Can land without a land title certificate be used as collateral for a loan?

According to the 2015 Civil Code, the assets used as collateral for mortgages are stipulated by law as follows:

- The collateral must be owned by the mortgage borrower, except in cases where the property is held in custody or ownership is reserved.

- The collateral may be described generally, but it must be identifiable.

- Collateral can be existing assets or assets that will be created in the future.

- The value of the collateral must be equivalent to the value of the secured obligation.

Accordingly, land without a land title certificate can still be used as collateral for bank loans.

Land without a land title certificate can still be used as collateral for bank loans. (Illustrative image)

However, according to Clause 1, Article 118 of the 2014 Housing Law, for mortgage transactions involving housing, the housing must meet the following conditions:

- The land is free from disputes, claims, or lawsuits regarding ownership rights.

- Not subject to seizure for the enforcement of a judgment or for the execution of a legally effective administrative decision of a competent state agency.

- Not subject to a land reclamation decision or a notice of house demolition issued by a competent authority.

Although the law allows for the mortgage of land even without a land title certificate, in reality, whether or not the loan is disbursed may depend on each bank and its specific policies.

Furthermore, according to Clause 1, Article 119 of the 2014 Housing Law, those mortgaging a house must meet the following conditions:

- Being the homeowner or a person authorized or empowered by the homeowner to mortgage the house in accordance with the Housing Law and civil law.

- Individuals must have full legal capacity to conduct housing transactions in accordance with civil law (only those 18 years of age or older can independently mortgage their property, except in cases of individuals lacking legal capacity; individuals with cognitive difficulties or impaired behavioral control; or those with limited legal capacity). Organizations must have legal personality to borrow capital from banks.

Lagerstroemia (compilation)

Source: https://vtc.vn/dat-chua-so-do-co-duoc-the-chap-vay-von-ar848124.html