On June 27, 2024, the National Assembly promulgated the Law amending and supplementing several articles of the Law on Property Auction No. 01/2016/QH14, which had previously been amended and supplemented by Law No. 16/2023/QH15 (hereinafter referred to as the “Law on Property Auction 2024”). The amendments and supplements in the Law on Property Auction aim to address difficulties in identifying auctioned assets, auction procedures, application of information technology, and digital transformation in property auction activities to gradually create consistency and appropriateness in auction activities in the current period.
The Law on Property Auction 2024 amends and supplements 43 articles, adds 2 new articles, abolishes 2 articles and several points and clauses of the old law, including notable changes as follows:
1. Amendments and supplements to the types of assets required to be sold through auctions.
The Law on Property Auction 2024 amends Article 2.1, updating and supplementing the types of assets required to be sold through auctions, including entirely new subjects:
a, Adding auction assets such as the right to use telecommunications codes, numbers, and Vietnam’s national domain name “.vn”.
b, Expanding the scope of auctionable assets for forests: the right to use forests, forest leasing (previous regulation: the right to use and own production forests as planted forests).
In addition, the amended law removes two types of assets from the auction list: “Assets being exhibits or means of administrative violations confiscated for public funds” and “the right to collect fees for using road infrastructure assets”.
2. Adding prohibited acts in auction activities.
Article 9.1 of the Law on Property Auction 2024 adds several prohibited acts in auctions, including:
a, Creating false lists of registered auction participants; creating fake dossiers, and false dossiers participating in auction activities; colluding and connecting with auction asset owners, auction participants, valuation organizations, auction asset appraisal organizations, and other individuals or organizations to distort auction asset information, invitation dossiers to participate in auctions, auction participation dossiers, price suppression, price increase, and falsifying auction results.
b, Disclosing information about registered auction participants.
c, Forging dossiers or intentionally providing false information in dossiers participating in the selection of auction organizations.
d, Using deposit money of auction participants for any other purpose.
e, Receiving any money, property, or benefit from auctioneers, auction organizations, or auction participants to distort the results of selecting auction organizations or auction results.
3. Supplementing auction procedures and processes.
a, Adding provisions for online auctions:
Online auctions are conducted through the National Property Auction Portal or an online auction information page. The costs of using the National Property Auction Portal and renting an online auction information page for organizing online auctions are included in the auction asset costs.
The results of online auctions are publicly posted on the National Property Auction Portal or the online auction information page and sent to the email addresses of auction participants.
b, Adding provisions to clarify the deposit value of auction participants:
The deposit value depends on the type of auctioned asset, specifically:
- The deposit amount is agreed upon by the auction organization and the auction asset owner but must be at least 5% and not exceed 20% of the starting price of the auctioned asset, except in certain cases:
- For mineral exploitation rights where the starting price is not determined in money, the deposit is determined by the mineral law.
- For mineral exploitation rights where the starting price is determined in money, the deposit is at least 10% and not more than 20% of the starting price.
- For land use rights in land allocation or lease for investment projects, the deposit is at least 10% and not more than 20% of the starting price.
- For leasing assets where the starting price is determined by the annual rental price, the deposit is at least 5% and not more than 20% of the starting price multiplied by the lease term.
- For frequency band use rights, the deposit is determined as follows:
- For price bidding in auctions, the deposit is at least 5% and not more than 20% of the starting price of the frequency band auction.
- For auctions with two stages (determining the number of frequency bands won and determining the position of the frequency bands won), the deposit is at least 5% and not more than 20% of the starting price of one frequency band multiplied by the number of frequency bands registered.
- For price bidding based on the number of frequency bands registered, the deposit is at least 5% and not more than 20% of the starting price of the highest starting price frequency band among those being auctioned multiplied by the number of frequency bands registered.
c, Clearly defining the auction location:
Under the old law, the location of the auction was agreed upon by the auction asset owner and the auction organization. The Law on Property Auction 2024 clearly defines the locations that can be used for holding auctions as follows:
- For movable assets: the auction location must be within the province or centrally-run city where the auction organization's headquarters, the auction asset owner's headquarters, or where the auction asset is located.
- For immovable assets, the auction location is determined as follows:
- Within the province or centrally-run city where the auction asset is located.
- If the immovable assets are in different provinces or centrally-run cities, the auction asset owner and the auction organization can choose a location in one of these provinces or cities, the auction asset owner's headquarters, or the auction organization's headquarters.
The Law on Property Auction 2024 also anticipates cases where the auction location does not meet the conditions. In such cases, the auction asset owner and the auction organization can agree in writing to change the location within the previously announced locality and must notify auction participants in writing at least one day before the auction date.
d, Amending provisions on unsuccessful auctions:
- The Law on Property Auction 2024 stipulates an additional case where an auction is considered unsuccessful if all registered and eligible auction participants do not participate in the auction.
- Moreover, the Law on Property Auction 2024 further details that an auction is deemed unsuccessful if, by the end of the registration period, multiple people have registered but only one person attends the auction, or only one person places a bid, or multiple people place bids but only one bid is valid.
4. All disputes arising related to auctions will be resolved through summary procedures
The Law on Property Auction 2024 introduces an important principle for resolving disputes concerning the ownership of auctioned assets, legal challenges to the validity of successful auctions, and the annulment of auction results. Accordingly, all disputes will be handled through the summary procedures stipulated by civil procedure law.
The Law on Property Auction 2024 focuses on amending and supplementing urgent issues to resolve difficulties and obstacles in the auction process and procedures. It aims to enhance the strictness, objectivity, transparency, and integration of information technology and digital transformation in auction activities, thereby creating a consistent and unified legal framework for auctions in the current period.
The Law on Property Auction 2024 takes effect on January 1, 2025. Contracts for auction services signed before the Law on Property Auction 2024 takes effect will still be governed by the current law.
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