The 2024 Land Law was passed by the 15th National Assembly during the 5th Extraordinary session and took effect on August 1st, 2024 replacing the 2013 Land Law.

The 2024 Land Law introduces several new regulations aimed at comprehensively institutionalizing the Party's guidelines and policies, as well as the National Assembly's resolutions, while also addresses the obstacles identified in the review of the implementation of the 2013 Land Law and codifies regulations that have been proven appropriate in practice, contributing to resolving difficulties and unlocking land resources for national development. Some important new provisions in the 2024 Land Law will impact credit institutions in Vietnam when the law comes into effect, specifically as follows:
Firstly, the 2024 Land Law has expanded the rights of land users who lease land from the State on an annual payment basis. The regulation on the right to sell, mortgage, contribute capital with assets attached to the land, and the right to lease under a land lease contract is one of the key new provisions in the 2024 Land Law. According to Clause 37, Article 3 of the 2024 Land Law, the right to lease under a land lease contract is defined as "the right of the land user formed when the State leases land and collects payment annually." Land users are allowed to transfer the right to lease under a lease contract; those receiving the transfer of the right to lease in such contracts inherit the rights and obligations of the land user according to the Land Law and other relevant legal provisions. In conjunction with the regulations on property rights under the 2015 Civil Code, the right to lease in an annual lease payment contract can be considered a property right, as this leasing right can be valued in monetary terms. Accordingly, the party holding the right in a land lease contract with the State can use the right arising from the lease contract - the right to lease as collateral to secure loan repayment obligations to credit institutions.
In the case where the secured party mortgages assets attached to leased land, the 2024 Land Law's recognition of the lease right as a property of the secured party leads to more comprehensive fulfillment of the secured party's obligations. This ensures the benefits for the secured party (credit institutions) and the State when it can recover the outstanding lease payment if the enforcement authority seizes the lease right (the property right of the party obliged to comply with the law).
Additionally, the 2024 Land Law facilitates businesses using leased land under the annual payment scheme to access loans from credit institutions more easily for production and business expansion needs.
Secondly, the 2024 Land Law introduces new stipulation for issuing certificates of land use rights and ownership of assets attached to the land for households and individuals using land without land use documents, provided they have not violated land laws or fall under cases of unlawful land allocation. Specifically, Article 138 of the 2024 Land Law addresses the issuance of land use certificates for households and individuals who have been using the land stably but lack documents stipulated in Article 137, and are not in violation under Article 139 (concerning illegal land use by households and individuals before July 1, 2014) and Article 140 (concerning the issuance of certificates of land use rights and ownership of assets attached to land for households and individuals currently allocating land without proper authority) with three time frames: (1) before December 18, 1980; (2) between December 18, 1980, and October 15, 1993; (3) between October 15, 1993, and July 1, 2014.
This provision regarding the issuance of land use certificates for undocumented land positively impacts credit institutions. Previously, many land plots without legal documentation could not be used as collateral, limiting landowners' access to credit. With this new regulation, such land plots are legalized and can be used as collateral, allowing credit institutions to expand their lending portfolio and increase their ability to offer credit.
Moreover, thanks to the legal clarity and higher value of documented land, credit institutions can reduce risks and improve the management of secured assets.
Thirdly, the 2024 Land Law removes the land price framework and adopts an annual land price table. According to Clause 3, Article 159 of the 2024 Land Law, provincial-level People's Committees must draft and submit the initial land price table for approval and apply it from January 1, 2026. Annually, the provincial People's Committees are responsible for proposing adjustments, modifications, or supplements to the land price table for application in the following year. In special cases, they may propose mid-year adjustments.
The current Land Law’s stipulation that the land price tables get updated periodically every five years has proven unrealistic and, at times, unfair in compensation cases, leading to land-related disputes. Annual updates will ensure the land price tables aligns with market fluctuations, providing a more accurate reflection of land values. This ensures fairer compensation and transaction terms for landowners.
For credit institutions, this annual update provides a solid legal basis for risk assessment and management when extending credit. Banks can rely on the updated land price tables to determine the value of collateral and make more accurate lending decisions, minimizing credit risks. Furthermore, an updated and detailed land price table accelerates loan processing, improving service quality and better meeting customers' capital needs.
Fourthly, the 2024 Land Law no longer recognizes households as land users. As of August 1st, 2024, households will no longer be allocated land, leased land, recognized for land use rights, or allowed to transfer land use rights.

                    

The 2024 Land Law marks a significant step forward by removing households from the list of land users. This regulation is not only aligned with current conditions but also addresses complex issues and shortcomings that the previous legal framework faced during its implementation. For many years, land use rights of households were considered joint ownership. This meant that each family member had certain rights based on the origin of the asset and their contribution to the establishment of the shared asset. However, determining each member's contribution was a highly complex and difficult process, complicating land transactions and making land management cumbersome and inefficient. In the past, due to historical circumstances, the State at certain times allocated land to households for labor, production, and living. Additionally, during a period when population redistribution was encouraged, some localities allocated residential land to households based on the number of family members. However, these policies are no longer in effect, and households are no longer commonly recognized as land users by the State for land allocation or leasing. Therefore, the provision that households are no longer land users, as outlined in the 2024 Land Law, is necessary.
Moreover, this change positively impacts credit institutions. Previously, determining the land ownership rights of household members was often challenging, leading to internal disputes and complicating the handling of mortgaged assets. By removing households from the list of land users, the law reduces these disputes, creating a clearer legal environment for credit institutions. The new regulations in the 2024 Land Law, which take effect on August 1, 2024, enhance transparency and legal security in managing land use rights. This allows credit institutions to more easily verify and appraise collateral, thus reducing risks and simplifying the credit approval process. With a transparent and efficient legal environment, credit institutions can not only provide more flexible financial services, better meeting market demands, but also seize opportunities for growth, contributing to the sustainable and stable development of the national economy.