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[Consulted by: Lawyer Bui Thi Nhung]
This article addresses issues related to [2026] When is a land use rights transfer contract invalid?, as explained by Tuyết Nhung Bùi Law Firm, for reference purposes only.
By its nature, the transfer of land use rights is a civil transaction as prescribed in Article 116 of the 2015 Civil Code. Therefore, for a land use rights transfer contract to take legal effect, the transaction must first fully satisfy the conditions for validity of a civil transaction as stipulated in Article 117 of the Civil Code. If these conditions are not met, the land use rights transfer contract may be declared invalid by the Court pursuant to Article 122 of the Civil Code.
[2026] When is a land use rights transfer contract invalid?
First, the contract is invalid due to the parties lacking legal capacity to enter into the transaction.
Pursuant to Point a, Clause 1, Article 117 of the 2015 Civil Code, a civil transaction is valid only when “the parties have civil legal capacity and civil act capacity appropriate to the established civil transaction.” Accordingly, a land use rights transfer contract shall be invalid if the party establishing the contract does not meet the legal requirements prescribed by law.
In addition, such parties must fully satisfy the general conditions for exercising the right to transfer as stipulated in Article 45 of the 2024 Land Law. Specifically, a land user may only transfer land use rights when having a valid Certificate as prescribed by law; the land is free from disputes or any disputes have been resolved by a legally effective decision; the land use rights are not subject to distraint for enforcement of judgments; the land is still within its permitted term of use; and no interim emergency measures are being applied, among other conditions.
Thus, where the party signing the land use rights transfer contract is not eligible under the law or fails to satisfy any of the above conditions, the contract may be declared invalid due to violation of the conditions relating to the subject participating in the transaction. Moreover, for certain special categories of subjects, the law also prescribes additional specific conditions for exercising the right to transfer land use rights.
Second, the contract is invalid due to lack of voluntariness as a result of deception, threat, or coercion.
Under Point b, Clause 1, Article 117 of the 2015 Civil Code, a civil transaction is valid only when “the parties participating in the civil transaction do so completely voluntarily.” Voluntariness is a mandatory condition to ensure the true intent of the parties when establishing the transaction.
Pursuant to Article 127 of the 2015 Civil Code, where a party enters into a civil transaction as a result of deception, threat, or coercion, such party has the right to request the Court to declare the transaction invalid. Specifically:
“Article 127. Invalid civil transactions due to deception, threat, or coercion
Where a party participates in a civil transaction due to deception or due to being threatened or coerced, that party has the right to request the Court to declare the civil transaction invalid.
Deception in a civil transaction is an intentional act by one party or a third party that causes the other party to misunderstand the subject, the nature of the object, or the content of the civil transaction, thereby entering into such transaction.
Threat or coercion in a civil transaction is an intentional act by one party or a third party that forces the other party to carry out the civil transaction in order to avoid harm to their life, health, honor, dignity, reputation, property, or those of their close relatives.”*
Accordingly, a land use rights transfer contract only has legal effect when it is established on the basis of complete voluntariness of the parties. If the conclusion of the contract lacks voluntariness due to deception, threat, or coercion, the contract may be declared invalid by the Court in accordance with the law.
Third, the contract is invalid because its purpose or content violates prohibitions of law or contravenes social ethics.
Pursuant to Article 123 of the 2015 Civil Code, a civil transaction whose purpose or content violates prohibitions of law or contravenes social ethics shall be invalid. Specifically:
“Article 123. Invalid civil transactions due to violation of prohibitions of law or social ethics
A civil transaction whose purpose or content violates prohibitions of law or contravenes social ethics shall be invalid.
Prohibitions of law are legal provisions that do not permit subjects to perform certain acts.
Social ethics are common standards of conduct in social life that are recognized and respected by the community.”*
With respect to land use rights transfer transactions, land law specifically prescribes mandatory conditions that a contract must comply with to be considered lawful. Pursuant to Article 45 of the Land Law, land users may only transfer land use rights when fully satisfying conditions such as: having a land use rights certificate as prescribed by law; the land being free from disputes or disputes having been resolved by legally effective decisions of competent authorities; land use rights not being subject to distraint to secure judgment enforcement; remaining within the land use term; and not being subject to interim emergency measures.
Where the parties fail to ensure one or more of the above conditions but still carry out the transfer of land use rights, the purpose and content of the contract violate prohibitions under land law. In such cases, the land use rights transfer contract may be declared invalid by the Court pursuant to Article 123 of the Civil Code.
Fourth, the contract is invalid due to non-compliance with formal requirements.
Under Clause 1, Article 502 of the 2015 Civil Code, contracts concerning land use rights must be made in writing in a form consistent with the Civil Code, land law, and other relevant legal provisions. Specifically:
“Article 502. Form and procedures for performance of contracts concerning land use rights
1. Contracts concerning land use rights must be made in writing in a form consistent with this Code, land law, and other relevant legal provisions.
…”
In addition, Clause 3, Article 27 of the Land Law provides specific regulations on notarization and certification of contracts and documents relating to the exercise of land users’ rights. Accordingly:
“3. Notarization and certification of contracts and documents on the exercise of land users’ rights shall be carried out as follows:
a) Contracts for transfer, donation, mortgage, or capital contribution using land use rights or land use rights and assets attached to land must be notarized or certified, except for cases specified in Point b of this Clause;
b) Contracts for lease or sublease of land use rights or land use rights and assets attached to land; contracts for exchange of agricultural land use rights; and contracts for transfer or capital contribution using land use rights or land use rights and assets attached to land where one or more parties are real estate business organizations shall be notarized or certified upon request of the parties;
c) Documents on inheritance of land use rights or land use rights and assets attached to land shall be notarized or certified in accordance with civil law;
d) Notarization and certification shall be conducted in accordance with laws on notarization and certification.”*
Accordingly, in principle, a land use rights transfer contract only has legal effect when it is made in writing and duly notarized or certified as required by law. If the parties carry out the transfer of land use rights without complying with these mandatory formal requirements, the contract may be declared invalid due to violation of the formal validity conditions.
However, pursuant to Article 129 of the 2015 Civil Code, where a transaction violates formal requirements but one or more parties have performed at least two-thirds of their obligations under the transaction, the Court may, at the request of the parties, issue a decision recognizing the validity of such transaction. Once recognized, the parties are not required to re-perform notarization or certification procedures.
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