Proposal to allow banks to transfer projects that have not fulfilled financial obligations to collect debts

01/17/2024 09:06 Nhat Linh Print article

ANTD.VN - HoREA proposed allowing credit institutions to transfer real estate projects to recover bad debts even when the project has not yet fulfilled its financial obligations to the State.

Ho Chi Minh City Real Estate Association (HoREA) has just issued a document commenting on the Draft Law on Credit Institutions (amended) regarding regulations on transfer of secured assets.

Accordingly, HoREA said that in Clause 3, Article 200, it is stipulated that credit institutions are entitled to transfer all or part of a real estate project as collateral to recover debt and must do so "in accordance with the provisions on transferring all or part of a real estate project of the Law on Real Estate Business".

This may result in congestion in bad debt handling activities of credit institutions for bad debts whose collateral is a real estate project or part of a real estate project.

The reason is that if a project wants to be entitled to transfer according to Clause 3, Article 40 of the 2023 Law on Real Estate Business, it must fulfill its financial obligations regarding land, including land use fees, land rents, and related taxes, fees, and charges (if any) to the State...

Dự thảo Luật các tổ chức tín dụng (sửa đổi) quy định tổ chức tín dụng chuyển nhượng tài sản bảo đảm là dự án bất động sản phải theo quy định của Luật Kinh doanh bất động sản

The draft Law on Credit Institutions (amended) stipulates that credit institutions transferring secured assets as real estate projects must comply with the provisions of the Law on Real Estate Business.

The Association found that, in fact, over the years, there have been many real estate projects or parts of real estate projects that are collateral for debt recovery by credit institutions, but the investors have not yet fulfilled their financial obligations regarding land to the State.

HoREA believes that this may also be the reason why Clause 1, Article 10 of Resolution 42 only stipulates that the handling of collateral assets is a real estate project that must "have a decision on land allocation or land lease from a competent state agency" but does not stipulate the condition of having a Certificate of land use rights of the project, the transferred project part, and also does not stipulate that the transferring investor "must have fulfilled financial obligations" for the project, the transferred project part.

In addition, Clause 2, Article 10 of Resolution 42 also stipulates: The project transferee must inherit the rights and obligations of the project investor and carry out procedures to continue implementing the project in accordance with the provisions of the law on investment and the law on construction (including the obligation to fulfill financial obligations).

Therefore, HoREA proposes to amend and supplement Clause 3, Article 200 of the Draft Law on Credit Institutions (amended) in the direction that: Credit institutions, foreign bank branches, debt management and asset exploitation companies of credit institutions, asset management companies of Vietnamese credit institutions are entitled to transfer all or part of real estate projects as collateral to recover debts without having to meet the regulations on conditions and documents on investors transferring projects of the law on real estate business but must meet the following conditions:

a) The transferred real estate project must satisfy the conditions specified in Points a, d, đ, g and h, Clause 1, Article 40 of the Law on Real Estate Business No. 29/2023/QH15 and must have a land allocation or land lease decision from a competent state agency;

b) The project transferee must satisfy the conditions specified in Clauses 2, 4 and 5, Article 40 of the Law on Real Estate Business No. 29/2023/QH15.

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