Can construction be carried out on the disputed land?

Nowadays, real estate transactions are longer familiar to citizens, especially with the development of various services that promise high income streams. Many individuals are flocking to purchase land in city centers, urban areas, and tourist zones, with the belief that these locations offer lucrative income opportunities. The saying “Every inch of land is precious” holds true. When a person has intention of purchasing a real estate, the other is planning to jump in immediately, often without thoroughly investigating the origins and status of the land. This has led to an increasing number of cases where individuals accidentally purchase the disputed land. Therefore, questions concerning what should be done in the event of mistakenly purchasing disputed land and whether construction be carried out on the disputedland or not have become topics of significant interest.

What is the Disputed Land?

According to Article 3.24 of the Law on Land 2013, disputes related to land refer to disputes regarding the rights and obligations of land users among two or more parties in a land relationship.

In other words, these disputes can pertain to the right to use the land, assets attached to the land, or disputes related to the land’s usage purpose, boundaries, or obligations arising during land use. In essence, disputed land refers to land in dispute among various entities related to legitimate land use rights over such land.

There are some typical disputes that are frequently encountered:

• Disputes regarding rights and obligations arising from civil transactions related to land use rights, such as disputes regarding contracts on transferring of land use rights, lease of land use right, etc.
• Conflicts related to land use rights: determining land boundaries, or disputes in civil relations such as inheritance, divorce, gifting, securing the performance of obligations, etc.

Can construction be carried out on disputed land ?

Disputed land may either be a dispute without a formal request for the court’s resolution or a dispute where one party has initiated legal proceedings and is currently in the process of being handled by the competent court.

Disputed land without a formal request for the court’s resolution

Vietnamese law currently does not have any specific provisions regarding whether disputed land without a formal request for the court’s resolution can be constructed or not.

In principle, according to Article 89 of the Law on Construction 2014, the land user must obtain a construction permit from the competent authority before commencing construction on land except for cases without a construction permit. These exceptions include detached houses with less than 07 floors belonging to an urban area construction investment project, housing construction investment projects with detailed planning 1/500, grade-IV construction works, detached houses in rural areas with less than 07 floors without urban plans, etc.

Therefore, for cases that require a construction permit, the competent authority will impose specific conditions depending on the type of construction. In which, the application dossier for a construction permit must have all the necessary documents and one of them is documents proving land use rights.[1] Documents proving land use rights according to land law include land use rights certificates, ownership of houses and other assets attached to land. However, land in dispute cannot be granted a land use right certificate according to Clause 2, Article 100 of the Law on Land 2013.

Through the aforementioned regulations, it can be observed that the law does not explicitly specify whether disputed land can be constructed or not. However, in cases where land is in dispute, it will be difficult to apply for a construction permit.

Dispute land in the process of being handled by the competent court

In case of dispute land in the process of being handled by the competent court, according to Article 122 of the Civil Proceedings Code 2015, if a party in the process of resolving the case has grounds demonstrating that the possessor or holder of the property in dispute is conducting the act of dismantling, installing, constructing additional items or other acts for the purpose of changing the status quo of such property, such party may submit a request to the court to apply for preliminary injunctive relief. Specifically, this includes applying measures to prohibit changes to the current state of the disputed property.

Thus, in case of disputed land in the process of being handled by the competent court, the act of constructing on such land is considered an act of changing the current status of the disputed property as stipulated in Article 122 of the Civil Proceedings Code 2015 above. Consequently, litigants in the case can request the court to apply for “preliminary injunctive relief”. If the Court accepts the request, the party engaging in construction on the disputed land must immediately cease such actions upon receiving the decision from the Court. In cases failing to comply with the decision on the enforcement of preliminary injunctive relief, the violator may be subject to a fine ranging from VND10,000,000 to VND20,000,000 VND (for individuals) and VND20,000,000 to VND40,000,000 VND (for organizations) under Clause 4, Article 4 and Point e Clause 5 of Article 64 of Decree No. 82/2020/ND-CP.

In light of above, it can be observed that constructing on disputed land may result in various legal consequences and the court can apply preliminary injunctive relief to request a cessation of construction of assets on land. Additionally, building on disputed land will further complicate the matter, as the resolution of the dispute extends beyond matters of land use rights to encompass disputes related to assets attached to the land after construction.

Typically, the entities engaged in land construction are confident that having legal rights to use or own the land, so they have full authority to build on it. However, if the land is in a disputed status and the parties involved have not yet resolved the matter or obtained an official judgment or decision from the court, they should not proceed with construction on the disputed land. Since the court may apply preliminary injunctive relief to cease construction activities on the land. In the worst-case scenario, the disputed land may belong to another party’s land use rights, and the entity undertaking construction could potentially incur financial losses equivalent to the amount invested in constructing on the land.

The above is an overview of whether construction could be carried out on disputed land or not. If you have difficulties in finding a Law Firm to advise and support in the relevant legal field, please contact us. Phuoc & Partners is a professional consulting firm established in Vietnam and currently has nearly 100 members working in three offices in Ho Chi Minh City, Hanoi and Danang. Phuoc & Partners is also rated as one of the leading consulting firms specialising in business law in Vietnam that has leading practice areas in the legal market such as Labour and Employment, Taxation, Merger and acquisition, Litigation. We are confident in providing customers with optimal and effective service.