Should deposit money to buy land?

Cases of buying a lot of valued land may be at risk because of the loose law and the lacking of sanctions on this behavior. HCM City Real Estate Association (HoREA) has just proposed a series of solutions to correct the division situation of illegal sale plots, in particular, emphasizing the risks for customers when making a deposit which is too big to buy land (houses).


Specifically, in Clause 1, Article 328 of the Civil Law mentioned of the act of deposit for the purpose to ensure the conclusion or performance of contracts before signing the contract. However, the Business Law Real estate without regulations on "deposit" is a notable point because this is a big hole.


HoREA said, taking advantage of this loophole of the law, the oligarchs sell illegal land in the future, using methods such as: placeholder deposit agreement; capital contribution agreement; investment cooperation agreement... with a large deposit value would cause risks for customers. While the Law on Real Estate Business stipulated that after signing the contract, the investor of a future real estate business project may only receive the first payment of the customer not exceeding 30% of the contract value.


The act of deposit also has inadequacies in the Civil Code. Article 117 of the Civil Code stipulated the effective conditions of a civil transaction to be completely voluntary; not violating the prohibition of the law, not contrary to social morality. The basis of sanctions for deposit acts is almost nonexistent because the parties must comply with the form of a civil transaction as a condition of the effect of a civil transaction in case the law stipulates it.


A land plot project in Ho Chi Minh City. Photo: Dothi.net


Clause 1 of Article 328 of the Civil Code stipulated "Deposit is the deposit party send to the receiving party a deposit or precious metal, precious stones or other valuable objects for a period of time to ensure the conclusion of the contract or contract performance".


The Association recommended that the act of deposit when buying real estate should be regulated, even stating the sanctions in new specialized laws to ensure safety for buyers. For example, deposit just to ensure a future real estate sale and purchase contract (including land) must be complied with must comply with the Civil Code and must comply with the regulations. of the new tight Real Estate Business Law.


In addition, the Civil Code does not prescribe the rate or limit of the value of the deposit on the value of the contract (or the contract expected to conclude), but by the parties themselves. Taking advantage of the inconsistency of the legal system in this case, the investors sell illegal land in the future illegally, have agreed to deposit with customers and receive great value of deposits, which causes damage to customers.


The receipt of deposits with great value is also inconsistent with the provisions of the Law on Real Estate Business. Therefore, the Law on Real Estate Business requires that investors of real estate projects to be formed in the future only receive the first time not exceeding 30% of the contract value. But in fact, there are many cases of selling land (houses) collect deposits exceeding this rate. If the project occurs, customers can be buried with large capital flows, even fall into a weak position if they want to reclaim money because the law lacks sanctions and regulations on deposit acts are still too loose.


According to Vu Le