Supreme Court’s Precedent 55/2022 recognising validity of an unnotarised contract for transfer of land use right

In October 2022, the Vietnamese Supreme Court issued Precedent 55/2022 which recognized the validity of an unnotarized contract for the transfer of land use rights

The contract in question was signed in 2009 and involved the transfer of a piece of land that was to be allocated to the seller by the government under a land compensation scheme

The seller received the land use right certificate for the transferred land in 2016 and the buyer paid around 90% of the sale price and leased the land to a third party

The seller later refused to register the transfer and claimed that the contract was invalid because it was not notarized

The Supreme Court upheld the lower court's decision to recognize the validity of the contract because the parties had performed two-thirds of their obligations under the contract, as required by Article 129.2 of the Civil Code 2015

Precedent 55/2022 suggests that Article 129 of the Civil Code 2015, which took effect in 2017, can be applied to contracts entered into and performed before that date, and that the transfer of "future land use rights" may be valid if the land use right certificate is obtained at the time of the dispute.