Circular No. 26/2015/TT-NHNN guides the procedures and formalities for mortgaging and releasing mortgage on assets that are housing development projects or future housing units.

CIRCULAR

Guidelines on the procedures and formalities for mortgaging and releasing mortgage on assets that are investment projects

for constructing housing, housing under development,i

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Pursuant to the Civil CodeNo. No. 33/2005/QH11 dated June 14, 2005;

Pursuant to the Law on HousingNo. No. 65/2014/QH13 dated November 25, 2014;

On the basis of Law on the State Bank of VietnamNo. Pursuant to Law No. 46/2010/QH12 dated June 16, 2010;

Based on the Law on Credit Institutions No.No. No. 47/2010/QH12 dated June 16, 2010;

Pursuant to Decree No. 99/2015/NĐ-CP dated October 20, 2015 of the Government detailing and guiding the implementation of the Law on Housing;i Pursuant to the request of the Director of the Legal Department and the Director of the Policy Department;

Pursuant to Decree No. 156/2013/NĐ-CP dated November 11, 2013, of the Government stipulating the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

The Governor of the State Bank of Vietnam issues this Circular on guidelines for the procedures and formalities for mortgaging and releasing mortgage on assets that are investment projects for constructing housing and housing under development.on1. This Circular provides guidelines on the procedures and formalities for mortgaging and releasing mortgage at credit institutions, foreign bank branches for the following assets:

c) Housing under development constructed on a lawful residential land plot of organizations or individuals.FUNCTIONS, DUTIES, POWERS, ORGANIZATIONAL STRUCTURE, OPERATIONAL REGULATIONS, AND RELATIONSHIPS OF MANAGEMENT BOARDS; DUTIES, POWERS OF THE CHAIRPERSON, VICE CHAIRPERSON (IF ANY), SECRETARY, AND MEMBERS OF MANAGEMENT BOARDS2. The mortgaging of property rights arising from contracts for the sale, lease-purchase of housing, transfer of investment project contracts, and other property rights related to housing under development and investment projects for constructing housing, which are eligible for mortgaging according to the law, must be carried out in accordance with the provisions of the Law on Housing, Decree No. 99/2015/NĐ-CP dated October 20, 2015 of the Government detailing and guiding the implementation of certain articles of the Law on Housing and relevant laws.For power plants invested under the Build-Operate-Transfer (BOT) model, n is determined according to the operational period of the power plant stipulated in the BOT contract.3. Notarization of mortgage contracts and registration of mortgages shall be conducted in accordance with the provisions of the law on notarization, mortgage registration, and relevant laws.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

1. Credit institutions, foreign bank branches established and operating under the Law on Credit Institutions (hereinafter referred to as credit institutions).

a) Investment projects for constructing houses, future houses of the project investor;

b) Future houses of organizations and individuals purchasing future houses in housing construction investment projects;

2. The investor of the housing construction project (hereinafter referred to as the investor).

3. Organizations and individuals purchasing housing under development in the housing construction investment project of the investor.

4. Organizations and individuals constructing housing under development on their lawful residential land plots.

Article 2. Applicability

This Circular applies to the following subjects:

5. Other organizations and individuals related to the mortgaging and releasing mortgage of assets that are investment projects for constructing housing and housing under development.

Article 3. Principles for implementing the mortgaging of investment projects for constructing housing and housing under development

1. Credit institutions accepting the mortgaging of investment projects for constructing housing and housing under development must comply with the provisions of this Circular and other relevant laws.

2. The investor may mortgage the project or housing under development within the project at a credit institution to borrow funds for the project's investment or the construction of such housing.

3. Organizations and individuals constructing housing under development on their lawful residential land plots may mortgage such housing at a credit institution to borrow funds for its construction; organizations and individuals purchasing housing under development in the housing construction investment project of the investor may mortgage such housing at a credit institution to purchase it.

4. The mortgaging of investment projects for constructing housing and housing under development can only be carried out when these assets meet the conditions for mortgaging stipulated in Article 7 of this Circular.

5. In cases where the investor has already mortgaged housing under development within the investment project for constructing housing, when mortgaging the project, only the part of the project excluding such housing under development can be mortgaged.

6. If property rights related to the investment project for constructing housing and housing under development, which are eligible for mortgaging according to the law, have already been mortgaged, then such investment projects for constructing housing and housing under development cannot be mortgaged according to the provisions of this Circular.

3. An organization or individual constructing a future residential house on their own lawful residential land plot may mortgage such residential house with a credit institution to borrow funds for the construction of that residential house; an organization or individual purchasing a future residential house within a real estate development project of the developer may mortgage such residential house with a credit institution to purchase that residential house.

4. The mortgage of a real estate development project, or a future residential house can only be carried out when such assets meet all the mortgage conditions stipulated in Article 7 of this Circular.

5. In cases where the developer has already mortgaged a future residential house within a real estate development project, when mortgaging the real estate development project, only the part of the project not including such future residential house may be mortgaged.

6. If the right to property related to a real estate development project or a future residential house, which is eligible for mortgage under the provisions of the law, has already been mortgaged, then such real estate development project or future residential house shall not be mortgaged again according to the provisions of this Circular.

Article 4. Rights and Obligations of the Mortgagor

1. Rights of the Mortgagor:

a) Refuse demands from the mortgagee that are not in accordance with the agreement in the mortgage contract and the provisions of the law;

b) Receive back the documents in the mortgage file immediately after fulfilling the obligations to the mortgagee as agreed between the parties or when the mortgagor replaces the collateral with another security measure or another collateral asset upon the mortgagee's consent;

c) Other rights as agreed with the mortgagee and provided for by law.

2. Obligations of the Mortgagor:

a) Provide complete mortgage files as stipulated in Article 9 of this Circular;

b) Perform all contents agreed upon and recorded in the mortgage contract;

c) In cases where the mortgaged property is damaged, destroyed, cannot be completed, or construction is halted, the mortgagor must immediately notify the mortgagee and replace it with another asset of equivalent value or supplement/replace with another security measure, except where the parties have agreed otherwise;

d) Facilitate the mortgagee's exercise of the right to supervise and inspect the formation process of the mortgaged property;

đ) Fulfill other obligations as agreed with the mortgagee and provided for by law.

Article 5. Rights and Obligations of the Mortgagee

1. Rights of the Mortgagee:

a) Request the mortgagor to provide complete mortgage files as stipulated in Article 9 of this Circular;

b) Exercise the right to supervise and inspect the formation process of the mortgaged property;

c) Have the right to revalue the mortgaged property periodically or at any time as agreed in the mortgage contract to request the mortgagor to supplement or replace the mortgaged property or another security measure if deemed necessary;

d) Carry out the disposal of the mortgaged property according to the law in cases where the mortgagor fails to perform or performs incorrectly the obligations agreed in the mortgage contract and loan contract;

đ) Request the developer of future housing projects to sell the mortgaged property to the mortgagee, the mortgagor provides relevant information about the mortgaged property, and facilitates the mortgagee's exercise of the right to supervise and inspect the formation process of the mortgaged property;

e) Other rights as agreed with the mortgagor and provided for by law.

2. Obligations of the Mortgagee:

a) Perform all contents agreed upon in the mortgage contract;

b) Inspect and verify housing development projects and future housing projects meeting the conditions for mortgage as stipulated in Article 7 of this Circular;

c) Supervise and inspect the formation process of the mortgaged property;

d) Not obstruct or create difficulties for the formation of the mortgaged property during supervision and inspection;

đ) Return the documents submitted by the mortgagor in the mortgage file to the mortgagor after the mortgagor fulfills the agreed obligations or when the mortgagor replaces the collateral with another security measure or another collateral asset upon the mortgagee's consent;

e) After signing the mortgage contract, the mortgagee must send a notice to the developer informing them that the buyer of the future housing has mortgaged the property;

g) Retain the mortgage file in the loan file as required by law;

h) Fulfill other obligations as agreed with the mortgagor and provided for by law.

Article 6. Rights and Obligations of the Investor having Future Housing Units to Sell to Organizations and Individuals

1. Rights of the Investor:

a) Refuse to provide information and documents related to mortgage files that do not comply with this Circular;

b) Other rights as prescribed by law.

2. Obligations of the Investor:

a) The investor shall submit documents to competent state agencies for notification that housing units meet conditions for sale;

b) Provide complete and truthful documents related to housing units for the buyer to carry out mortgage procedures at credit institutions as stipulated in this Circular. Deliver to the mortgagee all relevant documents and papers related to mortgaged housing units arising after the date of establishment of the mortgage contract according to the authorization of the mortgagor;

c) Upon receiving notice from the mortgagee regarding future housing units being mortgaged, the investor shall not proceed with the transfer of such future housing units to any organization or individual unless there is a written agreement from the mortgagee;

d) Facilitate the mortgagee's exercise of supervisory and inspection rights over the process of constructing mortgaged housing units;

đ) Inform the mortgagor and mortgagee about the progress of payment for housing purchases, construction progress, and completion of housing construction;

e) Fulfill other obligations as prescribed by law.

Chapter II

PROCEDURE AND PROCEDURES FOR MORTGAGING HOUSING DEVELOPMENT PROJECTS

CONSTRUCTION OF HOUSING UNITS AND FUTURE HOUSING UNITS

Article 7. Conditions for Mortgaging Housing Development Projects and Future Housing Units at Credit Institutions

1. The investor may mortgage part or all of the housing development project when meeting the following conditions:

a) Having a project dossier and technical design of the project approved;

b) Possessing a Certificate of Conformity or decision on land allocation or lease issued by competent state agencies;

c) Being a housing development project as defined in Article 8 of this Circular.

2. The investor may mortgage future housing units within the housing development project when meeting the following conditions:

a) The conditions prescribed in Clause 1 of this Article;

b) The mortgaged housing units must be completed up to the foundation level as required by construction laws;

c) Not included in the portion of the project that the investor has already mortgaged as stipulated in Clause 1 of this Article;

d) Not involved in disputes or complaints regarding ownership rights;

đ) Not subject to attachment for enforcement of judgments or administrative decisions with legal effect issued by competent state agencies;

e) Not subject to decisions on land recovery, announcements of clearance or demolition of housing units issued by competent state agencies.

3. Organizations and individuals may mortgage future housing units as prescribed in Clause 2 of Article 147 of the Law on Housing when meeting the following conditions:

a) For organizations and individuals mortgaging future housing units built on their own lawful residential land plots:

(i) Possess lawful certificates of land use rights according to land laws;

(ii) Possess Construction Permits if required under relevant laws;

(iii) Meet the conditions specified in points d, đ, e of Clause 2 of this Article;

b) For organizations and individuals mortgaging future housing units purchased from investors in housing development projects:

(i) Possess a housing purchase contract signed with the investor;

(ii) Possess a contract transfer document if they are the transferee of the housing purchase contract according to regulations;

(iii) Possess proof of payment for the housing purchase made to the investor according to the agreed schedule in the housing purchase contract;

(iv) Not involved in complaints, lawsuits, or disputes regarding the housing purchase contract or its transfer;

(v) Meet the conditions specified in points đ, e of Clause 2 of this Article.

Article 8. Types of investment projects for constructing houses that can be mortgaged to borrow funds from credit institutions in Investment projects for constructing houses that can be mortgaged to borrow funds according to this Circular include one of the following types of investment projects for constructing houses as stipulated in Clause 2, Article 17 of the Law on Housing, including:

1. Projects for newly constructing or renovating individual housing works or clusters of housing works.

2. Projects for constructing residential areas with synchronized technical infrastructure and social infrastructure in rural areas.

3. Projects for constructing urban areas or mixed-use land projects where part of the project area is allocated for constructing housing.

4. Projects for constructing works with mixed purposes for living and business.

Article 9. Mortgage Documents

The mortgage documents for borrowing funds from credit institutions include the following papers:

1. For mortgaged assets being investment projects for constructing houses:

a) Project files and technical design documents of the project approved;

b) Certificate or decision on land allocation or land lease issued by competent state agencies (original);

c) Mortgage contract in compliance with the provisions of the law;

d) Other documents (if any).

2. For mortgaged assets being future-formed houses of the developer constructed within investment projects for constructing houses:

a) Documents specified in Clause 1 of this Article;

b) Documents proving completion of the foundation in accordance with the construction law.

3. For mortgaged assets being future-formed houses purchased from the developer within investment projects for constructing houses:

a) House purchase contract signed between the mortgagor and the developer in compliance with the law on housing (original);

b) Transfer agreement of the house purchase contract in compliance with the law on housing for cases where the mortgagor is the transferee of the house purchase contract (original);

c) Documents proving payment of house purchase money to the developer in accordance with the agreed schedule in the house purchase contract (original);

d) Mortgage contract in compliance with the provisions of the law;

đ) Other documents (if any).

4. For mortgaged assets being future-formed houses built by organizations or individuals on their own lawful residential land plots:

a) Documents certifying lawful land use rights for residential land plots in compliance with the law on land (original);

b) Construction permit if required.

PROCEDURES FOR UNDOING MORTGAGE OF INVESTMENT PROJECTS

d) Other documents (if any).

2. For mortgaged assets being future-formed houses of the developer constructed within investment projects for constructing houses:

Chapter III

Article 10. Undoing mortgage of assets being investment projects for constructing houses, future-formed houses

CONSTRUCTION OF HOUSING UNITS AND FUTURE HOUSING UNITS

1. The mortgagee and the mortgagor may agree to choose partial undoing of mortgage through reducing mortgaged assets or full undoing of mortgage of investment projects for constructing houses, future-formed houses. in 2. Agreements on undoing mortgage of mortgaged assets must be documented in writing. Notarization, procedures, and notarization processes for such agreements shall comply with relevant laws.

3. The procedure for undoing mortgage of mortgaged assets being investment projects for constructing houses, future-formed houses as stipulated in Clause 1 of this Article shall be carried out as follows:

a) When there is a need to undo mortgage of mortgaged assets, the mortgagor sends a request for undoing mortgage and related documents as agreed upon by both parties to the mortgagee;

b) The mortgagee issues a written consent to undoing mortgage and returns it along with all related documents concerning the mortgaged assets to the mortgagor as agreed upon by both parties.

a) When there is a need to release the mortgaged asset, the mortgagor sends a request for release of mortgage and relevant documents in accordance with the agreement on release of mortgage between the parties to the mortgagee.

b) The mortgagee issues a consent to release the mortgage and returns to the mortgagor the consent to release the mortgage, as well as all relevant files and documents concerning the mortgaged asset, in accordance with the agreement on release of mortgage between the parties.

Article 11. Registration of changes to mortgage, registration of cancellation of mortgage after discharge

The registration of changes to mortgage and registration of cancellation of mortgage after discharge as prescribed in Article 10 of this Circular shall be carried out in accordance with the provisions of the law on registration of changes to mortgage and registration of cancellation of mortgage.

Chapter IV

IMPLEMENTING PROVISIONS

Article 12. Implementation Organization

1. This Circular takes effect from December 10, 2015.

2. From the date this Circular takes effect, the procedures and formalities for mortgaging and discharging property that is a housing development project or future housing at credit institutions shall be implemented in accordance with the provisions of this Circular.

3. For mortgages of property that is a housing development project or future housing before the date this Circular takes effect, the parties shall perform the contents of the mortgage contract in compliance with the provisions of the law at the time of signing. Any amendments or supplements to the mortgage contract must comply with the provisions of this Circular.

4. The Director of the Office, Heads of the Legal Policy Department, Monetary Policy Department, Heads of units under the State Bank of Vietnam, Governors of the State Bank of Vietnam branches in provinces and centrally governed cities; Chairmen of the Board of Directors, Chairmen of the Board of Members and General Directors (Directors) of credit institutions are responsible for organizing the implementation of this Circular./.