HOW TO CHECK THE LEGAL STATUS OF REAL ESTATE BEFORE MAKING TRANSACTION
Considering factors related to real estate is one of the most essential issues when conducting a transaction. Buyers often tend to care about external factors such as price, area, location and “forget” to check real estate’s legal status. This action will inadvertently expose the buyer to the purchase of land that is in dispute, under planning, or has been mortgaged to borrow money. To minimize risks, in this article, TNTP will give the notes that buyers need to make to check the legal status of real estate before deciding to trade.
1. Check the original Certificate of land use rights, ownership of houses, and other properties attached to the land ( if any).
A certificate of land use right (“LURC”) is a very important document because its existence not only contributes to increasing real estate value but also helps buyers feel more secure when transacting. However, if the seller only has the LURC, it is not enough basis to prove the legal status of the property because the tricks of forging documents are very sophisticated, so before making a purchase and sale transaction, real estate, buyers should ask notaries to check these types of papers.
In addition, to minimize the possibility of buying mortgaged real estate in a bank or elsewhere, the buyer must not make a deposit when the seller only has a certified copy of LURC.
2. Find out real estate information subject to local land planning
The issue of land planning in each locality is different and may change over time. However, not all cases has the planning information has been made public so buyers can easily look up. Therefore, buyers can refer to the methods below to find out information about land:
Firstly, check the planning based on the LURC or LURC and the assets attached to the land. For land that already has a LURC, usually, planning information, including what planning area this land belongs to will be recorded directly in the notes of the LURC ;
Secondly, check on the official web portal of the District People’s Committee;
Thirdly, learn about land use planning at the competent state agency, namely the local land registration office (or the district-level Department of Natural Resources and Environment).
3. Check if the real estate is in dispute or not
Pursuant to the provisions of the law, specifically in Clause 1, Article 188 of the 2013 Land Law, land users can only exercise the rights to convert, transfer, and lease land, sub-lease, inherit, donate, mortgage land use rights, contribute capital with land use rights when meeting all four statutory conditions. One of the four conditions mentioned is that the land is undisputed i.e., if the land is in dispute, then the land user will not be able to exercise the aforementioned rights.
Buyers can check whether the land is in dispute or not in the following ways:
– 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 see if anyone is submitting a dispute resolution application or dispute actual ground (disputed but not yet submitted);
-Apply for land information at the Office/Branch Land registration office where the land parcel is located based on the form specified in Articles 11 and 12 of Circular 34/2014/TT-BTNMT providing documents and procedures applying for land information;
-Visiting the surrounding people or adjacent land users;
-Contact the civil enforcement agency to find out if the parcel is relevant to the enforcement of a land dispute settlement judgment.
4. Check the status of loans and mortgages of real estate
The owner will not be able to sell the mortgaged property to another person during the mortgage period. However, in the event the mortgagee agrees, the owner can still exercise the right to assign the security property as the right using land.
For cases where it is necessary to check whether the land is mortgaged or not, the buyer can perform the following tasks:
Firstly, check the information on the For real estate mortgaged by a lawful bank, the mortgagee keeps the original with the seal of the competent authority with the words: “Land use right mortgaged to the bank… under contract number…” on Page number three or number four of the Certificate. So, if the seller intends to hide it, they will only give a photocopy or remove the paper containing that information. However, if the paper has a half-mark or a staple in the corner, it can prove that the property is being mortgaged;
Secondly, check the information at the Land Registry Office or a Branch of the Land Registry Office. However, it should be noted that this method is only effective when the seller mortgages the house to the bank and cannot be applied if the seller mortgages the house for hot loans to individuals or organizations;
Thirdly, find out information at the notary office, the buyer brings a copy of the LURC that the seller has asked the seller to provide to the notary office to look up information on whether the house or land is in the dispute or mortgaged by the bank.
Above are legal analyzes and some guidelines for checking the legal status of real estate. Through this article, TNTP hopes it can help customers minimize risks and make the right decisions when making transactions related to real estate.
Best regards.
TNTP and Associates International Law Firm
