The State Government issued Decree 21/2021/ND-CP on March 19, 2021, providing for the implementation of the civil code on security for performance of obligations, including collateral, establishment and implementation of measures, security for the performance of obligations and handling of collateral.
- Subjects of application
– Secured party, secured party, secured obligor
– Relevant agencies, organizations and individuals
- New points of Decree 21
Compared with the old regulations, Decree 21 has the following new points:
– Decree 21 has added the concept: “property attached to land”; “Contract of security”; “Certificate”; or “Reasonable time limit”,… are concepts that have not been specifically explained in the old decree.
– Decree 21 clearly stipulates the assets used to perform obligations, supporting businesses and banks in using assets as collateral such as assets created from surface rights , usufruct rights; investment project, assets belonging to the investment project, the investor may use the entire investment project, which is not prohibited by law from transferring, his/her property rights to the exploitation and management of the investment project to protect ensure the performance of obligations; or in the case of an investment in a mortgaged property that causes the value of the collateral to increase, the additional investment value belongs to the collateral;…
– Decree 21 stipulates the establishment and performance of security contracts and measures of security with common property of husband and wife, whereby husband and wife agree to use common property to contribute capital to an organization, economic organization, that party may establish and perform security contracts and security measures related to common property by himself. In case of divorce, the couple who have established security measures or security contracts may continue to perform security contracts or security measures unless otherwise decided by the court.
– Decree 21 stipulates the right of recourse to security assets. The rights of the recipient of the security to the security property in the security measure that have become effective against a third party remain unchanged or do not terminate in the event that the security property is transferred to another person. due to purchase, sale, donation, exchange, transfer or other transfer of ownership. – Regarding the institution for handling security assets, it shows that the provisions of this regulation are applicable to all security measures and not only to the security measures by pledge and mortgage as in other security measures. old regulations
- Concretize and clarify problems in the Civil Code 2015 Decree 21 provides detailed guidance on provisions in the 2015 Civil Code as follows:
– Principles of application of law and agreements on guarantee of performance of obligations. Decree 2021 provides guidance on framework regulations applicable to civil legal relations, so for specific legal relationships such as: land, housing, investment, enterprise, securities, insurance, banking goods, intellectual property, natural resources, fisheries, forestry, maritime, aviation, bankruptcy…
– Allows a security obligation to be performed by more than one measure. If there is no agreement between the parties on the selection of security measures, the secured party shall select a security measure to apply all security measures
. – The handling of security assets as agreed in the security contract without a power of attorney or written consent of the guarantor, this helps credit institutions to speed up the progress of asset handling and better secure and recover bad debts.
– Protection of the third person righteous. Accordingly, if property belonging to an invalid civil transaction is used for mortgage but has been transferred to the rightful mortgagee, the mortgage contract will not be invalidated.
Decree 21/2021/ND-CP takes effect from May 15, 2021
