1. What is a mortgage?

Article 317 of the 2015 Civil Code stipulates that mortgage of property is the use of property owned by one party (hereinafter referred to as the mortgagor) to ensure the performance of obligations and not hand over the property to the other party. (hereinafter referred to as the mortgagee).

- The mortgaged property is held by the mortgagor. The parties can agree to let a third person keep the mortgaged property.

2. Can mortgaged real estate be transferred?

According to Article 188 of the 2013 Land Law, the conditions for transfer, donation, and inheritance are as follows:

- Land users can exercise the rights to convert, transfer, lease, sublease, inherit, donate, and mortgage land use rights; Contribute capital using land use rights when the following conditions are met:

+ Have a Certificate, except for the case specified in Clause 3, Article 186 and the case of inheritance specified in Clause 1, Article 168 of the 2013 Land Law;

+ Land is not in dispute;

+ Land use rights are not distrained to ensure judgment enforcement;

+ During the land use term.

However, according to Clause 8, Article 320 and Clause 5, Article 321 of the 2015 Civil Code, the mortgagor is not allowed to sell, exchange, or donate the mortgaged property as follows:

- To sell, replace, or exchange mortgaged assets, if those assets are goods circulating in the production and business process. In this case, the right to request the buyer to pay money, proceeds, assets formed from proceeds, assets replaced or exchanged become collateral.

In case the mortgaged property is a warehouse, the mortgagor has the right to replace the goods in the warehouse, but must ensure that the value of the goods in the warehouse is as agreed.

- To sell, exchange or donate mortgaged assets that are not goods circulated in the production and business process, if agreed by the mortgagee or according to the provisions of law.

Thus, the mortgaged property can still be transferred, but must be approved by the mortgagee.

3. What are the procedures for transferring names when real estate is mortgaged?

Step 1:Notarize and authenticate the transfer contract

Pursuant to Point a, Clause 3, Article 167 of the 2013 Land Law stipulates:

Contracts for transfer, donation, mortgage, capital contribution with land use rights, land use rights and assets attached to land must be notarized or authenticated, except for real estate business cases specified at point 1. b this clause.

Thus, land use rights transfer contracts must be notarized and authenticated.

Pursuant to Articles 40 and 41 of the Notary Law 2014, the parties need to prepare the notarization request dossier with the following documents:

Step 2: Declare taxes and fees

- If the transferor pays personal income tax himself, he must submit a tax declaration within 10 days from the effective date of the transfer or donation contract.

- If the transferee pays personal income tax and in case of receiving a gift, submit the personal income tax declaration and registration fee no later than the time of submitting the change registration application.

- If you are exempt from personal income tax or registration fee, you still have to declare and submit personal income tax and registration fee declaration documents for the State to manage.

Step 3: Submit change registration application

Prepare change registration documents, including:

- Land change registration application according to form No. 09/DK

- Transfer or donation contracts are notarized or authenticated according to regulations.

- Original Certificate (Red Book, Pink Book).

- Personal income tax declaration form.

- Original registration fee declaration according to Form No. 01.

- Documents used to determine eligibility for exemption from personal income tax and registration fees (if any).

- Documents agreeing to transfer or gift from the mortgagee.