New regulations on registration of security transactions

On 1 September 2017, the Government promulgated Decree No. 102/2017/ND-CP (“Decree 102”) replacing Decree No. 83/2010/ND-CP to regulate some matters and provisions to be more appropriate with the promulgated laws and codes relating to the registration of security transactions.

Accordingly, Article 4 of Decree 102 specifically provides for four (04) types of security transactions subject to registration: (i) mortgage of land use rights; (ii) mortgage of property attached to land whose ownership has been stated in the certificate of land use rights, ownership of residential housing and property attached to land; (iii) pledge or mortgage of aircrafts; and (iv) mortgage of seagoing ships.

Decree 102 also specifies the security transactions to register upon request, including: (i) mortgage of other movable property; (ii) mortgage of property attached to land formed in the future; (iii) reservation of ownership in sale and purchase of property which is existing or formed in the future; sale and purchase of aircrafts, seagoing ships; sale and purchase of other movable property with title reservation.

Moreover, in accordance with the provisions of the 2013 Law on Land, Decree 102 regulates that the time of registration of security transactions of land use right will be the time the registration offices record such information in the registration book instead of the time of receiving the dossier as previously regulated. At the same time, in cases where the registration of change due to the addition of collateral without any new security agreement or addition of secured obligation, the registration of addition of collateral or secured obligation will be valid at the time the registration offices record such information in the registration book or update the security interest database. The time of registration for the previously registered property/obligation will remain unchanged.

In addition, Decree 102 also succeeds and provides detailed guidelines for the registration dossiers, procedures for registration of security transactions, circumstances refusing to register security transactions as well as the responsibilities and powers of the competent authorities on registering, providing information on secured transactions. It is worth noting that Decree 102 also stipulates that the registration officers are not allowed to require submission of any documents not regulated by the laws or require the parties to modify the name or content of the security contract.

Decree 102 will take effect as from 15 October 2017.