Anh Nguyen Van Tuan, a real estate broker in Hai Duong, shares that since the end of 2023, many investors have unexpectedly asked him to help buy non-red book land without disputes or violations. Normally, these plots of land are very cheap compared to other areas, but the transactions will be done with handwritten documents.
“Many rural areas in Hai Duong have now been urbanized, with some land prices reaching nearly 20 million VND/m2. Meanwhile, plots of land with the same location but without red books are only half the price, or even one-third,” Mr. Tuan said.
Mr. Tuan gives an example of a more than 200m2 plot of land without a red book in Cam Giang district (Hai Duong) that is currently selling for about 7 million VND/m2. Meanwhile, about 500m2 away, another plot of land with a red book is being sold for 14-15 million VND/m2.
Anticipating the amended Land Law, many people are looking to buy land without a red book. (Illustrative image: Labor)
Explaining the recent trend of many people buying land without a red book, Mr. Tuan believes that the anticipation of the amended Land Law, which will make granting red books more convenient, has helped.
“Extending the land use period by 10 years compared to the old regulations is also a factor that makes granting red books easier for the people. After buying cheap land without a red book, investors can easily make red books and resell them at higher prices to make a profit,” Mr. Tuan said.
Agreeing with this, Mr. Tran Van Hung, a customer in Hanoi, also shared that before Tet, he decided to buy a 50m2 piece of land without a red book in Thanh Tri district (Hanoi) for 800 million VND. The piece of land has been stable since 2003.
“Because the land use period has been extended until 2014, granting a red book for this piece of land will also be easier,” Mr. Hung said.
However, according to Mr. Hung, issuing red books for land without documents is still complex and risky, so even though the homeowner agreed to reduce 100 million VND if paid in full, Mr. Hung still refused, only accepting to deposit 50% of the total value and pay the rest when the homeowner makes the red book and transfers ownership. The buyer will bear all the costs.
“Although cheap land and depositing have their risks, if the land receives a red book, it will no longer have that price. When investing, as long as there is a glimmer of hope, you have to accept the risk,” said Mr. Hung.
Buying land without a red book has many hidden risks. (Illustrative image)
What to note when buying land without a red book?
According to Mr. Nguyen Van Dinh, a real estate legal expert, Article 138 of the 2024 Land Law just passed by the National Assembly has regulated the granting of certificates of land use rights, ownership rights attached to land (referred to as “red books”) to households, individuals currently using land without documents on land use rights that do not violate land laws, do not fall under the case of land transfer without authorization.
Accordingly, the draft has expanded, allowing the granting of red books for the case of land use before July 1, 2014, now confirmed by the Commune People’s Committee to be free from disputes, recognized land use rights.
In practice, this regulation is being applied, only extending the deadline from before July 1, 2004, to before July 1, 2014, meaning adding 10 years to the 2013 Land Law. Note that Article 138 is to handle the issuance of red books for cases that do not violate land laws, do not transfer land without authorization, meaning there is no infringement such as land encroachment.
This law mainly solves the cases of ancestral lands that have been used for a long time, but due to residents in economically and socially difficult areas, limited legal understanding, or lack of demand for land transfer, they did not register for red book issuance.
“I agree with this expansion to ensure the interests of the people. The most important thing here is that the people have not violated land laws and have not transferred land without authorization, so their rights must be protected,” Mr. Dinh emphasized.
However, according to Mr. Dinh, it will not be easy to complete the issuance of red books for the people in practice.
For example, if residents do not submit documents to proceed with the procedures for issuing land use right certificates, state agencies have no legal basis to do so.
In addition, some cases previously transferred by the Commune People’s Committee, falling under the case of unauthorized land transfer, have also encountered difficulties in applying for red books.
Moreover, the procedure for requesting the Commune People’s Committee to confirm land free from disputes also poses difficulties in cases where there are civil disputes between land users (typical cases are land transferred through multiple people via handwritten documents or cases where parents leave inheritance, gift the land use rights to their children but the children have conflicts, disputes over inheritance rights).
Regarding buying and selling with a deposit contract, Mr. Dinh said that the transaction of depositing for the transfer of land use rights as above is legal, not illegal. However, the parties need to clearly agree in writing, sign a deposit contract with detailed terms and specific obligations of the parties.
Customer information that needs attention is information about the transferred land plot; the deposit amount and form of payment; the price of land use rights transfer and the form, deadline for payment; financial obligations when issuing red books to Party A and who is responsible for this obligation; duration of the contract; the responsibility of Party A and Party B if they fail to fulfill their obligations (penalty amount); rights and obligations of the parties, etc.
According to the provisions of the law, a deposit contract does not have to be notarized, but for contracts with high value, the parties need to choose notarization to ensure their rights and prevent disputes. The transfer of deposit money should also be conducted through banks with a handover record.
