Before making a decision to buy real estate, buyers have to consider many factors such as money, area, and location of real estate,… However, many people forget an extremely important matter which is to check the legal status of real estate. The legal check of real estate will help buyers avoid buying disputed land, under planning, or have been mortgaged to borrow money. In this article, TNTP will instruct ways to help buyers check the legal status of real estate before deciding to trade.
1. Buyers need to check the original certificates of land use rights, ownership of houses, and other assets attached to the land (if any).
When buying and selling real estate, certificates of land use rights (“CLUR”) will help the house and land have a higher price, giving buyers peace of mind when transacting. However, the seller has CLUR which is not enough to prove the safe legal status of the property because the method of forging documents is very sophisticated and requires professional expertise and equipment to detect it. Therefore, the buyer should ask the notary to check.
Note that the buyer never accepts a deposit when he only sees a notarized copy of the original of the CLUR. Most likely that real estate is being mortgaged at a bank or somewhere else so the seller does not keep the original CLUR.
2. The buyers find out whether the land is in the planning area or not?
The land planning in each locality is not the same and can also change over time, in addition, this plan may be public or not, so the buyer can find out by different methods as follow:
- Check the planning based on the CLUR. In case the land already has a CLUR, usually planning information will still be recorded directly on the CLUR. Information about the planning will be in the notes section, which also indicates what planning this lot is in.
- Check on the official website of the district People’s Committee.
- Learn about land planning at competent state agencies. The local competent state agency that grasps information about land use plans and master plans is the local Land Registration Office (or district-level Department of Natural Resources and Environment).
3. Check real estate information about the dispute
According to Clause 1, Article 188 of the 2013 Land Law, land users are allowed to exercise the rights to exchange, transfer, lease, sublease, inherit, donate, mortgage land use rights, and contribute capital by land use rights when all 4 conditions are met, in which the second condition is that the land is not disputed. This means that if the land is in dispute, the land user will not be entitled to the mentioned rights above.
To check whether the land is in the dispute or not, the buyer can use the following methods:
- Contact the People’s Committee of the commune, ward, or township where the land is located or directly contact the cadastral official of the commune, ward, or township where the land is located to ask if anyone is submitting a dispute settlement application or actual land dispute (disputed but not yet submitted).
- Ask for land information at the Office/Branch of the land registration office where the land plot is located. (The application form prescribed in Articles 11 and 12 of Circular 34/2014/TT-BTNMT stipulates documents and procedures for applying for land information).
- Ask the people who live around or the adjacent land user.
- Contact the civil enforcement agency to find out if the parcel of land is involved in the enforcement of a land dispute settlement judgment.
4. Check the information on real estate that has a loan, mortgage, or not
In principle, when the owner mortgages his property, it will not be sold to others during the mortgage period. However, in case the mortgagee agrees, the owner will be able to exercise the right to transfer (the collateral is the land use right).
For cases where it is necessary to check to see if the land is being mortgaged, it can be checked:
- Checking the information on the CLUR, for real estate mortgaged by a lawful bank, the mortgagee keeps the original with the seal of the competent authority and the words: “Land use right mortgaged to the bank… under contract number…” face number three or number four of the Certificate. If the seller wants to hide the information, they will give a photo or remove the sheet. However, if the paper has a half-mark or a staple in the corners, the property may be mortgaged.
- Check the information at the Land Registry Office or a Branch of the Land Registry Office. However, this method is only effective when the seller mortgages the house to the bank. If the mortgage is for individuals or organizations with hot loans and high-interest rates, you will not be able to check the information.
- Find out information at the notary office: With this method, the buyer must ask the seller to provide a copy of the CLUR. After that, the buyer brings this copy to the notary office to look up information on whether the house or land is mortgaged to the bank or not.
Above are the legal analysis of TNTP and the instructions for legal examination of real estate. Based on the above notes and their needs, buyers can consider making the right decision before the transaction. Hope this article was useful to you.
TNTP and Associates International Law Firm
6th floor, 200 Nguyen Luong Bang Street, Quang Trung Ward, Dong Da District, Hanoi