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The Ultimate Guide to Real Estate Transactions in 2022

The Latest Land Buying and Selling Procedures as per the Law in 2022: A Step-by-Step Guide. Learn about the intricate process of land transactions with our comprehensive guide. Uncover the specifics of contract notarization and uncover the nuances of financial obligation declarations.

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13 July, 2024

What procedures are involved in a real estate transaction, and what are the conditions for a valid sale? Additionally, what are the associated costs? Let’s find out together in the article below!

1Conditions for Sale and Transfer of Land Use Rights

Conditions for the Transferor

According to Clause 1, Article 188 of the 2013 Land Law, a land user may transfer land use rights if the following conditions are met:

Possess a certificate of land use rights (except for cases specified in Clause 3, Article 186 and cases of inheritance as stipulated in Clause 1, Article 168 of the 2013 Land Law)
The land is not subject to any disputes.
The land use rights are not subject to any enforcement measures for the execution of court judgments.
The land is within the duration of land use rights.

In certain cases, in addition to the transferor meeting the above conditions, the transferee must also not fall under any prohibition from receiving the transfer.

Conditions for Sale and Transfer of Land Use Rights

Conditions for the Transferee

The following individuals are not entitled to receive a transfer of land use rights:

Individuals who are foreigners permanently residing in Vietnam, overseas Vietnamese, or foreign-invested enterprises, as well as households, religious organizations, communities, organizations, or individuals of Vietnamese nationality.
Economic organizations are not allowed to receive transfers of land used for growing rice or special-use forests, nor land for protective purposes from individuals or households, unless approved by a competent authority.
Households or individuals who are not directly engaged in agricultural production are not permitted to receive transfers of land use rights for rice cultivation.
Households or individuals who do not reside in the area of protective or special-use forests are not entitled to receive transfers of agricultural land use rights within these forest areas.

2Procedure for Real Estate Transactions

To ensure compliance with the procedure for real estate transactions, the following steps should be carefully followed:

Step 1 Notarization and Authentication of Relevant Documents

According to Article 42 of the 2014 Notary Law, the land transfer contract must be notarized at a notary office or notary public office within the province or city where the land to be transferred is located.

Sample Real Estate Purchase and Sale Contract

According to Articles 40 and 41 of the 2014 Notary Law, the following documents must be prepared:

For the Transferor:

Certificate of land use rights.
Household registration book.
Copy of ID card, citizen identification card, or passport.
Marriage registration or marital status certificate.
If the transferor is authorized to transfer the land, a power of attorney is required.

For the Transferee:

Household registration book.
Copy of ID card, citizen identification card, or passport.
Marriage registration or marital status certificate.

Step 2 Declaration of Financial Obligations

The transferring individual is responsible for declaring their financial obligations by paying the registration fee and personal income tax, unless they are exempt as stipulated in Clause a.1, Point a, Clause 3, Article 16 of Circular No. 156/2013/TT-BTC and Clause 1, Article 10 of Decree No. 140/2016/ND-CP.

Step 3 Procedure for Transfer of the Red Book

The transfer of the Red Book is extremely important

According to Articles 40 and 41 of the 2014 Notary Law, the following documents must be prepared:

For the Transferor of the Real Estate:

Red Book, household registration book.
ID card or citizen identification card.
Marriage certificate or marital status certificate.
Power of attorney (in case the transferor is authorized to transfer the land).

For the Transferee of the Real Estate:

Household registration book.
ID card or citizen identification card.
Marriage certificate or marital status certificate.

After preparing the necessary documents and paying the required fees, the dossier should be submitted to the district-level branch of the Land Registration Office, where the land to be transferred is located.

3Frequently Asked Questions about Real Estate Transaction Procedures

Can Land under Planning be Transferred?

To determine if a plot of land is subject to planning, the following methods can be employed:

Review the land use planning directly at the People’s Committee of the district or commune level.
Access the online portal of the district-level People’s Committee.
Consult with the commune-level land official or local residents in the area where the land is located for additional information.
Obtain information from the Land Registration Office.

According to Article 49 of the 2013 Land Law, as amended and supplemented by the Law Amending and Supplementing a Number of Articles of 37 Laws Related to Planning in 2018, if the land use planning has been announced but there is no annual land use plan at the district level, the land user may continue to use the land and exercise the rights of the land user in accordance with the law.

In the case of an annual land use plan at the district level, the land user in the area (where land use purpose conversion and land recovery are required according to the plan) may continue to exercise the rights of the land user but may not construct new houses, works, or plant perennial crops. If the land user has a need for renovation or repair of existing houses or works, they must obtain permission from the competent state agency in accordance with the law.

Land under Planning

Based on the above provisions, if the land use planning has been announced but there is no annual land use plan at the district level, or if there is an annual land use plan at the district level, the land user in the area who is subject to land use purpose conversion and land recovery according to the plan may continue to exercise the rights of the land user, including the right to transfer, mortgage, and contribute capital with land use rights as stipulated in Article 167 of the 2013 Land Law.

In summary, land under planning can still be transferred, provided that the following conditions specified in Clause 1, Article 188 of the 2013 Land Law are met:

Possess a certificate of land use rights, except for cases specified in Clause 3, Article 186 and cases of inheritance as stipulated in Clause 1, Article 168 of the 2013 Land Law.
The land is not subject to any disputes.
The land use rights are not subject to any enforcement measures for the execution of court judgments.
The land is within the duration of land use rights.

If the land under planning meets the conditions for transfer, the transfer procedure is similar to that of a typical land use rights transfer. First, both parties must go to a notary office to create a land use rights transfer contract and have it notarized.

Next, the financial obligations must be declared at the Land Registration Office. Following this, the dossier for the change of name must be submitted. Finally, both parties pay the required fees and receive the Red Book, thus completing the process.

What is the Notarization Procedure for Real Estate Transactions?

Step 1 Prepare the Dossier for Notarization

According to Clause 1, Article 40 and Article 41 of the 2014 Notary Law, the parties must prepare a dossier consisting of the following documents:

For the Seller:

Certificate of land use rights.
Personal identification documents: ID card/citizen identification card/passport (for both husband and wife).
Household registration book.
Marriage certificate or document certifying marital status.
Power of attorney (if someone else is authorized to transfer the land).

Preparing the dossier when going to the notary public for real estate transaction procedures

For the Buyer:

Personal identification documents: valid ID card/citizen identification card/passport.
Household registration book.
Marriage certificate or document certifying marital status.

One of the two parties should prepare:

Request for notarization, usually prepared by the buyer according to the template of the notary practice organization, unless otherwise agreed. According to regulations, the party requesting notarization is responsible for paying the notarization fee, unless otherwise agreed by the parties.
In addition to the above documents, the parties may draft the contract themselves. However, typically, the contract is prepared by the notary organization.

Step 2 Notarize the Land Transfer Contract at a Notary Organization.

Reference:

What to Consider when Buying Real Estate without a Red Book?

Before signing a land purchase contract, the buyer should thoroughly research the land and the seller

If you choose to purchase real estate without a Red Book, the following considerations should be kept in mind:

A deposit contract should be made, clearly stating the commitments and compensation in case the seller fails to fulfill their commitments. It is advisable to have a power of attorney for management and disposition to prevent the seller from failing to fulfill their commitments.
Thoroughly research the land to ensure there are no disputes or planning issues.
Request the seller to provide the original land documents.
The sales documents and land transfer contract should include the witness’s signature and the seller’s fingerprint of the right index finger.

What is the Difference between Land Plots and Residential Land?

Characteristic	Land Plot	Residential Land
Definition	Land plots are part of the investor’s planning and have not been constructed. Land plots are often used for residential areas, eco-tourism areas, or buildings.	Residential land belongs to the group of non-agricultural land, including rural and urban residential land. It is used for building houses and works to serve life.
Legal Entity	Enterprise/ Investor	Individual
Time to Issue the Sub-Book after Plot Subdivision	1 – 2 years	2 – 6 months
Possibility of Further Subdivision	Land plots that have been planned in detail at a scale of 1/500 cannot be further subdivided.	Depends on the minimum area of the land plot
Infrastructure	Land plots have a synchronous infrastructure system, including roads, bridges, etc. For land plots used for residential areas, security and fire protection are given special attention.	The infrastructure, transportation system, utilities, and security depend on the location of the land.

Notes on Real Estate Transactions involving Land Plots and Residential Land:

When buying residential land, it is essential to research the land thoroughly to avoid disputes or planning issues.
When buying land plots, it is crucial to verify the project’s legal status and ensure transparent contracts and documents.

Reference:

Frequently asked questions

A real estate transaction is the process of buying, selling, or renting a property. It’s important to understand the process to ensure a smooth and successful transaction, and to avoid common pitfalls and mistakes.

The key steps in a real estate transaction include finding a property, doing due diligence, negotiating the price, securing financing, conducting a final walk-through, and closing the deal. Each step has its own set of tasks and requirements that buyers and sellers must be aware of.

Finding a reputable real estate agent is crucial. You can start by getting referrals from friends and family, and then interviewing multiple agents to find one who is experienced, knowledgeable, and has your best interests at heart. It’s also important to check their credentials and ensure they are licensed and in good standing with the relevant regulatory bodies.

Common mistakes include not doing enough research on the property and the surrounding area, not getting a home inspection, underestimating the costs involved, and not having a clear idea of their budget and financial capabilities. It’s important to take your time, do your due diligence, and seek professional advice to avoid these mistakes.

To ensure you are getting a fair price, it’s important to do your research and compare similar properties in the area. You can also get a professional appraisal, and negotiate the price based on the property’s condition and any necessary repairs or improvements.

The closing process involves finalizing the sale and transferring ownership of the property. It typically includes signing legal documents, paying closing costs and property taxes, and receiving the keys to the new home. The timeline can vary depending on various factors, but it usually takes a few weeks to a few months.

Yes, there are several common real estate scams to watch out for, including rental scams, fake listings, and title fraud. It’s important to be vigilant, do your research, and work with reputable professionals to avoid becoming a victim of these scams.

To prepare your home for sale, focus on enhancing its curb appeal and making any necessary repairs or improvements. You can also stage your home to make it more inviting to potential buyers. Working with a real estate agent can provide valuable insights and guidance on preparing your home effectively.

Successful price negotiation involves being well-informed about the property and the market, knowing your budget and sticking to it, being willing to walk away if the seller is unwilling to budge, and considering offering incentives to make the deal more attractive.

A final walk-through is conducted just before closing to ensure that the property is in the expected condition and that any agreed-upon repairs have been completed. It’s important as it gives buyers a chance to identify any last-minute issues and ensure that the property is as expected before finalizing the transaction.