1. Legal basis:

• Land Law 2013;

• Notary law;

• Law on credit institutions;

• Decree 01/2021/ ND-CP stipulating the implementation of the civil code on guaranteeing obligations

2. Can economic organizations other than banks or credit institutions accept mortgages of land use rights?

Answer: Yes, in case the mortgagor is an individual or a household

Legal grounds

2.1. In case the mortgagor is an individual or household:

According to the provisions of Point g, Clause 1, Article 179 of the Land Law: Households and individuals use agricultural land allocated by the State within the limit; land allocated by the State with collection of land use levy, leased out with one-off rental payment for the entire lease term, and recognized by the State with land use rights; Land that is converted, transferred, donated or inherited, has the following rights and obligations:

Mortgage of land use rights at credit institutions licensed to operate in Vietnam, at other economic organizations or individuals as prescribed by law.

=> Thus, if the mortgagor is an individual or a household, the mortgagee is not only a credit institution, but is also allowed to be another economic organization or an individual as prescribed by law.

2.2. In case the mortgagor is an economic organization that is allocated land by the State with the collection of land use levy, or leases the land with one-off rental payment for the entire lease period.

According to the provisions of point d, clause 2, article 174 of the Land Law: “mortgage with land use rights and properties under their ownership attached to land at credit institutions licensed to operate in Vietnam”

Thus, if the mortgagor is an organization, the mortgagee may only be a credit institution operating in Vietnam.

2.3. On May 15, 2021, Decree 21/2021/ND-CP took effect, providing clearer guidance on economic organizations that are not credit institutions entitled to receive mortgages.

Specifically, the above content applies to the mortgagor: Households and individuals using land. However, the following legal requirements must be met:

“- The mortgagee is an economic organization under the Land Law, an individual is a Vietnamese citizen with full civil act capacity;

– The acceptance of mortgage to secure the performance of obligations does not violate the prohibition of the Civil Code, other relevant laws, and does not violate social ethics in contractual relations with respect to investment, construction, lease, and investment projects. contracting, services, other transactions;

– In case the secured obligation includes interest payment, the interest arising from late payment, interest on the due principal, interest on overdue principal, interest on unpaid interest or other interest or interest shall be applied. application must not exceed the agreed limit on interest and interest rates specified in Clause 2, Article 357, Clause 5, Article 466 and Article 468 of the Civil Code. Where there is agreement on handling of the obligor’s non-payment of debts on time and there are no other provisions of law, only one handling shall be made for each act of non-payment of debt on time;

– Other valid conditions of civil transactions as prescribed by the Civil Code and other relevant laws.”

According to the provisions of Clause 27, Article 3 of the Land Law: “Economic organizations include enterprises, cooperatives and other economic organizations as prescribed by civil law, except for enterprises with investment capital. foreign.”

Thus: Economic organizations that are not banks or credit institutions may mortgage land use rights in case the mortgagor is an individual or a household.

Above is the advice of Khoa Tin on “Can individuals mortgage land use rights?”.

In case customers have unclear issues or need to discuss further, please call us immediately at 0983.533.005 for a free consultation.

Best regards./.