On the morning of November 28, discussing the revised Law on Property Auction, National Assembly deputies spent a lot of time discussing solutions to prevent the situation of abandoned auction deposits.
Most opinions share the view that recent auction deposit abandonment incidents have caused negative consequences for society in general and property auction activities in particular.
Delegates Nguyen Duy Thanh (left) and Pham Van Thinh speak at the discussion.
Should we prosecute auction deposit abandonment?
To prevent auction deposit abandonment, some delegates proposed raising the deposit to a minimum of 20% of the property value; along with that, building administrative sanctions for auction deposit abandonment, banning participation in subsequent auctions...
According to delegate Le Tat Hieu ( Vinh Phuc delegation), raising the deposit level on the one hand can create a barrier to auction deposit abandonment, but on the other hand will narrow the number of auction participants. Offering a more harmonious solution, Mr. Tien proposed a contract penalty for the auction winner who unilaterally cancels the contract to buy the auctioned property, the penalty is from 30 - 50% of the contract value.
In particular, delegate Nguyen Duy Thanh (Ca Mau delegation) suggested referring to international experience, adding regulations in the direction of criminal handling of acts of abandoning auction deposits and showing signs of manipulation, disturbing order, and negatively affecting economic security. "The Penal Code needs to add corresponding acts in property auction activities appropriately, avoiding price inflation, price dumping, causing major consequences like in the recent past," said Mr. Thanh.
On the other hand, delegate Pham Van Thinh (Bac Giang delegation) said that it is necessary to consider applying sanctions to the act of abandoning auction deposits. Because auctions are civil relations, "in all cases, it is necessary to respect and protect the right of the auction winner to abandon the auctioned property".
The Bac Giang provincial delegate proposed to adjust the regulations on the deposit amount. For example, when the bid is twice as high as the starting price, the deposit will be adjusted higher and repeated every time the bid is twice as high. "However, this regulation should only be applied to state assets put up for auction, and not to other types of assets," Mr. Thinh noted.
In addition, delegate Thinh also proposed shortening the time limit for completing financial obligations and canceling the auction results. The current regulations, 90 days and 120 days respectively, are too long, creating opportunities for profiteering. "According to common sense, buyers must prepare money, if they can buy, they must pay immediately, but those who can buy but pay later, and if they do not pay, they must wait 6 months for the State to cancel the results. This is really inappropriate," he said.
Minister of Justice Le Thanh Long (standing) explains to the National Assembly about the draft revised Law on Property Auction.
Apply the principle of "conformity with international practice"
Explaining the opinions of the delegates, Mr. Le Thanh Long, Minister of Justice - the drafting agency, emphasized the principle applied throughout the process of building the revised Law on Property Auction, which is "consistent with international practices".
According to the minister, the Law on Property Auction is a law of form, so it does not regulate all processes related to an asset, including determining the starting price, conditions for participating in the auction, and then handling the successful auction sale according to which regulations... These contents must all comply with specialized legal regulations.
Regarding the proposal to increase the deposit amount, Mr. Long cited international practice, showing that there are cases where there is no deposit requirement. Because the purpose is to sell the asset, even if the starting price is 0 VND, and collect as much money as possible.
Regarding the proposals related to sanctions for auction deposit abandonment, the Minister of Justice said that he will continue to study them in more depth. He will continue to comment on and improve on anything that can be tightened in specialized legal regulations.
The head of the Ministry of Justice said that the drafting agency has also considered handling financial violations in some specific cases such as abandoning land auction deposits in the new urban area of Thu Thiem, abandoning auction deposits for sand mines in An Giang or Hanoi...
However, according to Minister Le Thanh Long, to ensure honesty and feasibility, in addition to the strictness of legal regulations, other factors such as business ethics, professional ethics and responsibility of managers... in asset auctions are also needed.
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