The Ministry of Justice has proposed a draft resolution to address issues related to land use rights auctions in cases of land allocation and lease, as outlined in the Land Law.
According to the Ministry, land auctions have recently exposed several limitations. These include instances of bidders offering unusually high prices, potentially colluding to manipulate prices, and exploiting auctions for profit before defaulting, which negatively impacts the real estate market’s healthy development.
Under current regulations, low starting prices in certain cases lead to low deposit requirements, encouraging speculative bidding and defaulting.
Additionally, for individual land auctions, there are no legal penalties for bidders who default after winning.
To address these issues, the Ministry of Justice proposes adding a mechanism to handle defaulting in land auctions.
 Consultation desk outside the land auction area in Thanh Oai district. Photo: P.T |
The proposal suggests that defaulters must compensate for all damages arising from the auction’s organization, including auction service fees and organizational costs, due to the cancellation of land use rights auction results.
Defaulters would also face a ban from participating in auctions for a specified period: 2 to 5 years for winning without payment, and 6 months to 3 years for incomplete payment after winning.
The draft also increases the minimum deposit for individual land auction participants to 20%, with a maximum of 50%. Currently, the minimum deposit is 5% for residential land and 10% for investment projects, with a maximum of 20%.
The Ministry of Justice believes this measure will deter the exploitation of auctions for profit and subsequent defaulting.
If approved, the resolution will be effective from its issuance until February 28, 2027.
However, concerns have been raised that this proposal may restrict human rights and citizens’ fundamental rights and obligations. The Constitution mandates that such rights be defined by law, not by government resolutions.
In response, the Ministry of Justice clarified that the Civil Code allows courts to deny protection of rights, in whole or in part, and mandate compensation for damages caused by the abuse of civil rights. Therefore, penalizing defaulters by banning them from auctions “should not be considered a restriction of citizens’ rights or human rights.”
Furthermore, as asset auctions are a form of asset transaction rather than a business activity, this proposal does not restrict the freedom of business as outlined in the Constitution, according to the drafting agency.
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Records show that land auctions surged from August 2024 to mid-2025 in the outskirts of Hanoi, later spreading to other provinces. Last year, at an auction of 19 plots in Long Khuc village, Tien Yen commune (former Hoai Duc district), the highest bid reached over 133 million VND/m², totaling 15 billion VND, 18 times the starting price. However, 8 out of 19 winning bidders defaulted. In former Thanh Oai district, an auction of 68 plots in Thanh Than village, Thanh Cao commune, saw the highest bid reach 100 million VND/m², 8 times the starting price. Yet, 56 out of 68 winning bidders defaulted. Similarly, an auction in former Ha Dong district in October 2024 saw 80% of winning bidders default. |
Hồng Khanh
– 15:09 20/10/2025
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