If you drop a deposit, you may be banned from auctioning land for 5 years

“Putting down the deposit can be banned from land auction for 5 years” is one of the amendments in Decree 43 recently drafted by the Ministry of Natural Resources and Environment.

Ban from participating in the auction for 5 years if you voluntarily drop the deposit

The draft proposes to ban depositors from participating in auctions for 5 years. Specifically: If auction participants voluntarily give up the deposit (deposit – PV) and refuse to participate in the auction, they will have to compensate the state an additional amount equal to the value of the deposit; within 5 years are not allowed to participate in the auction of land use rights.

Auction land in Thu Thiem, Ho Chi Minh City has been abandoned

After auction participants pay enough compensation to the state, they will receive back the mortgaged property. In case auction participants do not pay compensation, it will be deducted from the collateral.

The value of the collateral must be greater than the starting price of the auctioned land plot. Auction participants and auction organizations can agree to replace security assets and deposit with a guarantee Bank.

In the draft, MONRE proposes that participants in the auction of land use rights be provided with sufficient information related to the auctioned land parcel; has the right to refuse to participate in the auction and receive a refund of the deposit in case there is a change in the listed starting price, location, area, and type of land; in case the deposit generates interest, the auction participants shall receive such interest; To receive back the security property in case of not winning the auction or winning the auction and having paid in full according to the land use right auction plan.

In case an organization or individual wins an auction of land use rights but fails to pay enough money or fails to pay money according to the land use right auction plan, the land use right auction winner will receive back the value of the secured property. guaranteed after deducting the prescribed fines.

After winning the auction, the project must be implemented according to the approved schedule in the land use right auction plan; If the auction winner fails to put the land to use within 12 consecutive months or the land use progress is 24 months behind the schedule stated in the investment project from the date of receipt of land handover in the field, the State The land will be recovered according to the provisions of the law on land and without compensation.

The Ministry of Natural Resources and Environment also proposes that auction participants cannot receive their deposit back in the following cases: Having paid the deposit but not participating in the auction, the price announcement meeting but not falling under force majeure circumstances. ; being disqualified from participating in the auction due to violations of the law; refuse to sign the auction minutes as prescribed; withdraw the price paid or accepted; refuse auction winning results without good reason.

In case an auction participant voluntarily cancels the auction winning result without a valid reason, in addition to the deposit, the auction participant must also pay an amount equivalent to 50% of the value of the winning land use right. and auction costs to the auction organization’s own payment account opened at a commercial bank or foreign bank branch in Vietnam.

Regulations on subjects and money to be placed before participating in the auction

In this draft, MONRE proposes to supplement regulations on determining and approving the starting price of the auctioned land plot; conditions of organizations and individuals participating in the auction; stipulates the rights and responsibilities of auction participants.

Specifically, according to the draft, organizations participating in the auction of land use rights must fully meet the following conditions: Belonging to the subjects of land allocation or land lease by the State according to the provisions of Articles 55 and 56 of the Land Law 2013.

Having capital under his/her ownership for project implementation is not less than 20% of the total investment, for projects with a land use scale of less than 20 hectares; not less than 15% of the total investment for projects with a land use scale of 20 hectares or more; has experience in implementing investment projects using land.

Do not violate the provisions of the law on land in case they are using land allocated or leased by the State to implement other investment projects.

Deposits and collateral must be paid to the auction organization to ensure capacity finance implement the project when winning the auction according to the approved plan.

The draft stipulates that individuals participating in the auction of land use rights must fully meet the conditions specified at Points 1 and 5 above. In case an individual participates in the auction of land use rights to implement an investment project, he/she must fully satisfy the conditions specified above.

The deposit amount is agreed upon by the auction organization and auction participants, but must be at least 20% of the starting price of the auctioned asset. The deposit is deposited into a separate payment account of the auction organization opened at a commercial bank or foreign bank branch in Vietnam. In case the deposit is worth less than 5 million VND, auction participants can pay directly to the auction organization. Auction participants and auction organization may agree to replace the deposit with a bank guarantee.