The Art of Persuasion: Crafting a Compelling Headline “The ACB Chairman’s Conundrum: Navigating the Murky Waters of Real Estate Collateral”

The financial institutions are seeking further guidance on the Land Law, as per the proposal to the Government by Mr. Tran Hung Huy.

0
92

Chairman of Asia Commercial Joint Stock Bank (ACB), Tran Hung Huy, speaking at the conference – Photo: VGP/Nhat Bac

At the Government’s meeting with banks on the afternoon of September 21, ACB’s Chairman, Mr. Tran Hung Huy, stated that the new laws enacted in 2024 have brought about significant changes and positive impacts on the real estate market, such as the Land Law, Housing Law, and Real Estate Business Law.

However, credit institutions hope for more detailed guidance regarding specific mortgage acceptance, particularly concerning production and business land (annual land rent) in industrial zones. According to Article 37 of the 2024 Land Law, only the right of transfer is stipulated for leasehold land, and mortgage rights are limited to assets owned by the lessee that are attached to the land.

This restriction impacts credit institutions’ ability to determine the value of annual land rent in industrial zones and relies on the cooperation of investors due to legal risks associated with handling secured assets.

Meanwhile, the market demand is enormous. Industrial real estate has maintained its leading position throughout 2023 and continued to grow in the first half of 2024, driven by policies promoting public investment and the substantial potential of FDI capital.

According to Mr. Tran Hung Huy, clear guidance permitting the acceptance of leasehold rights as collateral would enable enterprises utilizing annually rented land to maximize their resources and the value of their land use rights. It would also facilitate their access to capital by allowing them to mortgage this leasehold right and provide a comprehensive legal basis for credit institutions in valuing and accepting leasehold land as collateral.

Regarding production and business land (one-time land rent/land allocation with payment), Point b, Clause 3, Article 33 of the 2024 Land Law permits the mortgage of investment projects with business purposes that are entitled to land use fee or rent exemption or reduction.

However, this mortgage can only be executed if the enterprise has repaid the State a sum corresponding to the period for which it was exempted from land use fees or rent. Currently, there are no guidelines on determining this amount. In reality, some projects are eligible for land use fee or rent exemption or reduction, but there are no detailed instructions on calculating the amount corresponding to the exempted or reduced fees or rent to be repaid to the State.

“What remains unclear is how this amount is determined, whether it includes interest for late payment, and whether there are other influencing factors,” shared Chairman Tran Hung Huy. He further added that credit institutions, as well as related agencies such as notary offices, land use right registration agencies, and secured transaction registration agencies, are confused about how to handle these situations, directly impacting enterprises’ interests.

Therefore, detailed guidance on this matter is highly necessary. It will expand and create opportunities for credit institutions and customers to have additional mortgage acceptance rights in these cases.

“ACB earnestly hopes that the Government and relevant ministries and sectors will soon issue Decrees and Circulars to guide these issues. This will enable credit institutions and customers to maximize their resources and assets to expand and develop their businesses. Banks in the system are united in controlling input costs, thereby creating a basis for further reducing lending interest rates,” emphasized ACB Chairman Tran Hung Huy.

You may also like

The Banking Sector Discusses Solutions to Support Businesses and Individuals Affected by Storm No. 3: Big4 Announces Interest Rate Reduction Policies

According to the Provincial/Municipal State Bank of Vietnam’s data, approximately 73,000 customers were impacted by Typhoon No. 3, with an estimated outstanding debt of VND 94 trillion.

“Deputy Prime Minister Calls for Stronger Penalties to Curb Administrative Violations in Land Management”

The Government Office has issued Notification No. 425/TB-VPCP dated September 18, 2024, conveying the conclusions of Deputy Prime Minister Tran Hong Ha at the online and direct meeting on the Decree stipulating administrative sanctions for land-related violations.

The Money Stream: A Clean Sweep for Auction Land

“With apartment prices soaring and scarcity still an issue, it’s no surprise that investors are seeking alternative avenues for their capital. The current market climate demands a shift in perspective, and that’s where opportunities lie for those brave enough to venture beyond the familiar.”

The Ho Chi Minh City Tax Department Requests an Emergency Meeting to Clear Backlogged Land Records

The Ho Chi Minh City Tax Department has proposed that land-related dossiers arising from August 1st onwards, prior to the People’s Committee of Ho Chi Minh City’s decision to adjust the new land price framework, should be subject to the old land prices for financial obligation calculations.

Remittances to a Border Province Reach $2.5 Billion in Six Months, Matching Ho Chi Minh City’s Remittances for the Same Period

With a population of approximately 7,000 overseas locals, the province boasts a vibrant and diverse community of expatriates.