Signing Deposit Contract in Sales and Purchase of Property – Advice from Conveyance Lawyers in Vietnam

Investing in real estate in Vietnam attract much attention from individuals and organizations because the potential significant profits from the real estate transaction business it could bring. How conveyance lawyers in Vietnam could help and make the transaction more secured? 

High profits often come with high risks

However, there is a motto which is never wrong: high profits often come with high risks that many investors would need to know.  Failure to understand the provisions of the law and legal issues related to real estate transactions have led to many cases of investors and buyers losing money, long term disputes resulting in losing precious time when selling a house or buying a house. One of the biggest risks leading to disputes for buyers and sellers is being careless when signing agreements and contracts, which could be mitigated with the help of dispute lawyers and conveyance lawyers in Vietnam.

Advice from conveyance lawyers in Vietnam: sign deposit  when buying or selling property

Before buying and selling a house, a deposit is a guarantee to protect the sellers and the buyers that the sales and purchase transaction of property will be executed as negotiated.  

At that time, the seller and the buyer will sign a deposit contract to ensure that the official real estate purchase and sale contract will be implemented reliably in the future. With this form, the buyer (deposit party) must deposit to the seller (deposit recipient) an amount of money to ensure that the seller will not sell the property to another third party, and at the end of the deposit period the parties will sign a real estate purchase and sale contract.

Matters to concern when sining the contract that need the help from conveyance lawyers in Vietnam

To maximize the protection of the interests of buyers and limit risks when making a deposit transaction with the seller, it is necessary to note the following issues:

Firstly, it is necessary to determine who is the owner of real estate, whether it is an individual or a co-owner. The owner of real estate must be a person with full civil act capacity when conducting transactions to ensure that the person signing the deposit contract has full authority, avoiding the case that the contract is void.

Secondly, the buyer must check the legal paper of the land to make sure that it is eligible for transfer under the law. These conditions include: (i) having the certificate of land use right; (ii) the land is dispute-free; (iii) the land use rights are not distrained to secure judgment enforcement; (iv) being within the land use term. In particular, the buyer should request the seller to provide the original or a certified true copy of the certificate of land use rights, ownership of houses, and other assets attached to the land and some relevant information confirmed by a competent state agency to check and ensure that the land is fully eligible for the transfer of land use rights. In fact, although the buyer has been provided with the above documents to check, there is still a risk for the buyer, when the seller knowingly provides fake documents, commits fraud in order to appropriate the buyer’s property. These are cases with criminal signs and are often systematic, fraudulent organizations to appropriate huge property values of many people. Through checking the legal documents of the land from which, the buyer can consider and decide the deposit amount to match the level of risk that the buyer can bear when information on the land has not been verified by the competent authority. Of course, this amount is negotiable with the seller and both parties have to reach an agreement on the amount.

Thirdly, the parties also need to pay attention to a number of matters specified in the deposit contract. Rights and obligations of the parties, terms of deposit penalty, agreement of the parties on the responsibility to pay fees, and the amount to be paid when notarizing the sales and purchase contract. When the parties sign this contract (in the strict legal term, it is a contract for the transfer of land use rights, ownership of houses, and other assets attached to the land), they will have to bear fees prescribed by law, including notarization fee, registration fee, personal income tax, other state fees incurred in the process of transferring the name of the certificate of land use right, ownership own houses and other assets attached to the land.

Therefore, in the deposit contract, depending on the agreement, the parties should specify which party will be responsible for paying these fees. In case the parties agree that the deposit contract must be notarized, a fee notarization of this contract will be incurred. This fee is specified in the notarization fee schedule of each notary office, based on the value of the deposit contract. Another note in the deposit contract is that the deposit term within a period suitable to the actual situation, ensuring that when the deposit period expires, the parties will sign a contract for the sale and purchase of the house.

Fourthly, in terms of form, the deposit contract is made in writing according to the agreement of the parties. The prevailing law does not require notarization and authentication of deposit contract when buying or selling house in Vietnam.  However, if the house has a high value, to ensure legality as well as avoid disputes and risks at a later stage, the parties could consider to notarize the deposit contract at the notary office where the land is located according to regulations of the law.

For particular details, the buyers and seller can seek legal advice from experts and conveyance lawyers in Vietnam to ensure efficiency when signing documents related transactions to property.

About ANT Lawyers, a Law Firm in Vietnam

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers has lawyers in Ho Chi Minh city, Hanoi,  and Danang, and will help customers in doing business in Vietnam.