Resolving Disputes over Real Estate Project Transfer Contracts in Vietnam
In Vietnam’s real estate market, project transfer contracts are complex and often carry significant legal risks. When disputes arise, can the aggrieved party effectively reclaim their rights? Below is a comprehensive guide based on the current legal framework and practical experience to help you understand how to handle disputes in real estate project transfer contracts.
1. Legal Context & Fundamental Principles
1.1. Real Estate Business Law 2023 & Decree No. 96/2024/NĐ‑CP
The Real Estate Business Law 2023 introduced several critical updates for project transfer transactions, tightening conditions to minimize legal risks.
A notable change: when transferring a project, the land use rights for the transferred portion must not be under dispute, enforcement freeze, or administrative review by competent authorities.
Decree 96/2024/NĐ‑CP, effective from July 2024, further clarifies the procedures and stricter conditions for transferring real estate projects.
1.2. Transfer Conditions & Common Risks
A real estate project under dispute usually does not meet legal conditions for transfer. If parties proceed with the transaction while the land use rights are disputed or frozen, the contract is highly likely to be declared invalid or annulled.
Both transferor and transferee should thoroughly verify:
Legal Status: The transferor must be the legal project owner or have the right to transfer.
Asset/Project Condition: The project must not be subject to disputes, enforcement freezes, or transaction suspension.
Project Documentation: Includes investment approvals, construction permits, zoning plans, etc.
Contract Requirements: The contract must be notarized and clearly define rights, obligations, payment schedule, and dispute resolution clauses.
If any of these conditions are violated, the injured party may sue to request contract annulment or enforcement, depending on the case.
2. Dispute Resolution Options
Once a dispute arises, parties can pursue the following avenues:
2.1. Negotiation
This is the least confrontational approach. Key considerations during negotiation:
Send a final notice urging the counterparty to fulfill obligations (e.g., payment, handover, documentation, asset transfer).
Document all communications (emails, messages, meeting minutes) as evidence in case litigation follows.
If negotiations fail, further legal action may be necessary.
2.2. Commercial Arbitration
If the contract specifies arbitration as the dispute resolution method, this route can be pursued. Arbitration offers a faster, more confidential, and flexible alternative to court proceedings. However, disputes involving administrative elements (e.g., land recovery, investment decisions) must still be addressed by courts or administrative authorities.
2.3. Litigation in Court
When negotiation and arbitration fail, litigation is the official channel to protect legal rights. Consider the following:
Jurisdiction: According to civil procedure laws, disputes over project transfer contracts are usually handled by provincial or district-level People’s Courts, depending on the asset’s location and dispute value.
Mediation Requirement: For disputes over land use rights, mediation at the commune level is not mandatory (as per Resolution 04/2017/NQ‑HĐTP).
Statute of Limitations: Article 429 of the 2015 Civil Code sets a 3-year time limit from the date the claimant knew or should have known about the infringement.
Common Claims: These include enforcing the contract, requesting annulment, demanding compensation, and calculating late interest payments.
Litigation Phases: Includes filing, case acceptance, mediation (if applicable), trial, and appeal proceedings.
A real case example: A first-instance judgment in a project transfer dispute was appealed due to incorrect calculation of commercial court fees. The appellate court adjusted the fees based on the Prosecutor’s appeal.
3. 5-Step Litigation Process for Project Transfer Disputes
Here’s a standard 5-step litigation model used by law firms to support clients in real estate contract disputes:
Step 1 – Prepare Litigation Documents
Statement of claim with legal grounds and specific demands
Contract and annexes, handover records, project documentation
Evidence: emails, invoices, payment plans
Identity documents (individual or corporate)
Step 2 – File and Acceptance
Submit to the court with proper jurisdiction (defendant’s location or asset location)
The court evaluates and officially accepts the case if valid
Step 3 – First-Instance Trial
The court summons parties, facilitates mediation if allowed
Parties present arguments, can request project inspections or expert opinions
The court issues a ruling: approve, partially approve, or reject the claim
Step 4 – Appeal / Second-Instance Trial (if any)
Unhappy parties may appeal within the statutory period
The higher court reconsiders both facts and law, possibly overturning or amending the ruling
Step 5 – Judgment Enforcement
If the judgment is final and not voluntarily followed, enforcement will proceed
Measures include asset seizure, project right recovery, and forced transfer
4. Practical Tips to Maximize Your Chances of Winning
Gather strong evidence: Contracts should detail payment schedules, breach handling, penalties, and delivery terms.
Issue valid final notice: Ensure you send a last notice before initiating litigation to show that you requested compliance.
Verify and inspect project status: Request inspections if disputes involve zoning, land boundaries, or infrastructure.
Be strategic in choosing dispute resolution: If the contract contains an arbitration clause, attempt negotiation first.
Track the statute of limitations: Don’t miss the 3-year window for claims related to land transfer contracts.
Engage experienced legal counsel: Complex projects with zoning or land issues require experts in real estate, investment, and litigation.
5. Conclusion
Disputes over real estate project transfer contracts are legally intricate and span multiple domains: investment, land law, zoning, and civil contracts. To navigate them effectively, understand the latest legal conditions (Real Estate Business Law 2023 & Decree 96/2024), choose the right dispute resolution path, gather solid evidence, and act within legal time limits.
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