The Ho Chi Minh City People’s Committee has proposed the Prime Minister to assign the Ministry of Justice and the State Bank of Vietnam to work with related agencies and find a solution for customers of land and housing projects, which investors have mortgaged ‘red books’ or land use right certificates to banks.
Thousands of people have purchased land lots from projects, built houses and lived there for many years but the properties are still in names of investors, who have mortgaged red books to the bank for capital to implement the projects.
Recently, tens of households in Le Minh residential area in Tan Thoi Nhat ward, District 12 has suddenly seen tens of people who are representatives from banks, courts and law enforcement bodies come to work with them about a compulsory sale of their properties.
Ms. Nguyen Thi Nga said that she purchased a parcel of land from Le Minh Company under a financial contribution contract, in which the company hands over land to customers to build houses and will do procedures for them to get land use right certificates after house construction is completed.
Although Ms. Nga has built her house for many years, the land use right certificate is still in the company's name.
The company has failed to keep its words to do construction completion procedures and make a land sale contract, and moved its headquarters to unclear places, she added. It has been impossible to contact the company’s leaders by phone too.
According to documents collected by Sai Gon Giai Phong, Le Minh Company has authorized some individuals to mortgage tens of land lots of the above project to a branch of the Bank for Agriculture and Rural Development in HCMC.
Of these, some credit contracts have been outstanding but the borrowers have failed to pay up the loans and interest. Therefore, the bank has filed a lawsuit at the People’s Court of District 12, where the jury has pronounced compulsory sale of the mortgaged properties.
Similarly at many other projects, customers have fulfilled their obligations to investors and received properties like apartments, houses or land lots but can not take their property ownership right certificates, which investors have mortgaged to banks.
In a report the Prime Minister, the HCMC People’s Committee said that both investors and banks must take responsibilities for that.
Right after singing contracts with customers, the investors must take the initiative to contact banks and do necessary formalities to withdraw collaterals. The banks must be responsible for supervising the investors and prompting them to abide by regulations.
Customers have been at a disadvantage for signing financial contribution or investment contracts to receive land lots and apartments. These transactions have not been legally recognized.
HCMC authorities have organized a lot of meetings to solve this issue without results.
Representative of the State Bank in HCMC said that it must be considered specifically for each project and each investor. If investors have other properties to guarantee loan payment, they might be discharged from the obligatory sale of collaterals.
If the investors have a single project which has been mortgaged, foreclose will be unavoidable unless bank officials who have approved loans will face criminal charge for irrevocable debts, it added.
Mr. Pham Ngoc Lien, director of the Land Use Right Registration Office in HCMC, said that the Civil Law does not recognize the sale or mortgage of collaterals.
Therefore, it is necessary to make clear if investors mortgage the land lots first or sell to customers first to tackle the issue. If they mortgage after selling the property, the case must be transferred to authorized agencies to consider whether the investors have defrauded customers or abused their position to appropriate the property or not.
Experts said that it necessary to solve the triangle relation between banks, investors and residents and local authorities could not help being involved in this case because they had licensed the projects.
Those investors breaching regulations must face heavy sanctions, they said.
