Civil law in general and land law in particular do not have any provisions regulating or explaining what is a promise to buy or sell land.
In fact, promising to buy and selling land occurs mainly in the following cases:
(1) Land users are not eligible to transfer land use rights due to reasons such as not being granted a Certificate (not having a red book, pink book).
(2) To sell a part of the land plot but need time to carry out the plot separation procedures, so it cannot be transferred immediately according to the provisions of law.
(3) To sell part or all of the land plot but the land use rights are mortgaged at the bank.
(4) The project is not eligible for transfer, not eligible for subdivision and sale of land, but some real estate companies that need to raise capital should invite people to sign contracts such as capital contribution contracts (in the contract there are provisions on promises to buy and sell land).
It can be seen that the above cases are not eligible to carry out procedures for transferring land use rights according to the provisions of law. However, for many different reasons, land users as well as buyers are willing to sign a contract promising to buy and sell land use rights in the future. This contract may or may not include provisions on deposits and fines.
In case of promising to buy, promising to sell but the contract does not record it as a "deposit"
The party that does not perform the contract will not be subject to a deposit (it may be subject to a penalty for breach of contract if the contract is legal and there are regulations on a penalty for breach of contract).
In case of promising to buy, promising to sell but having a "deposit" written
Pursuant to Article 328 of the 2015 Civil Code, if the contract is marked as a "deposit" and the contract is legal and one of the parties refuses to sign or implement the land use rights transfer contract, the deposit will be fined, unless the parties have another agreement.
Note: Only a deposit is considered if the contract agreed upon by the parties states a "deposit" ( Determining whether or not it is a deposit is very important because this is one of the measures to ensure the performance of obligations, so there should be a deposit penalty when not implemented).
