1. What are real estate disputes involving foreigners?
Real estate disputes involving foreigners are conflicts and disagreements regarding the rights and obligations between parties (where at least one party is a foreign individual, a foreign organization, or an overseas Vietnamese) concerning house ownership rights, land use rights, or assets attached to land within the territory of Vietnam.
Pursuant to the Land Law 2024, foreign individuals are not eligible for direct land allocation or land lease for residential purposes (except through investment projects) but are entitled to house ownership under the Law on Housing 2023. Consequently, disputes frequently revolve around determining the actual owner in nominee arrangements or the division of assets upon divorce.
2. Common causes of real estate disputes involving foreigners
At DHH Law Firm, we have observed that real estate disputes involving foreigners typically arise from the following common causes:
- Nominee (Name-lending) Arrangements: This is the primary cause. Due to Vietnamese legal restrictions on foreign individuals holding titles on Land Use Right Certificates (“Red Books”) for land plots, many foreigners resort to having relatives or friends hold the title in their stead. This often leads to the nominee arbitrarily transferring or misappropriating the asset.
- Post-divorce Disputes: When a couple (where one party is a foreigner) divorces, partitioning real estate becomes complex due to specific conditions and the limited 50-year ownership term applicable to foreigners.
- Breach of Purchase or Lease Contracts: Disputes regarding payment schedules, construction quality, or the unilateral termination of commercial space lease agreements.
- Foreign-related Inheritance: Conflicts among heirs regarding real estate estates in Vietnam when the decedent was a foreigner or an overseas Vietnamese.
3. Procedures for resolving real estate disputes involving foreigners
In accordance with the Land Law 2024 and the Civil Procedure Code 2015, the process for resolving real estate disputes involving foreigners is executed as follows:
- Step 1: Mandatory Local Mediation For disputes concerning the identity of the land user, pursuant to Article 235 of the Land Law 2024, parties are mandated to conduct mediation procedures at the People’s Committee of the commune where the land is located before filing a lawsuit in Court. If mediation fails, the Committee will issue a minute to serve as a basis for subsequent legal actions.
- Step 2: Filing a Lawsuit at the Competent Court The required dossier includes:
- Petition (standard form).
- Evidence of infringement of rights (contracts, money transfer vouchers, minutes of failed mediation, etc.).
- Legal documents of the parties (passports, visas, documents proving residential address).
- Jurisdiction: The Provincial-level People’s Court where the real estate is located shall resolve foreign-related cases at the first-instance level (Article 37 of the Civil Procedure Code 2015).
- Step 3: Trial and Judgment Enforcement Upon acceptance of the case, the Court will proceed with the public display of evidence and mediation. If unsuccessful, the case will be brought to trial. An enforceable judgment or decision shall serve as the legal basis for the enforcement agency and the land registration office to update and register changes in asset ownership for the prevailing party.
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