VIETNAM NATIONAL UNIVERSITY HANOI SCHOOL OF LAW NGUYỄN VŨ PHƯƠNG ANH MORTGAGING THE OFF–PLAN PROPERTY – THEORY AND PRACTICE GRADUATION PAPER Science Instructor: PHD. LECTURER NGUYỄN THỊ PHƯƠNG CHÂM Ha Noi – 2022 1 VIETNAM NATIONAL UNIVERSITY HANOI SCHOOL OF LAW NGUYỄN VŨ PHƯƠNG ANH MORTGAGING THE OFF–PLAN PROPERTY – THEORY AND PRACTICE GRADUATION PAPER Science Instructor: PHD. LECTURER NGUYỄN THỊ PHƯƠNG CHÂM Ha Noi – 2022 2 COMMITMENT I hereby declare that this graduation paper is my own research. The documents and materials used in the report have clear sources, the research results are my honest work.
I sincerely thank! STUDENT Nguyễn Vũ Phương Anh 3 TABLE OF CONTENTS INTRODUCTION. Rationale of the study. Research objects and scope of the study. Organisation of the study.
SOME THEORETICAL ISSUES RELATED TO MORTGAGE OF OFF- PLAN PROPERTIES. The concept, nature and role of mortgage. The concept of mortgage. The nature of mortgage.
The role of mortgage. Empowering more creditor's rights. Enhance the debtor's willing to fulfill obligations. Ensuring the safety of the credit institution system and promoting credit activities 14 2.
Concepts and constitutive elements of off-planed assets. Constitutive elements of off-planed assets. Specific legal issues. Basis for establishing mortgage.
Effect of the mortgage security measure between the parties. Effect against third party. Termination of mortgage. Realization of the property.
Principles of realization. Legal basements for realization. A secured obligation is breached when due. When the secured obligation is breached ahead of time due to the agreement of the parties in the contract or provided for by law.
The law stipulates that the mortgaged property must be disposed of in order for the mortgagor to perform other obligations. Other cases as agreed by the parties or prescribed by law. Method of realization. Order of priority of payment.
The differences between the two systems Common Law and Civil Law. VIETNAMESE LAW ON MORTGAGE OF OFF-PLAN PROPERTIES. History of formation and development of Vietnamese law on mortgage of off-plan properties. Feudal and French colonial period.
The period from 1945 to 1995. The period from 1995 to 2015. Current Vietnamese law. Overview of current Vietnamese law.
Problems and limitations in regulations. APPLICATION OF THE LAW IN PRACTICE AND RECOMMENDATIONS. Application of the law in practice. 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. 6 - 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 Court Journal. In addition, mortgaging of off-plan assets is also studied as part of an independent topic, not a complete one.
It can be seen that the number of studies on the mortgage of off-plan properties is restricted. 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. 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. 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 8 CHAPTER I.
SOME THEORETICAL ISSUES RELATED TO MORTGAGE OF OFF-PLAN PROPERTIES A. Theoretical background In the 6th century, the theory of property rights appeared and was used in ancient Roman law. Scholars from the time of the emperor Justinian have considered the doctrine of jus in re – jus ad rem as the model when designing law. According to the development of the history of civil law to the present, in general, the laws of countries have been affected by Civil Law.
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 / A secure property right (in French: sûreté réelle) is a legal claim on an asset. It indicates the direct – and – immediate rights of holder on the assest that its owner used to guarantee the performance of an obligation.
Secure property rights is considered as a measure that increases the bondholder's power, without depending on others, allowing the bondholder to have a special interest in the debtor's property.2 This concept also comes from the Continental European legal system. 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. Terré và Ph. Théry, Droit civil- Les biens, Dalloz, Paris, 1992, tr.
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.
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.vn/UserControls/News/pFormPrint.aspx?UrlListProcess=/qt/tintuc/Lists/NghienCuuTraoDo i&ListId=75a8df79-a725-4fd5-9592-517f443c27b6&SiteId=b11f9e79-d495-439f-98e6- 9 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. The concept, nature and role of mortgage 1.
The concept 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=2333&SiteRootID=b71e67e4-9250-47a7-96d6-64e9cb69ccf3 , truy cập ngày 19/03/2022 10 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. 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 8 Article 292, Civil Code 2015 11 of the measures to secure the performance of an obligatory obligation using assest as the collateral.