The Ministry of Environment and Natural Resources (MONRE) is working on a draft decree revising six decrees guiding the Land Law, with a view to resolving existing land-related problems pending the promulgation of a new Land Law.
To-be-revised decrees include Decree 43 of 2014 guiding the 2013 Land Law; Decree 44 of 2014 on land prices, Decree 91 of 2015 on investment of state capital in enterprises and management and use of capital and assets at enterprises; Decree 01 of 2017 revising the decrees guiding the implementation of the Land Law; Decree 31 of 2021 detailing the implementation of the Investment Law; and Decree No. 148 of 2020 amending the decrees detailing the implementation of the Land Law.
With regard to Decree 43 of 2014, the MONRE proposes adding an article on auction of land use rights, focusing on regulations on determination and approval of the reserve price of auctioned land parcels; conditions for organizations and individuals to participate in the auction of land use rights as well as their rights and responsibilities.
Specifically, entities participating in an auction of land use rights for implementation of a project must have an equity equaling at least 20 percent of the project’s total investment, for projects using less than 20 hectares of land; or 15 percent, for projects using 20 hectares of land or more. Noteworthily, all auction participants would be required to pay a deposit and have collateral which would serve as proof of their financial ability. The level of deposit would be agreed upon between the auction organizer and auction participants but must be at least 20 percent of the reserve price of the property put up for auction.
In case an auction participant abandons the deposit and refuses to participate in the auction, it would have to pay an additional compensation equaling to the deposit amount. Once the auction participant fully pays the compensation to the State as required, it might receive back its collateral, otherwise the compensation would be deducted from the collateral. In addition, the auction participant would be banned from participating in auctions of land use rights in the subsequent five years.
The deposit would not be returned if the auction participant does not attend the auction or the price announcement meeting, is disqualified from participating in the auction due to commission of a violation of law; refuses to sign the auction minutes; or withdraws the bid it has offered or the price it has accepted.
If the auction winner withdraws without any plausible reasons, in addition to the deposit, it would have to pay to the auction organizer an amount equal to 50 percent of the value of the land use rights for which it would have won the auction, and the auction expenses.
As for Decree 44 of 2014, the draft revises requirements on information used for determination of land prices.
When selecting information for determination of land prices, priority should be given to the information which arises at the time nearest to the time of determination of land prices and in the area subject to determination of land prices or nearby areas with similar natural, economic, social, technical and social infrastructure conditions.
The draft lists five methods of determining land prices and, specifies conditions for application of each method. For cases eligible for application of two or more methods, the method of which the result is most beneficial to the state budget would be selected.- (VLLF)