1. Can I buy and sell a mortgaged apartment?
Clause 8, Article 320 of the Civil Code affirms: It is not allowed to sell, replace, exchange or donate mortgaged property, except in the cases specified in Clauses 4 and 5, Article 321 of this Code.
According to this regulation, after mortgaging an apartment at a bank, the mortgagor is not allowed to sell it to another person unless agreed by the bank or as prescribed by law.
If the bank does not agree to buy and sell the apartment that is mortgaged at the bank, the parties can pay off the entire loan to the bank to receive the red book, cancel the mortgage registration and complete the procedures to buy and sell the apartment.
Note: If the bank does not agree, the parties should absolutely not make a notarized document to buy and sell the apartment mortgaged at the bank because it contains many potential risks.
2. What are the procedures for buying and selling mortgaged apartments?
2.1 The bank agrees to allow the parties to buy and sell apartments.
In reality, very few banks agree to allow buyers and sellers to sell when the apartment is still mortgaged at the bank. If they agree, the bank will also require the parties to sign a three-party commitment on the purchase and sale of the property mortgaged at the bank.
Accordingly, the parties will sign an agreement for the buyer to pay the debt on behalf of the seller. After the debt repayment period, the bank will carry out the mortgage release procedure and the buyer will notarize the sales contract and transfer the Red Book to his/her name.
Because according to Article 370 of the Civil Code, the party with the obligation to pay the debt can transfer his obligation to another person if the bank agrees.
However, this case always has many risks for both the bank and the apartment buyer. Therefore, in reality, there are very few cases applying this measure, and the parties will usually follow method 2 below.
2.2 The bank does not agree or the parties agree that the mortgagor pays off the debt and carries out the sale.
In this case, the two parties will sign a deposit contract for the mortgagor to pay off the debt to the bank. The parties will take the Red Book, notify the mortgage release, and carry out the notarization and transfer procedures for the Red Book. Specifically, the steps are as follows:
Step 1: The two parties buying and selling make a deposit contract.
To make a deposit for buying and selling an apartment, the parties may or may not notarize the deposit contract.
Step 2: Release and delete mortgage registration
After receiving the deposit, the buyer immediately carries out the mortgage release procedures to get the original Red Book out of the bank. Upon receiving the Red Book, the parties carry out the mortgage cancellation procedures.
Step 3: Sign the apartment purchase contract
When choosing to notarize an apartment sale and purchase contract, the parties must follow the following procedures:
- Documents to prepare: Red book (original), personal papers.
- Notary location: Notary office or Notary room.
