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In disputes concerning deposits for the transfer of land use rights, two grounds are commonly invoked to seek a declaration that a deposit agreement is invalid: the relevant property is mortgaged to a bank, and the person who signed and received the deposit is not the person named in the land use right certificate.   Precedent No. 79/2025/AL, however, confirms that neither circumstance automatically invalidates a deposit agreement. The decisive factors are not limited to the legal status of the property or the identity of the signatory, but also include the parties’ knowledge and intention, the scope of authorization, the negotiation and execution process, and, in particular, the actual reason why the land use rights transfer agreement was not executed.   Precedent No. 79/2025/AL was developed from Cassation Decision No. 296/2023/DS-GĐT dated 13 December 2023 of the Judicial Committee of the High People’s Court in Ho Chi Minh City. It was adopted by the Judicial Council of the Suprem...

In practice, many real estate transfer transactions are declared void despite the transferee having been issued the Certificate of land use rights, ownership of houses and other assets attached to land, and having mortgaged the house and land use rights to a Bank in accordance with legal regulations. In such cases, the validity of the mortgage contract depends on the Bank’s verification and appraisal of the real estate prior to entering into the contract.   1. Legal consequences of void civil transactions and rights of bona fide third parties   According to Clause 1, Article 131 of the 2015 Civil Code, when a civil transaction is void, the parties shall restore the original status and return to each other what they have received. In cases where a real estate transfer transaction is declared void, the transferor remains the legal user of the land and owner of the residential house under civil law. However, if the real estate has been registered with the competent state authority after...