Guidance on procedures for mortgage cancellation of Land use right certificates at banks for enterprises

In the course of business, if the land use rights or land-attached assets are being mortgaged at the bank, the enterprise will be restricted when transacting these assets. To remove, enterprises need to carry out mortgage deregistration procedures when they meet the statutory conditions.

Thu Duc city land registration office. Source: Maisonoffice

1. Conditions for mortgage cancellation of land use right certificates

Currently, the law does not specify how to cancel the mortgage of the Land Use Right Certificate. However, "mortgage write-off" of collateral is generally understood as the mortgage of terminated assets in the following cases:[1]

1. The obligation secured by  the mortgage has ended.
2. The mortgage of the property is cancelled or replaced by another security.
3. The collateral has been disposed of.
4. By agreement of the parties.

In production and business activities, enterprises have the need to regularly exploit land use rights or land-attached assets (hereinafter collectively referred to as "collateral") through transactions such as transfer, donation or lease,... However, if  these  collaterals have been used to secure previous loan obligations, the above transactions  will be restricted, because according to Article 10 of Decree 99/2022/ND-CP, the mortgage of assets must be registered at the competent authority.  

To be clear, the enterprise had previously mortgaged the land use rights and land-attached assets through the mortgage note in  the land use certificate used for mortgage. The mortgage cancellation  of the land use right certificate is understood as the deletion of mortgage  registration information  for land use rights and land-attached assets recorded in this document.

An enterprise may cancel the mortgageof a land use right certificate in one of the following cases:[2]

1. According to the agreement between the enterprise and the Bank;
2. All obligations secured by the terminated collateral ;
3. The whole or part of the contents of the canceled security/mortgage contract  for which the canceled contents have security interests have been registered;
4. The registered security interest shall be replaced by another security interest as agreed upon between the enterprise and the Bank;
5. The collateral is no longer available due to capital contribution to a commercial legal entity or a non-commercial legal entity that is a social enterprise;
6. Registration of mortgage of property rights arising from the contract for purchase and sale of houses or from contracts for purchase and sale of other land-attached assets that have been transferred to registration of mortgage of houses or mortgages of other land-attached assets specified at Point b, Clause 1,  Point b, Clause 2 and Clause 5, Article 26 of Decree 99/2022/ND-CP.

2. Overview of procedures for de-mortgage of land use permits at banks for enterprises

Note: In fact, when mortgaging collateral at the Bank, the enterprise needs to submit the original Land Use Certificate for the Bank to keep. Therefore, when there is a need to deregister the mortgage, the enterprise needs to work, obtain the consent of the Bank and receive the LRC from the Bank to be able to carry out the above procedures.

3. Order and procedures for mortgage cancellation[10]

Note: In case the registration dossier for the mortgaged property is submitted through the Department of Receiving and Returning Results of Settlement of Administrative Procedures, the Provincial Public Administration Service Center, the People's Committee of the commune, ward or township, the time limit for processing the dossier is counted from the time the Land Registration Office receives the valid registration dossier.