What is mortgage?
“Pledge of property is when one party (called the pledgor) delivers property under his/her ownership to the other party (called the pledgee) to secure the performance of an obligation”, according to Article 309 of the 2015 Civil Code.
Red book is not an asset
The 2015 Civil Code clearly stipulates that the mortgaged object must be property, and the mortgagor must deliver his property to the mortgagee.
However, according to the provisions of Clause 21, Article 3 of the 2024 Land Law, the red book is not an asset but a legal document for the State to confirm land use rights and house ownership rights:
"Certificate of land use rights and ownership of assets attached to land is a legal document for the State to confirm the legal land use rights and ownership of assets attached to land of the person with land use rights and ownership of assets attached to land.
Property attached to land is granted a Certificate of land use rights and ownership of property attached to land, including houses and construction works attached to land according to the provisions of law.
Certificates of land use rights, certificates of land use rights, house ownership rights and other assets attached to land as prescribed by relevant laws implemented in accordance with the provisions of this Law have the same legal value as Certificates of land use rights and ownership rights of assets attached to land in this Law".
People are not allowed to mortgage their houses and land.
According to Clause 1, Article 27 of the 2024 Land Law, land users are entitled to exercise the following rights: convert, transfer, lease, sublease, inherit, donate land use rights; mortgage, contribute capital using land use rights according to the provisions of this Law and other relevant laws.
Thus, people can only mortgage land and houses, not pledge land and houses.
