Housing mortgage conditions formed in the future

Housing is both an object of civil transactions serving the housing needs of people and an object of commercial transactions of housing businesses. With a fairly open policy for investment in construction and housing development in Vietnam today, mortgaging houses formed in the future is increasingly popular.

Can investors mortgage future houses within their housing construction project to borrow capital to implement that project?

The mortgage of a house to be formed in the future is the mortgagor’s use of a house owned by him that is in the process of being formed or has been formed but has not yet carried out ownership registration procedures and has not been granted a Certificate of ownership to ensure proper performance of civil obligations towards the mortgagee. The mortgagor does not transfer the property but only hands over to the mortgagee the documents related to the housing property.

Article 147 of the Housing Law 2014 on Mortgage of housing construction investment projects and mortgage of future houses stipulates:

“1. Investors of housing construction projects may mortgage the project or housing built in the project at credit institutions operating in Vietnam to borrow capital for project investment or housing construction; In case the investor has mortgaged the house and needs to mobilize capital to divide the house according to the provisions of the law on housing or wants to sell or lease to buy that house, the house mortgage must be released before signing a contract to mobilize capital contribution, a contract to buy, sell, or lease a house with the customer, unless otherwise agreed by the capital contributor, the house buyer, the house lease purchaser, and the mortgagee.

Determining that the house has been mortgaged before signing a contract to mobilize capital contribution, a contract to buy and sell or lease a house with the customer according to the provisions of this clause is clearly stated in the written notice of qualified housing sold by the provincial housing management agency where the house is located.

2. Organizations and individuals building houses to be formed in the future on their legal residential land plots; Organizations and individuals purchasing houses to be formed in the future in a housing construction investment project of the investor may mortgage this house at a credit institution operating in Vietnam to borrow capital for construction a house or buy a house there.”

Housing mortgage conditions formed in the future

Pursuant to Article 148 of the 2014 Housing Law and Article 7 of Circular 26/2015/TT-NHNN on Conditions for mortgage of housing construction investment projects, mortgage of future housing is prescribed as follows:

• In case the investor mortgages part or all of a housing construction investment project, it must have:

+ Project profile, with approved project technical design;

+ Certificate or decision on land allocation or land lease from a competent state agency;

+ Is a housing construction investment project that is mortgaged to borrow capital according to the provisions of Circular 26/2015/TT-NHNN and is one of the housing construction investment projects specified in Clause 2, Article 17 of the Housing Law accommodation, including:

(i) Investment projects to build new or renovate an independent housing project or a cluster of housing projects.

(ii) Investment projects to build housing areas with synchronous technical and social infrastructure systems in rural areas.

(iii) Urban area construction investment projects or mixed land use projects that reserve land area in the project for housing construction.

(iv) Construction investment projects for mixed-use purposes for residence and business.

• In case the investor mortgages future housing built in the project, in addition to the conditions specified in the Housing Law 2014, the following conditions must also be met:

+ The mortgaged house must have a foundation that has been completely built according to the provisions of construction law;

+ Not part of the project that the investor has mortgaged;

+ Not subject to any disputes, complaints or lawsuits regarding ownership rights;

+ Not being distrained to execute a judgment or not being distrained to comply with a legally effective administrative decision of a competent state agency;

+ Not subject to a land recovery decision or notice of house clearance or demolition by a competent state agency.

• In case an organization or individual mortgages a house as prescribed in Clause 2, Article 147 of the Housing Law 2014, the following conditions must be met:

+ For organizations and individuals mortgaging future housing built on their legal residential land plot:

(i) Have documents certifying legal residential land use rights according to the provisions of land law;

(ii) Have a Construction Permit if a construction permit is required according to relevant laws;

(iii) Not subject to any disputes, complaints or lawsuits regarding ownership rights;

(iv) Not being distrained to execute a judgment or not being distrained to comply with a legally effective administrative decision of a competent state agency;

(v) Not subject to a land recovery decision or notice of house clearance or demolition by a competent state agency.

+ For organizations and individuals mortgaging future houses purchased from investors in housing construction investment projects:

(i) There is a housing purchase contract signed with the investor;

(ii) Have a document transferring the house purchase and sale contract if you are the transferee of the house sale contract according to regulations;

(iii) Have documents proving that the housing purchase price has been paid to the investor according to the agreed schedule in the housing purchase contract;

(iv) Not subject to any complaints, lawsuits, or disputes regarding the housing purchase contract or the transfer of this housing purchase contract;

(v) Not being distrained to execute a judgment or not being distrained to comply with a legally effective administrative decision of a competent state agency;

(vi) Not subject to a land recovery decision or notice of house clearance or demolition by a competent state agency.

In case a mortgagor of a house to be formed in the future buys a house from an investor in a housing construction investment project, there must be a house purchase and sale contract signed with the investor and a transfer document housing purchase and sale contract if you are the transferee of the housing purchase contract according to regulations, have documents proving that you have paid the housing purchase price to the investor according to the agreed schedule in the purchase and sale contract and are not subject to there are complaints, lawsuits, disputes about the housing purchase contract or the transfer of this housing purchase contract.

Mortgages of housing construction investment projects and mortgages of houses formed in the future can only be carried out in accordance with the provisions of the Housing Law; Cases of mortgage of property that is a housing construction investment project or future housing formation that does not comply with the provisions of the Housing Law are not legally valid.

Recommendations of LS Law Firm

Above are the basic contents of housing mortgage conditions formed in the future based on the provisions of law at the time of writing. If you need advice on the above issue or are interested in other legal services, please contact LS Law Firm immediately via Email: lslawfirm2014@gmail.com for timely support.

Note: The above article is for reference only, any copying or use of the article as personal evidence in any case or matter is considered unauthorized./.