Decision No. 216/2005/QĐ-TTg on Issuing the Auction Regulations for Land Use Rights to Allocate State-owned Land with Payment of Land Use Fee or Lease of Land

DECISION OF THE PRIME MINISTER

Regarding the issuance of the Auction Rules for Land Use Rights

to transfer land with payment of land use fee or lease land

PRIME MINISTER

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Based on the Land Law dated November 26, 2003;

WHEREAS, Decree No. 181/2004/NĐ-CP dated October 29, 2004 of the Government on the implementation of the Land Law;

At the proposal of the Minister of Finance,

DECISION:

Article 1. The Auction Rules for Land Use Rights to Transfer Land with Payment of Land Use Fee or Lease Land are hereby promulgated along with this Decision.

Article 2. This Decision takes effect fifteen days after its publication in the Official Gazette. All previous regulations that conflict with this Decision are hereby abolished.

Article 3. Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of People's Committees of provinces and centrally governed cities are responsible for implementing this Decision./.

REGULATIONS

AUCTION RULES FOR LAND USE RIGHTS TO TRANSFER LAND

WITH PAYMENT OF LAND USE FEE OR LEASE LAND

(Issued together with Decision No. 216/2005/QĐ-TTg dated August 31, 2005 of the Prime Minister)

dated August 31, 2005 of the Prime Minister)

PART I
GENERAL PROVISIONS

Article 1. Scope of Application

These Rules apply to the auction of land use rights (hereinafter referred to as auction) to transfer land with payment of land use fee or lease land.

Article 2. Subjects eligible to participate in the auction

Economic organizations, households, individuals who are eligible for the State to transfer land with payment of land use fee or lease land according to the provisions of the Land Law and have the need to use land to implement investment projects or build houses in accordance with the planning approved by competent state authorities.

Article 3. Cases where the State transfers land or leases land through auction

1. Transfer of land with payment of land use fee

a) Building individual housing for households or individuals.

b) Building housing for sale or lease, except for cases involving construction of high-rise apartment buildings for industrial zone workers.

c) Building infrastructure for transfer or lease.

d) Using land funds to create capital for building infrastructure.

đ) Using land as a construction site for production and business facilities.

e) Using land for agricultural, forestry, aquaculture, or salt production purposes.

2. Transfer of land through other methods now converted to transfer of land with payment of land use fee or change of land use purpose; except in cases where the land user does not change.

3. Lease of land including leasing agricultural land for public welfare purposes of communes, wards, towns for agricultural, forestry, aquaculture, or salt production purposes.

4. Other cases decided by the People's Committee of provinces directly under the Central Government (hereinafter collectively referred to as the provincial People's Committee).

Article 4. Authority to decide on transferring land or leasing land through auction

The state agency authorized to transfer land or lease land according to the laws on land shall also have the authority to decide on transferring land or leasing land through auction for that type of land or project.

Article 5. Conditions for organizing auctions of land parcels

1. Detailed land use planning or detailed land use plan; detailed construction planning approved by the competent authority according to current laws on land and construction.

2. Compensation and clearance of the land surface completed.

3. An auction plan approved by the competent authority.

Article 6. Conditions for registration to participate in the auction

The subjects specified in Article 2 of these Rules may register to participate in the auction when they meet the following conditions:

1. Submitting an application form for participation in the auction issued by the Auction Council or the state organization responsible for auctioning land use rights, which includes a commitment to use the land for its intended purpose and in accordance with the planning if the auction is won.

2. Financial and technical conditions or financial capacity

a) For organizations, they must have sufficient financial and technical conditions to implement the project or investment plan according to the law.

b) For households and individuals, they must have sufficient financial capacity to implement the project or investment plan according to the law. In the case of auctioning land divided into lots for household or individual housing, households and individuals participating in the auction do not need to meet this condition.

3. Only one individual from a household can participate in the auction; only one unit from an organization can participate in the auction; if there are two or more enterprises under the same Group Corporation, only one enterprise can participate in the auction; a Group Corporation with affiliated companies, parent and subsidiary companies, or joint ventures with one party contributing capital in the joint venture can only have one enterprise participate in the auction.

PART II
PROCEDURES AND FORMALITIES FOR AUCTIONS

Article 7. Establishment of the Auction Council

1. The People's Committee at the level having the authority to grant land use rights or lease land shall have the authority to establish the Auction Council. In cases where necessary, the Provincial People's Committee may delegate the authority to establish the Auction Council to the District People's Committee for the purpose of auctioning land use rights or leasing land to organizations.

2. The provincial-level Auction Council must ensure representation from the Departments of Finance, Natural Resources and Environment, Planning and Investment, Construction, and other members as decided by the Provincial People's Committee to suit local conditions. If the head of the Provincial People's Committee does not assume the position of Chairman of the Auction Council, the Director of the Department of Finance shall be authorized to serve as Chairman.

The composition of the district-level Auction Council includes the head of the District People's Committee serving as Chairman of the Auction Council and representatives from functional departments of the district, similar to the composition of the provincial-level Auction Council.

Article 8. Announcement of the Auction

1. At least thirty days before conducting the auction, the Auction Council or the state organization with the function of auctioning land use rights shall publicly announce the land plot to be auctioned at least twice within two weeks through mass media such as local radio, television, newspapers, and other means of public communication, and also post it publicly at the location of the auction and the office of the District People's Committee where the land plot is located.

2. The content of the public announcement includes: location, area, dimensions, boundary markers of the land plot, current land use purpose, detailed land use planning, land use purpose according to planning, detailed construction planning, duration of land use; time and place of registration, time of conducting the auction, and other relevant information about the land plot. Based on requirements, characteristics, and scale of the land plot put up for auction, the Provincial People's Committee decides whether to publicly announce the starting price or not.

Article 9. Registration to Participate in the Auction

1. Subjects meeting the conditions stipulated in Article 6 of this Regulation shall complete registration and finalize the registration procedures within the time limit announced by the Auction Council or the state organization with the function of auctioning land use rights.

2. Organizations and individuals registering and submitting application documents to participate in the auction must pay the following amounts:

a) Deposit (guarantee deposit - advance payment) determined by the Provincial People's Committee for each auction but not exceeding 5% of the starting price of the land plot being auctioned. The successful bidder will have the deposit deducted from the land use fee or land lease fee payable.

The deposit can be refunded in the following cases:

- For unsuccessful bidders, the deposit will be returned immediately after the auction ends.

- For those who have registered to participate in the auction but withdraw their registration within the time limit specified in Clause 1 of this Article.

- For successful bidders who refuse to accept the land use right as stipulated in Point d, Clause 3, Article 11 of this Regulation.

The deposit cannot be refunded and must be fully paid into the State budget in the following cases:

- For those who have registered to participate in the auction but do not attend the auction.

- For participants in subsequent rounds of the auction whose bid in the next round is lower than the highest bid in the previous round.

- For successful bidders who refuse to accept the land use right or withdraw their bid.

- For those who violate the auction rules of that auction.

b) Auction fees: this fee is paid when registering to participate in the auction and is used to cover the costs of organizing and implementing the auction and is not refundable to organizations and individuals who have registered to participate and paid the auction fee. The specific amount of the fee is determined by the Provincial People's Assembly in accordance with the current laws on fees and charges applicable to local conditions.

Article 10. Starting price and bidding increment for auction

1. Starting price for auction

a) Principles for determining the starting price

The starting price for auction to transfer land with payment of land use fee or lease land shall be determined closely to the actual transfer price of land use rights and lease rights under normal conditions at the time of determining the starting price according to the new purpose of the plot being auctioned. The starting price must not be lower than the land price and lease price issued by the Provincial People's Committee in accordance with the Government's regulations.

b) Authority to decide the starting price for auction to transfer land with payment of land use fee or lease land is decided by the Provincial People's Committee or delegated to other authorities within its jurisdiction.

2. Bidding increment for auction is the difference between the highest bid of the previous round and the price announced by the Auction Council or state organization authorized to conduct land use right auctions for the next round. Based on local circumstances, the Provincial People's Committee shall stipulate the method of determining the bidding increment or may not need to specify it as appropriate.

Article 11. Organization of auction

1. The Auction Council implements the auction according to the plan approved by the competent People's Committee.

In areas where state organizations authorized to conduct land use right auctions have been established, based on the actual situation in the locality, the competent authority decides to entrust these organizations to carry out the auction. When conducting the auction, the organization must establish an Auction Council. Members participating in this Council include representatives from agencies, Departments, and sectors as prescribed in Clause 2 of Article 7 of this Regulation.

2. Procedures for opening the auction session

a) Introduce members of the Auction Council, the session chairperson, and assistants (if any).

b) Roll call of registered participants in the auction, announce those who meet the conditions to participate in the auction.

c) The session chairperson introduces the Auction Regulations.

d) Provide all relevant information about the plot being auctioned, answer questions from participants; distribute bidding forms (in case of secret ballot auction) to each participant; perform other necessary procedures.

3. Forms and procedures for auction

a) Secret ballot auction conducted directly in rounds until there are no more bids, the highest bidder wins.

In cases where the starting price is not publicly announced as stipulated in Clause 2 of Article 8 of this Regulation, the Council can only announce the starting price after the first round and the highest bid of that round; declare the next round, determine the number of participants continuing in the auction, announce the starting price for that round. The auction ends when the highest bid is determined and there are no more participants.

If all participants in the first round bid below the starting price, the Council declares the auction unsuccessful. The Council will review and adjust the starting price appropriately and organize another auction at a later date decided by the Chairman of the Auction Council.

b) Public auction by voice: in cases where the starting price is not publicly announced as stipulated in Clause 2 of Article 8 of this Regulation, the Council can only announce the starting price at the beginning of the auction session. Participants bid directly by voice until there are no more bids. The highest bidder wins.

c) The Auction Council or state organization authorized to conduct land use right auctions specifies the duration of each round for different auction forms.

d) If the winning bidder refuses to accept the land use rights or withdraws their bid, the Council may approve the next highest bidder as the supplementary winner if their bid is not lower than the final round's starting price. If the supplementary winner also refuses to accept the land use rights, the Council issues a document cancelling the auction result and will consider organizing another auction at a later date.

4. For auctions of plots divided into smaller lots for individual housing, the Provincial People's Committee stipulates the form, procedures, and sequence of the auction suitable to local conditions. Participants can register to bid on multiple plots. If a participant does not win the first plot but has not violated the auction rules, they may participate in subsequent auctions but must pay additional auction fees, the specific amount is determined by the Provincial People's Council to suit local conditions.

5. Contents of the minutes of each auction round

In addition to the essential contents of a regular minute, the minutes of each auction round also include the following main contents:

a) Location of the auction.

b) Composition of the Auction Council.

c) Number of participants in the auction...

d) Starting price...

e) Highest bid...

f) Lowest bid...

g) Conclusion:...

h) Effectiveness: (for the final auction round)

- Date of land handover.

- Date of signing the contract and paying the land use fee, lease fee.

- Date of completing the land dossier.

Article 12. Examination and approval of auction results

1. Based on the auction minutes, the Auction Council or the Department of Finance (in cases where the task of auctioning is entrusted to state organizations authorized to conduct land use right auctions) submits to the Chairman of the competent People's Committee for approval of the auction results.

2. Content of the approval of the auction results includes: name, address, ID number of the winning bidder (clearly stating the name of the organization or individual, account number), location of the plot, winning price, total amount payable to the State budget, and other necessary contents.

Article 13. Allocation of land and issuance of land use right certificates to successful auction participants

1. Based on the decision approving the auction results issued by the competent state agency and the certificate confirming that the successful bidder has fully paid the land use fee or land rental fee, the natural resources and environment authority shall submit to the competent state agency for a decision on allocating land or leasing land according to current laws on land.

2. The Department of Natural Resources and Environment under the People's Committee of the province or the Department of Natural Resources and Environment under the People's Committee of the district, within their respective jurisdictions, are responsible for transferring land on-site, preparing land files, issuing or submitting to the competent state agency for issuance of land use right certificates to the successful bidder in accordance with the provisions of the law and related documents based on the auction minutes, the decision on land allocation or leasing, registration of land use rights, and handling procedures for the land user.

The People's Committee of the province shall specify the time limit for the natural resources and environment authority to perform the above tasks in accordance with the current provisions of the law on land.

3. The decision on land allocation or leasing, the auction document, and other related documents serve as the basis for the land recipient to register land use rights.

Article 14. Rights and responsibilities of the successful bidder

1. Rights: to be allocated or leased land by the State according to the approved auction result of land use rights by the competent state agency.

2. Responsibilities: to fulfill all commitments made when participating in the auction and the approved auction result of land use rights by the competent state agency.

Article 15. Payment, accounting, and management of funds received from auctions

1. In cases where the auction involves a plot of land belonging to a project using land funds to build infrastructure: the remaining amount after paying the value of the infrastructure construction works to the investor and the advance payment for compensation and support to those whose land is being reclaimed shall be deposited into a separate account opened by the Department of Finance at the State Treasury and used for investment in common infrastructure construction projects as approved by the competent authority.

2. In cases where the auction involves plots of land with many advantages for production, business, and services to create capital for local common infrastructure construction: the amount collected after paying the advance payment for compensation for land damage to those whose land is being reclaimed and the costs of technical infrastructure construction (if any) shall be included in annual revenue to the state budget and used for investment in common infrastructure construction projects as approved by the competent authority. The division of this revenue among different levels of the budget shall be stipulated by the Provincial People's Council.

3. In cases where the auction is for land allocation with land use fees or leasing not falling under paragraphs 1 and 2 of this Article, the amount collected after paying the advance payment for compensation for land damage to those whose land is being reclaimed and the costs of technical infrastructure construction (if any) shall be included in annual revenue to the state budget. The division of this revenue among different levels of the budget shall be stipulated by the Provincial People's Council.

CHAPTER III
IMPLEMENTATION

Article 16. Responsibilities of State Administrative Agencies

1. The People's Committee at the provincial level shall be responsible for:

a) Deciding or delegating to the People's Committee at the district level to decide on compensation plans for land clearance and construction infrastructure plans (if any) for auction purposes.

b) Deciding or delegating to the People's Committee at the district level to establish the Auction Council or entrusting state organizations with auction functions to organize auctions, and directing such auctions.

c) Issuing Auction Regulations at the local level in accordance with these Regulations.

d) Approving or delegating authority to approve auction plans for each auction session.

đ) Approving the results of the auction to transfer land with payment of land use fees or lease land according to regulations.

e) Directing the transfer of land, leasing of land, and completion of land-related documents for the successful bidder.

g) Supervising the implementation of projects by organizations and individuals who have won the auction to ensure compliance with approved planning.

h) Reporting the results of the auction for land transfer and leasing to the Ministry of Finance periodically for consolidation and reporting to the Prime Minister.

2. The Ministry of Finance shall be responsible for leading and coordinating with relevant ministries and sectors to inspect and guide the implementation of these Regulations; during the implementation process, if there are difficulties, they shall provide guidance to comply with legal provisions.

Article 17. Handling Violations

If members of the Auction Council or state organizations entrusted with the function of land use rights auctioning, and other individuals related to the auction intentionally violate the provisions of these Regulations and the Auction Regulations issued by the provincial People's Committee, engage in actions that disclose secrets, facilitate, or act as intermediaries for participants in the auction causing damage to the State or rendering the auction unsuccessful, they will be subject to administrative penalties or criminal liability as stipulated by law depending on the severity and nature of the violation.

Article 18. Handling Complaints and Accusations

Complaints and accusations related to the organization and implementation of auctions shall be resolved in accordance with laws on complaints and accusations, land laws, and auction laws.

Article 19. Implementation Provisions

1. The auction provisions in these Regulations apply to cases of auctioning land to resolve mortgage and guarantee contracts secured by land use value to recover debts as decided by competent state agencies.

2. Based on the provisions of these Regulations and local realities, the People's Committees of provinces and centrally-administered cities shall specify detailed regulations for implementation locally./.