Many delegates proposed increasing the deposit by 5-20%, but the Ministry of Justice said that doing so would result in fewer people being eligible to participate in the auction, potentially posing a risk of collusion to lower prices.
On the morning of November 28, the National Assembly discussed the draft Law amending and supplementing a number of articles of the Law on Property Auction, which stipulates that auction participants must pay a deposit equal to 5-20% of the starting price of the auctioned property (equal to the current level).
In the report explaining and receiving the opinions of delegates discussing in the group, the Ministry of Justice - the drafting agency - said that there was a proposal to increase the deposit level, regulating the deposit according to the value of the property. For special properties, the deposit can be increased to 50% of the starting price.
The proposal to increase the deposit comes in the context of many people recently participating and winning auctions for plots of land or beautiful car license plates, then abandoning the deposit. For example, in the Thu Thiem land auction, the auction winner rented an island in Xuan Huong Lake... Therefore, some delegates suggested adding sanctions to deal with auction winners who abandon their deposits, such as fines, compensation for auction organization costs, or not being allowed to participate in the auction for a certain period of time, or even criminal prosecution.
However, according to the Ministry of Justice, the deposit of 5-20% of the starting price of the auctioned property as stated in the draft law is suitable for practice, creating conditions to attract many people to participate in the auction.
"If the deposit is raised too high, there will be fewer people eligible to participate in the auction, potentially posing a risk of collusion to lower prices, especially for valuable assets such as land use rights," the Ministry of Justice assessed.
Meanwhile, countries currently do not have specific regulations on auction deposits. Instead, auction companies set their own deposit levels based on the type of property and auction format.
According to the Ministry of Justice, paying a deposit is one of the conditions for participating in an auction. After winning the auction, this amount will be converted into a deposit for the auction winner to fulfill his financial obligations. If the auction winner does not sign a sales contract or does not pay the auction winning money, they will lose their deposit. In case the parties sign a contract to buy and sell assets, the handling of the deposit and penalties will be carried out according to the contract and the Civil Code.
To limit the situation of "brokers" participating in auctions for the purpose of profiteering, the draft law stipulates that auction participants who do not bid, intentionally bid invalidly (below the starting price, write wrong tickets) will lose their deposit.
The drafting agency said it will work with ministries and sectors to research and perfect specialized laws on conditions for participating in auctions, especially financial capacity. At the same time, the agencies will research sanctions for auction winners who abandon their deposits, such as banning them from participating in auctions, administrative penalties, and penalties for breach of contract.
Delegates attending the 6th session of the 15th National Assembly. Photo: Hoang Phong
In this revision, the bill states the types of assets that will be sold through auction, such as land use rights, mineral exploitation rights, telecommunications number storage usage rights, Internet domain names, bad debts and assets securing the debt.
In the previous discussion, there was a suggestion not to list the types of assets to be auctioned, because it is difficult to predict all types of assets that will arise in the future. There was also a suggestion not to stipulate auctions for low-value assets.
According to the Ministry of Justice, the law amending a number of articles this time inherits the viewpoint that the Law on Property Auction is a formal law. That is, the regulations on the order and procedures for property auctions are applied consistently with specialized laws. Therefore, the draft law lists the types of assets that must be sold through auction according to specialized laws, including land use rights for investment project construction, public assets such as intellectual property rights, software, and databases.
The draft Law stipulates standards and conditions for auctioneers, such as having a university degree in law, economics , accounting, finance, and banking, which are appropriate to the nature and characteristics of the auction profession related to the handling of assets. However, auctioneers are not exempted from auction training as before. This, according to the Ministry of Justice, ensures that all those who want to practice auctioneering must undergo vocational training, improving the quality of the auctioneers' practice.
Also on the morning of November 28, the National Assembly will vote to pass the Law on Real Estate Business (amended). In the afternoon, delegates will vote to pass the Resolution on piloting a number of specific mechanisms and policies on investment in the construction of road traffic works; and the Law on Forces participating in protecting security and order at the grassroots level.
Delegates will discuss in the hall the draft Law on Defense Industry, Security and Industrial Mobilization.
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