Legal provisions on disputes over lease contracts for land use rights

Disputes over land use right lease contracts are a common legal issue in real estate transactions. These disputes not only affect the rights and interests of the involved parties but also have an impact on the stability and development of the real estate market. Below, NPLaw invites readers to explore the legal aspects relating to disputes over land use right lease contracts.

I. Current situation of disputes over land use right lease contracts 

At present, disputes involving land use right lease contracts are increasingly common, especially amid rising land prices and growing demand for business and production purposes. Many such disputes arise due to unclear contract terms, lack of notarization, or failure to register the lease with competent authorities, making it difficult to determine the parties’ rights and obligations.

Additionally, in some cases, the lessor does not possess full legal rights to the land but still signs contracts, causing damage to the lessee. Other frequent causes include rent adjustment issues, delayed payments, or disputes related to premature termination of contracts. In reality, most disputes arise from inadequate legal knowledge and failure to comply with proper legal procedures during contract formation, often leading to litigation that is time-consuming, costly, and detrimental to the parties involved.

II. Legal provisions on disputes over land use right lease contracts 

1. What is a dispute over a land use right lease contract?

A dispute over a land use right lease contract refers to conflicts, disagreements, or disputes over the rights and obligations between parties to a lease agreement for land use rights, arising during the contract performance.

2. Methods of resolving disputes over land use right lease contracts

Dispute resolution methods for land use right lease contracts are stipulated in Articles 235 and 236 of the Land Law 2024:

- Mediation: The State encourages the parties to mediate voluntarily or through grassroots-level mediation. If such efforts fail, the parties are required to attempt mediation at the Commune-level People’s Committee before implementing the matter at more high authorities.

- Litigation:

+ If a land use right certificate is available, the dispute shall be resolved by the People’s Court;

+ If no such documents exist, the parties may choose either to file a lawsuit with the Court or submit a request to the competent People’s Committee.

+ If the dispute arises from commercial activities, the parties may resolve it through the Court or the Vietnam Commercial Arbitration Center, provided there is an arbitration agreement in the contract.

Thus, depending on documentation and the nature of the dispute, resolution may involve mediation, litigation in court, commercial arbitration, or administrative resolution through the competent People's Committee.

3. Jurisdiction to resolve disputes over land use right lease contracts 

Pursuant to Article 236 of the Land Law 2024, jurisdiction is determined as follows:

- Where the parties possess legal documents proving land use rights (such as a land use right certificate), the dispute falls under the jurisdiction of the People's Court;

- In the absence of such documents, the parties may choose between filing a lawsuit with the competent Court or submitting a request to the authorized People's Committee;

- For disputes arising from commercial land lease contracts (e.g., between businesses), resolution is subject to the jurisdiction of the Court or Commercial Arbitration, in accordance with civil procedure laws or arbitration regulations.

In summary, depending on the nature of the dispute and available documents, resolution may be handled by the Court, the competent People's Committee, or a Commercial Arbitration body.

III. Questions on disputes over land use right lease contracts

1. What are common issues leading to disputes?

Disputes often arise from the following issues:

- Failure to fulfill payment obligations;

- Use of land for improper purposes;

- Delayed land handover or unsecured use rights;

- Illegally unilateral termination of contract;

- Disputes over assets on the land;

- Unclear or incomplete contract terms.

These issues often stem from parties not fulfilling contractual obligations or from poorly drafted agreements.

2. Can disputes be resolved through mediation? If not, what is the litigation process?

Under Article 235 of the Land Law 2024, such disputes may be resolved via mediation. The State encourages parties to mediate on their own, through grassroots mediation, or commercial mediation in business-related disputes. If unsuccessful, the parties are required to proceed with mediation at the Commune-level People’s Committee.

Per Articles 189, 190, 191, and 203 of the Civil Procedure Code 2015, the litigation process is as follows:

Step 1: Preparing the lawsuit dossier

- Lawsuit petition;

- Record of failed mediation certified by the Commune-level People’s Committee and signed by the parties;

- Identity documents (ID/Passport and household registration book);

- Land lease contract;

- Relevant documents and evidence;

- Index of enclosed documents and evidence.

Step 2: Submitting the lawsuit petition

- Jurisdiction: District-level People's Court where the land is located;

- Submission methods: In person, by post, or via the Court's e-portal (if available).

Step 3: Processing and accepting the dossier 

- The judge reviews the petition and instructs on court fee prepayment;

- Within 7 days, the claimant submits the fee receipt for the case to be accepted.

Step 4: Preparing and executing trial

- Preparation period: 4 months (extendable by 2 months for complex cases);

- Following the first-instance hearing, parties may file an appeal.

3. What documents are required to file a lawsuit?

Per Article 189 of the Civil Procedure Code 2015, the lawsuit dossier must include:

- Lawsuit petition;

- Record of failed mediation certified by the Commune-level People’s Committee and signed by the parties;

- Identity documents (ID/Passport and household registration book);

- Land lease contract;

- Relevant documents and evidence;

- Index of enclosed documents and evidence.

Thus, providing complete and accurate documentation is crucial for the Court to consider and accept the case according to legal regulations.

4. Which authority has jurisdiction to resolve such disputes?

Pursuant to Article 236 of the Land Law 2024:

- With land use right documents: The competent People’s Court resolves the dispute under civil procedure law;

- Without land use right documents: The parties may choose between the Court or submitting a request to the competent People’s Committee;

- In commercial disputes: Resolution may be through the Court or Commercial Arbitration, depending on party agreement and applicable law.

Accordingly, jurisdiction depends on the parties' documentation, the nature of the dispute, and the involved parties.

5. If one party breaches payment obligations, can the other party unilaterally terminate the contract?

Under Article 500 of the Civil Code 2015, land use right lease contracts are considered civil contracts governed by civil law.

Pursuant to Clause 1, Article 428 of the Civil Code 2015, a party may unilaterally terminate the contract if the other party seriously breaches contractual obligations, or based on mutual agreement. However, such termination must comply with legal procedures, including notifying the breaching party. Failure to provide notice causing damage may result in liability for compensation.

Thus, if the lessee violates payment obligations, the lessor has the right to unilaterally terminate the contract in accordance with the law.

6. Is a lease contract without notarization valid in dispute resolution?

According to Point b, Clause 3, Article 27 of the Land Law 2024, notarization or certification is only required if requested by the parties. Therefore, failure to notarize does not invalidate the contract unless there is an agreement to such an effect.

In cases where notarization is legally required but not performed, and at least two-thirds of the contract obligations have been fulfilled, the Court may still recognize the contract’s validity under Clause 2, Article 129 of the Civil Code 2015.

Thus, the Court will assess the nature of the transaction, level of performance, and parties’ agreements when determining the validity of an unnotarized contract.

IV. Legal consulting services for disputes over land use right lease contracts 

The above article is brought to you by NPLaw on the topic of disputes over land use right lease contracts. With an experienced team of lawyers and legal consultants, NPLaw is always ready to accompany, advise, and support clients in resolving legal issues related to such disputes. For further legal assistance, please contact us via: