal shall send the mortgage contract or guarantee contract for the purpose of release of registration as follows:

(a) If the mortgagor or principal is a family household or individual, the contract shall be sent to the people's committee of the commune, ward or township where the mortgage was registered;

(b) If the mortgagor or principal is an economic organization, the contract shall be sent to the Department of Land Administration.

Article 31 Dealing with mortgaged or guaranteed land use rights for purpose of debt recovery

1. When a mortgagor of, or principal under a guarantee using, the value of land use rights fails to fulfill, or to fulfill properly, the debt payment obligations according to the mortgage contract or guarantee contract, the mortgaged or guaranteed land use rights shall be dealt with as agreed in the contract; where they cannot be dealt with as agreed in the contract, the mortgagee or beneficiary shall have the right to transfer the use rights of the mortgaged or guaranteed land to another person for the purpose of debt recovery (except in the case of a mortgage or guarantee by a family household or a farmer) or to request the authorized State body to hold an auction or to institute proceedings in accordance with law.

2. Upon completion of dealing with the mortgaged or guaranteed land use rights for the purpose of debt recovery, the mortgagor or guarantor shall attend the State body stipulated in article 30.2 of this Decree in order to release the mortgage registration or release the guarantee registration.

3. The recipient of land use rights stipulated in this article shall be issued with a certificate of land use rights.


CHAPTER VII

Capital Contribution in Form of Value of Land Use Rights

SECTION 2

For Organizations

Article 35 Conditions for capital contribution in form of value of land use rights

Economic organizations using land may contribute capital in the form of the value of land use rights for the purpose of production and/or business co-operation with domestic and foreign organizations and/or individuals if they satisfy one of the following conditions:

1. The land is allocated by the State without collection of land use fees for the purpose of agricultural production, forestry, aquaculture or salt production;

2. The land is allocated by the State with collection of land use fees;

3. The land is acquired through lawful transfer of land use rights;

4. The land is leased by the State, the land rental has been paid for the whole lease term or for many years in advance, and the remaining land lease duration for which the land rental has been paid is at least five years;

5. Where the land is leased by the State to a State owned enterprise which pays the land rental annually, the permission of the Prime Minister shall be required for capital contribution to be made in the form of the value of land use rights to joint ventures with foreign organizations or individuals.

Article 36 File for capital contribution

Files for capital contribution in the form of the value of land use rights shall include:

1. Declaration of capital contribution in the form of the value of land use rights in accordance with Form 5a issued with this Decree;

2. Certificate of land use rights;

3. Extract of the map of the land lot;

4. Receipt for payment of land rental.

Article 37 Procedures for capital contribution in form of value of land use rights for domestic organizations and individuals

1. The capital contributor shall submit the capital contribution file to the Department of Land Administration or Department of Housing and Land Administration in the locality where the land is located.

2. Within ten (10) days of receipt of a proper file, the Department of Land Administration or Department of Housing and Land Administration shall examine it and certify permission of capital contribution in part II (reserved for the State body only) of the capital contribution declaration form; where capital contribution is not permitted, the file shall be returned to the applicant organization which shall be notified of the reasons therefor.

3. Upon obtaining certification of permission for capital contribution in the form of the value of land use rights, the capital contributor shall complete the investment procedures as prescribed by law.

In cases where there is a new legal entity using land, such legal entity shall register the land use rights and be issued with a certificate of land use rights.

In cases where there is no new legal entity using land, such land shall remain within the use rights of the capital contributor. The capital contributor shall register the capital contribution in the form of the value of land use rights at the peoples committee of the commune, ward or township where the land is located.

Article 38 Procedures for capital contribution in form of value of land use rights to joint ventures with foreign organizations or individuals

1. The capital contributor shall submit the file to the Department of Land Administration or Department of Housing and Land Administration of the locality where the land is located.

2. Within fifteen (15) days of receipt of a proper file, the Department of Land Administration or Department of Housing and Land Administration shall verify it and certify permission of capital contribution in part II (reserved for the State body) of the capital contribution declaration form.

In the case of capital contribution in the form of the value of land use rights by a State owned enterprise which leases land from the State and pays land rental annually, the Department of Land Administration or Department of Housing and Land Administration shall submit the file to the peoples committee of the province or city under central authority for submission to the Prime Minister.

3. Upon obtaining approval and certification from the authorized State body of permission for capital contribution in the form of the value of land use rights, the parties to the joint venture contract shall proceed with the investment procedures as prescribed by law.

4. Upon issuance of the investment license, the joint venture enterprise shall register the land use rights at the peoples committee of the commune, ward or township where the land is located and shall be issued with a certificate of land use rights.

SECTION 3

Termination of Capital Contribution in Form of
Value of Land Use Rights

Article 39 Termination of capital contribution in form of value of land use rights

Capital contribution in the form of the value of land use rights shall terminate in the following cases:

1. The duration of the capital contribution in the form of the value of land use rights expires;

2. It is so proposed by one or more parties; for joint ventures with foreign organizations or individuals, approval of the authorized State body shall be required;

3. It is so decided by the authorized State body, due to serious breaches of the provisions of the laws on land;

4. A declaration on bankruptcy is made;

5. Due to dissolution;

6. The individual who concludes the capital contribution contract dies; other legal persons or entities terminate the capital contribution contract which must be performed by such individuals, legal persons or entities.

Article 40 Dealing with land use rights upon termination of capital contribution in form of value of land use rights

Upon termination of capital contribution in the form of the value of land use rights, the land use rights shall be dealt with as follows:

1. In the cases stipulated in clauses 1 and 2 of article 39 of this Decree, the party contributing capital in the form of the value of land use rights shall be entitled to continue using that land for the remaining period of the land use term.

Where the land use term has expired, the State shall recover the land according to the provisions of the laws on land; if the land user wishes to continue using that land, the State shall consider and allow the use thereof in accordance with the provisions of the law.

2. In the cases stipulated in clause 3 of article 39 of this Decree, the State shall recover the land.

3. In the case where a joint venture enterprise goes bankrupt, the land use rights which have been contributed as capital shall be dealt with accordingly to the decision of the People's Court declaring the enterprise bankrupt.

The recipient of the land use rights and any assets attached to that land being a domestic organization or individual shall be entitled to continue using that land for the prescribed purposes for the remaining period of the land allocation or land lease term.

The recipient of the land use rights and any assets attached to that land being a foreign organization or individual shall be permitted to lease that land from the State and shall use the land for the purposes as prescribed by law.

In cases where there is no recipient of the land use rights and any assets attached to that land, the State shall recover the land.

4. In cases where the individual who concludes the capital contribution contract dies, the land use rights used for capital contribution may be bequeathed in accordance with the provisions of the law.

5. In cases of dissolution, the land use rights used for capital contribution shall be dealt with according to the agreement between the parties.


CHAPTER VIII

Organization of Implementation

Article 41 Responsibilities of land users

Upon exercising the right to convert, assign, lease, sublease or inherit land use rights or to mortgage or contribute capital in the form of the value of land use rights, organizations, family households and individuals using land shall comply with the provisions of this Decree and perform financial obligations as prescribed by law.

Article 42 Responsibilities of General Department of Land Administration and Ministry of Finance

The General Department of Land Administration and the Ministry of Finance shall determine the rates of land administration fees payable for conversion, assignment, lease, sublease and inheritance of land use rights as well as for mortgage and capital contribution in the form of the value of land use rights.

The General Department of Land Administration shall provide guidance on the order and procedures for application for allocation and lease of land for the purpose of capital contribution to joint ventures with domestic and foreign organizations or individuals.

Article 43 Dealing with breaches

1. Any person who commits acts of fraud, falsifies papers, fails to comply strictly with the provisions of this Decree, or fails to abide by the State regulations on financial obligations when exercising the rights of a land user as stipulated in this Decree shall, depending on the seriousness of the breach, be subject to administrative penalties or be prosecuted for criminal liability.

2. Any person who abuses his or her position or power or acts beyond his or her power to allow a transfer of land use rights which is contrary to the provisions of this Decree; causes difficulties to land users or prevents them from exercising their rights; or protects people in breach of the laws on land shall, depending on the seriousness of the breach, be disciplined or prosecuted for criminal liability.

3. Any person in breach of the provisions of this Decree, thereby causing damage to other persons shall, in addition to being dealt with according to clauses 1 and 2 of this article, compensate the injured person for any damage.

Article 44 Effectiveness

This Decree shall be of full force and effect after fifteen (15) days from the date of its signing. All previous provisions which are inconsistent with this Decree are hereby repealed.

Article 45 Organization of implementation

Ministers, heads of ministerial equivalent bodies, heads of Government bodies, and chairmen of peoples committees of provinces and cities under central authority shall, within the scope of their tasks and powers, be responsible for organizing the implementation of this Decree.

On behalf of the Government
The Prime Minister

PHAN VAN KHAI



Article 2 of Decree 79-2001-ND-CP of the Government dated 1 November 2001 provides:

1. Applicability of procedures for transfer of land use rights and of assets attached to land in a number of particular cases:

(a) Procedures for sublease and mortgage of land use rights and assets attached to land of Vietnamese residing overseas and of foreign organizations and individuals leasing in Vietnam under the Law on Foreign Investment in Vietnam shall also be implemented in accordance with the provisions in Decree 17-1999-ND-CP dated 29 March 1999 (as amended).

With respect to joint venture enterprises where the Vietnamese party contributes capital in the form of land use rights pursuant to article 92 of Decree 24-2000-ND-CP of the Government dated 31 July 2000 providing detailed regulations on implementation of the Law on Foreign Investment in Vietnam, where land use rights and assets attached to land are mortgaged, the following implementing provisions shall apply:

· The mortgage file shall include the papers stipulated in clauses 1, 2 and 3 of article 28 of Decree 17-1999-ND-CP (as amended) and, in addition, the contract for capital contribution in the form of land use rights;

· Mortgage procedures shall be implemented in accordance with the provisions in articles 29, 30 and 31 of Decree 17-1999-ND-CP (as amended).

(b) Procedures for assignment, inheritance, mortgage, guarantee and capital contribution of assets attached to land belonging to economic organizations, family households and individuals shall also be implemented in accordance with the provisions in Decree 17-1999-ND-CP (as amended).

2. The following forms issued with Decree 17-1999-ND-CP are repealed: form of contract for conversion of land use rights, form of contract for assignment of land use rights, form of contract for leasing and subleasing land, form of contract for mortgage of land use rights, and form of declaration of termination of capital contribution in the form of value of land use rights. The General Department of Land Administration shall promulgate sample contract forms in order for land users to exercise their rights.