New regulations on registration of security measure

27
Oct
2017

On 1 September 2017, the Government of Vietnam issued new regulations on the registration and provision of information on asset based security measures (“registration of security measures”) known as Decree No. 102/2017/ND-CP (“Decree No. 102”).  Decree No. 102 came into effect on 15 October 2017.

The objective of Decree No. 102 is to provide more clarity on the administrative procedures connected with the registration of security measures and to ultimately simplify the registration process for applicants.

Applicants will be happy to note that because Decree No. 102 standardises the process of registration of security measures, the Vietnamese security registration authorities may no longer request additional documentation other than those required by law.

The following security measures are subject to compulsory registration:

  • mortgage of land use rights;
  • mortgage of property on land whose ownership has been stated in the certificate of right to use land, ownership of land and property attached to land (“LURC”);
  • pledges or mortgages of aircrafts; and
  • mortgage of seagoing ships.

Other security transactions may be registered as requested by the relevant parties.

Below are some of the key highlights of Decree No. 102:

  1. Validity of registration

Security measures subject to compulsory registration under Decree No. 102 shall become valid at the time when the Registry enters the details of the registration into the register.

Conversely, where registration of security measures is optional, the registration becomes valid as soon as the details are entered into the database.

  1. Modifications to registered secured measures

Applicants shall lodge an application for modification of registered secured measures in the following cases:

  • Where there is a withdrawal, addition, substitution or renaming of the grantor or secured party as agreed or due to enterprise restructuring;
  • Where there is a withdrawal of collateral;
  • Where there is an addition of collateral without entering into a new security contract;
  • Where the collateral is an off-plan property which has already been formed;
  • Where there is a request for correction of nonconformity in declared contents of the application form for registration; or
  • Where there is an additional secured obligation that was not previously specified in the initial security agreement for mortgages and pledges of property secured for obligations arising in the future.

Note that where the collateral is an off-the plan property on land (including off-the-plan housing) which has already formed, the procedures for modification shall be initiated concurrently with those for certifying property ownership to the land use right certificate.

  1. Validity of modified registration

There shall be no change to the effective time of registration of a property mortgage arising out of a contract for sale and purchase of a residential house for the following modifications:

  • the addition of any building that may be built on such mortgaged property in the future; or
  • the addition of any completed building situated on the mortgaged property.
  1. Methods of registering a security measure

Security measures may be registered by any one of the following methods:

  • via the online registration system;
  • directly (in person);
  • by post;
  • by email in cases where the applicant has been granted a user code to the security measure database.

If you have any questions or require any additional information, please contact Trang Hoang or the ZICO Law Partner you usually deal with.


This alert is for general information only and is not a substitute for legal advice.