Proposal to increase minimum deposit to 10% when auctioning land use rights

Continuing the 6th session, on the afternoon of November 8, the National Assembly listened to the Government present the draft Law amending and supplementing a number of articles of the Law on Property Auction.

Presenting this content, Minister of Justice Le Thanh Long pointed out a number of revised and supplemented contents, such as removing the condition of having 3 years of working time in the trained field to be able to participate in the auction training course in order to remove barriers in participating in the auction training course, ensuring feasibility, suitability with reality, contributing to the development of the source of auctioneers.

Another new point is the amendment and supplementation of some main contents of the auction regulations, such as regulations on the start and end time of the sale, receiving auction participation documents, deposit, price steps, bidding, valid and invalid bids, deadline for signing the contract for the sale of auctioned assets after the auction ends... and the publication of the Auction Regulations on the National Property Auction Portal.

The draft also adds some specific regulations on the order and procedures for auctioning specific assets including land use rights in cases of land allocation and lease for investment projects, mineral exploitation rights, radio frequency use rights, and assets subject to execution of judgments, such as the time of sale and receipt of auction participation documents (the listing time is longer than for normal assets).

Dialogue - Proposal to increase the minimum deposit to 10% when auctioning land use rights — Minister of Justice Le Thanh Long (Photo: Quochoi.vn).

Method of determining deposit in case the starting price has not been determined in money, according to the quantity of assets and the highest starting price; the person with the assets to be auctioned reviews the request and conditions for participation in the auction of the auction participants.

The revised content also includes stopping or canceling the organization of auctions in some cases; adding a new Article regulating the principles of auction management in the case of auctioning the right to use radio frequencies and assigning the Government to specify this content in detail to ensure compliance with the practices of countries around the world.

This regulation aims to remove difficulties and obstacles when applying common auction procedures for some special assets in the past, contributing to freeing up resources and improving the efficiency of asset handling, especially public assets.

During the review, Chairman of the Economic Committee Vu Hong Thanh said that the majority of opinions of the Economic Committee agreed with the Government's Proposal on the necessity of promulgating a Law amending and supplementing a number of articles of the Law on Property Auction.

Regarding auctioned assets, Article 4 of the draft lists assets that the law requires to be sold through auction, including “bad debts and collateral assets of bad debts of organizations in which the State owns 100% of the charter capital established by the State Bank of Vietnam to handle bad debts of credit institutions in accordance with the provisions of law”.

Chairman of the Economic Committee Vu Hong Thanh said that there were opinions suggesting adjusting the provisions in this article in the direction of not listing them as in the draft Law, because this could easily lead to duplication or overlap, conflict when the law regulating specialized fields (for example, land, telecommunications, radio frequencies, minerals, etc.) had to be amended and supplemented; at the same time, it is difficult to foresee all new types of assets that will arise in the future (for example, assets, property rights of artificial intelligence (AI) if recognized in the future).

Dialogue - Proposal to increase the minimum deposit to 10% when auctioning land use rights (Figure 2). — Chairman of the Economic Committee Vu Hong Thanh (Photo: Quochoi.vn).

Regarding the regulations on deposit and handling of deposit, Mr. Thanh reflected that there are opinions that raising the minimum deposit rate to 10% when auctioning land use rights in cases of land allocation and land lease to implement investment projects (Clause 1a, Article 39), an increase of 5% compared to normal auctioned assets (the minimum deposit rate for normal assets is 5%) will help limit the situation of taking advantage of auctions to disrupt the market and make profits.

However, there are also opinions that the regulation on the deposit rate being too high leads to technical barriers, making the auction less competitive.

Therefore, it is recommended to study and adjust the difference between the minimum and maximum deposit in a reasonable and feasible manner; consider regulating the deposit amount based on the scale of the auctioned land area or based on the value of the auctioned property.

There is a proposal to study the regulation of the deposit amount for the case of auctioning land lease rights with annual payment. The low land lease price leads to the deposit amount in this case (minimum 10% and maximum 20%) being very low.

Immediately after listening to the presentation and the verification report, the National Assembly discussed in groups the Draft Law amending and supplementing a number of articles of the Law on Property Auction .

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