Transactions related to the sale of future assets are becoming increasingly complex, and contain many legal risks, while the regulations governing this area still have many gaps or overlapping provisions. In this article, we will assess and analyze some legal risks associated with contracts for the sale of future assets to provide customers with insights into the risks associated with entering into these contracts.
I. First, the legal regulations are not detailed and specific
The 2015 Civil Law only defines the concept of future assets but does not provide regulations for the activities of contracting the sale of this type of asset. Similarly, in specialized legal regulations, the legal framework has not kept up with the emergence and development of recently appeared types of future assets, such as some types of real estate, including office-tel, condotel, resort villas, shophouses, hometels, and more.
II. Second, the legal regulations are still flawed, limited, and not uniform
When the 2015 Civil Law did not have specific guiding regulations, the process of contracting and implementing contracts for the sale of future assets will be mainly governed by specialized legal regulations. However, even within these regulations, there are still conflicting provisions that affect the effectiveness of applying the law in practice and pose significant risks to the rights of the parties to the contract.
For example, the 2013 Land Law, together with the 2014 Housing Law and 2014 Real Estate Business Law, did not have uniform provisions on the right of foreign individuals to use land in Vietnam, which made it impossible to grant a certificate of ownership of the house to foreigners when implementing a contract to purchase a future house, even though they had received the handover and use of the house.
Or, legal regulations have not been standardized on whether notarization is mandatory or upon request for general real estate transfer contracts and future assets transfer contracts between real estate business organizations and individuals or other organizations.
Or as the law has not yet unified regulations on whether notarization is mandatory or notarization upon request for transfer of real estate contracts in general and real estate formed in the future in particular between real estate businesses and individuals or other organizations. The notarization depends on the needs of the parties. In addition, the housing law allows enterprises, and cooperatives with the function of real estate business to trade and purchase commercial housing formed in the future without notarization, or authentication, resulting in the recipient of the transfer being unable to inquire, verify whether the housing has been previously traded and likely to have disputes with a third party. At the same time, due to inadequacies in the regulations on the notarization of contracts for future real estate sales, there is no mechanism to monitor investors who perform their real estate transaction responsibilities according to legal regulations.
III. Third, the risk of major contract violations
Although specialized laws have provisions on certain conditions for the signing of future property sale contracts, the regulations are scattered across different documents, so the buyer will encounter difficulties in understanding their rights and obligations according to the law. Some violations from the seller’s side pose great risks to the buyer, such as: violating the obligation to hand over and transfer ownership of assets to the buyer; arbitrarily pressuring the price, increasing the sale price of assets; delivering assets with incorrect quality or description in the contract; failing to carry out procedures for registering ownership/use rights for the buyer, etc.
Inadequate and conflicting legal provisions also lead to covert transactions, especially for real estate assets formed in the future. Many real estate businesses deliberately circumvent the law to illegally mobilize the sale of commercial housing formed in the future when they do not have enough conditions to open for sale. Fake transactions between investors and customers pose great risks to both parties, especially customers.
To limit the risks arising in the process of buying and selling future assets, customers need to study and research carefully the legal status and formation of the property; as well as equip themselves with legal knowledge and advice when entering into and performing sale contracts; and create a safe trading environment.
Above is the article “Legal risks in contracts for the sale of future asset”. We hope this article was useful to you.