NEW PROVISIONS ON REGISTRATION OF SECURITY INTERESTS IN INVESTMENT PROJECTS AND ASSETS TO BE FORMED IN THE FUTURE

On November 30, 2022, the Government issued Decree 99/2022/ND-CP ("Decree 99") on registration of security interests, replacing Decree 102/2017/ND-CP regulating the same issues. Decree 99 set out various new contents (which were previously updated here by ATA Legal Services), in which, prominenence is contents related to registration of security interests in investment projects and assets to be formed in the future in order to comply with the 2014 Law on Housing and related legal documents. Specifically:

Supplementation of cases of registration of security interests in land and land-attached asset use rights  

Regarding cases of compulsory registration: Decree 99 supplemented cases of “mortgage of residential construction project, non-residential construction project, agricultural investment project, forests development project and others that use land simultaneously with land use rights allocated with land use levy or leased with full one-off rental payment for the entire lease period by the State”.

Decree 99 provided registration cases of mortgage of investment project assets, including: (i) mortgage of assets attached to land under an investment project excluding land use rights; (ii) mortgage of assets attached to land under an investment project where the investor is not simultaneously the land user; or (ii) mortgage of assets attached to land under an investment project executed on land leased with annual rental payment. Accordingly, these cases shall comply with the regulations on registration of land-attached assets in this Decree.

Regarding cases of registration upon request: Decree 99 supplemented the following cases:

1. Mortgage of non-residential existing land-attached assets that are not subject to registration as per the law and have yet been registered upon request, except for land-attached assets as annual crops as per regulations;
2. Changing the registration of mortgage of property rights arising from a house purchase contract or a purchase contract of other land-attached assets to registration of mortgage of houses, and/or other land-attached assets;

Clarification of mortgage registration case of assets to be formed in the future

Decree 99 supplemented regulations on mortgage cases of houses to be formed in the future and other land-attached assets to be formed in the future, including:

1. Houses, construction works under investment projects for construction of houses and separate houses according to the Law on Housing; non-residential construction works, according to the law on construction, real estate business and other relevant laws, that are under the constructionprocess and have yet been accepted and put into use;
2. Production forests that are planted forests with unformed perennial trees that have yet been formed or have been formed but their ownership is given to the mortgagor after the commence of the mortgage contract.

In relevance to these regulations as well as regulations on registration of mortgage of investment projects, Decree 99 clarified: In case organizations and individuals register for mortgage of houses and other land-attached assets to be formed in the futures under their ownership but priorly belonged to an investment project that has been mortgaged and registered for mortgage by the investor, organizations or individuals must release the mortgage for such property and execute procedures for registration of change to withdraw the mortgaged assets as per the laws.