We need stronger measures to deter this!

(CLO) Many experts have called for strong action against those who disrupt land auctions to serve as a deterrent and example for others. Therefore, they strongly agree with the Hanoi Police's decision to temporarily detain several individuals who "disrupted" the recent land auction in Soc Son.

Loopholes in land auctions

In 2024, almost all land auctions in Hanoi's suburban districts were plagued by controversies, to varying degrees, related to unusually high bids followed by deposit cancellations.

For example, in the auction of 58 plots of land in Soc Son on November 29th, some individuals "sabotaged" the process by deliberately bidding exorbitant prices, up to 30 million VND/m2, and then withdrawing midway through.

Elaborating further on this issue, Mr. Nguyen Thanh Tuan, a real estate expert, stated: According to land auction regulations, if a customer wins the auction but fails to pay or does not pay the full amount within 120 days of the results being announced, they will forfeit their previously deposited funds. The minimum deposit is 5% and the maximum is 20% of the starting land price.

Photo: Some land plots auctioned in Soc Son last weekend. Photo: ST

However, the starting prices at land auctions in Hanoi recently have been relatively low. Therefore, even if customers cancel their deposits midway, they won't suffer too much financial loss.

This applies to land auctions in Thanh Oai and Hoai Duc that took place in September and mid-November 2024. However, in the case of the land auction in Soc Son, a customer who bid 30 billion VND/m2 in the 5th round and did not participate in the 6th round (the decisive round) was considered to have withdrawn "validly." The customer bore no responsibility, suffered no losses, and did not even lose their deposit.

“Following the auction in Thanh Oai in September 2024, localities adjusted the starting prices of auctioned land plots upwards, thereby increasing the deposit rate before participating in the auction. The purpose was to prevent deposit cancellations. However, real estate speculators have many tricks up their sleeves, rendering the previously implemented solutions almost ineffective,” Mr. Tuan said.

Meanwhile, Mr. Nguyen Quang Huy, CEO of the Finance and Banking Faculty at Nguyen Trai University (NTU), argued that driving up land prices significantly in the initial rounds, only for bidders to withdraw in the final round, not only causes resource waste but also damages the credibility of the auction.

However, this is not the only "loophole" that exists. According to Mr. Huy, there are two other "loopholes": the current deposit amount is too low and lacks deterrent effect, and the payment period is too long or there are no clear regulations on land use progress, leading to land being left fallow and resources being wasted.

Therefore, to close this "loophole," Mr. Huy suggested that the starting price should be increased, resulting in a larger deposit amount and forcing investors to participate seriously in the auction. At the same time, the deposit rate should be increased to 30-50% of the starting price, instead of the current 5-20%.

Furthermore, the deadline for payment after winning the auction should be shortened, stipulating that the full winning bid must be paid within 10-20 days of the results being announced. After this deadline, if the full amount is not paid, the winning bid will be forfeited, and the winner will lose the entire deposit.

"Market-based valuation, increased deposit amounts, shortened payment periods, restrictions on transfers, and mandatory on-schedule construction will not only create a transparent playing field but also contribute to sustainable economic development and ensure optimal utilization of land resources," Mr. Huy emphasized.

Stronger measures are needed against those who disrupt land auctions.

Faced with this situation, ministries, departments, and even localities have implemented several solutions, such as recalculating the starting price, publicly disclosing the identities of those who bid unusually high prices and then canceled their deposits or dropped out midway. However, many believe that these solutions have not been very effective.

Several plots of land were auctioned in Soc Son last weekend. Photo: ST

Instead, many experts have called for stronger action against those who disrupt land auctions to increase deterrence and set an example for others. Therefore, they strongly agree with the Hanoi Police's decision to temporarily detain several individuals who "disrupted" the recent land auction in Soc Son, due to their collusion in inflating prices during the auction process.

According to lawyer Dang Van Cuong, Head of Chinh Phap Law Office: Due to the large profits from winning land auctions, in recent times, in many localities, some individuals participating in land use right auctions have behaved like thugs or gangsters, manipulating land use right auction activities such as competing to buy application forms, forcing the resale of application forms, reselling the land plots they won, obstructing land use right auction activities, and preventing people from other areas from participating in auctions, causing a loss of social security and order.

Many individuals have been prosecuted for various offenses, including disturbing public order.

However, disrupting public order is not limited to using physical force, violence, weapons, or verbal threats and insults to obstruct the activities of auction organizers. Obstructing auction activities also includes intentionally bidding high prices and then abandoning deposits, with the purpose of causing the auction to fail.

According to Mr. Cuong, the law strictly prohibits auction participants, winning bidders, and other individuals and organizations from engaging in the acts stipulated in Clause 5, Article 9 of the 2016 Law on Auctioning Assets, including obstructing asset auction activities.

If someone who does not need or have the ability to pay for land use, or does not want to buy it, still participates in the auction, bids high, and then forfeits their deposit, causing the auction to fail and requiring a re-auction, this is a violation of the law and constitutes a disruption of public order.

Individuals who obstruct the auction of land use rights may be subject to administrative penalties or criminal prosecution.

The administrative penalties for obstructing asset auctions are stipulated in Decree 82, with fines ranging from 7 to 10 million VND.

In cases where the act of obstructing land use rights auctions by bidding unusually high prices and then forfeiting the deposit, preventing or failing to hold the auction and negatively impacting public security and safety, the perpetrator may be prosecuted for the crime of disturbing public order as stipulated in Article 318 of the Penal Code, with the maximum penalty for this crime ranging from 2 to 7 years imprisonment.

“ In the aforementioned land use rights auction, the bidding of over 30 billion VND for residential land in Soc Son district is unusual and demonstrates a disregard for the auction process. Therefore, the authorities will investigate and clarify the identities of those who bid high prices and then forfeited their deposits, and assess the consequences caused to determine the appropriate legal action,” Mr. Cuong stated.

Viet Vu

Source: https://www.congluan.vn/nhung-ke-ho-cua-cac-phien-dau-gia-dat-can-manh-tay-hon-nua-de-ran-de-post324232.html