Co-ownership of land use rights and residential property is common in Vietnam, particularly where property is acquired through inheritance, joint gifts, or jointly accumulated by spouses during marriage. In practice, however, disputes frequently arise when one co-owner attempts to sell part or all of the property without obtaining the consent of the remaining co-owners.
Can a co-owner of real property unilaterally sell the property? Under what circumstances may a co-owner transfer his or her ownership interest? If a transfer is made without the consent of the other co-owners, will the transaction be declared invalid?
This article analyzes these issues under the current provisions of Vietnamese law.
1. What Is Co-ownership of Real Property?
Under the Civil Code 2015, common ownership (co-ownership) exists where property is owned jointly by two or more persons.
With respect to houses and land use rights, co-ownership commonly arises in the following circumstances:
- Spouses jointly named on the Certificate of Land Use Rights and Ownership of Residential Property;
- Siblings jointly inheriting land use rights;
- Multiple individuals jointly contributing funds to purchase real property;
- Several individuals jointly receiving land use rights as a gift.
Vietnamese law recognizes two forms of common ownership:
- Ownership in shares, where each co-owner’s ownership interest is specifically determined; and
- Ownership in common, where the individual ownership interests are not separately identified and all co-owners jointly own the property as a whole.
Determining the applicable form of co-ownership is essential in assessing whether a co-owner may lawfully dispose of the property.
2. May a Co-owner Unilaterally Sell the Entire Property?
Pursuant to Article 218 of the Civil Code 2015, the disposal of property held in common must be agreed upon by all co-owners unless otherwise provided by law.
Accordingly, a co-owner may not unilaterally sell the entire property without the consent of the other co-owners.
For example:
Three siblings are jointly registered as owners of a parcel of land.
One sibling independently signs a sale and purchase agreement transferring the entire parcel to a third party without the consent of the other two siblings.
In such circumstances, the transaction may be declared invalid by the Court to the extent that it purports to dispose of ownership interests belonging to the non-consenting co-owners.
3. May a Co-owner Transfer His or Her Own Ownership Interest?
Yes, provided that the statutory requirements are satisfied.
Where the property is held under ownership in shares, each co-owner is entitled to transfer his or her ownership interest.
However, before transferring that interest to a third party, the transferring co-owner must respect the statutory pre-emptive right of purchase enjoyed by the remaining co-owners.
Accordingly:
- The transferring co-owner must notify the other co-owners of the intended sale;
- The notification must specify the proposed purchase price and the transfer conditions;
- The remaining co-owners have the right to purchase the ownership interest within the period prescribed by law.
Only if the remaining co-owners decline to exercise their preferential purchase right may the ownership interest be transferred to a third party.
4. What Happens If the Other Co-owners Are Not Notified?
Failure to notify the other co-owners is a common source of disputes.
Where a co-owner transfers his or her ownership interest to a third party without respecting the statutory preferential purchase rights of the remaining co-owners:
- The remaining co-owners may request the Court to transfer the purchaser’s rights and obligations to them, provided the statutory conditions are satisfied; or
- Disputes concerning the validity and enforcement of the transfer agreement may arise.
Accordingly, compliance with the notification requirement is an important procedural safeguard.
5. May One Spouse Unilaterally Sell Marital Property?
This is one of the most frequently raised questions in practice.
Pursuant to the Law on Marriage and Family 2014, where a house or land constitutes the common property of spouses, any transfer must be agreed upon by both spouses.
Accordingly:
- A husband may not unilaterally sell jointly owned residential property without the wife’s consent.
- Likewise, a wife may not independently transfer jointly owned property without the husband’s consent.
Where one spouse executes a sale agreement without the consent of the other, the transaction may be declared invalid unless an exception provided by law applies.
6. May Co-owned Property Be Sold Before It Has Been Partitioned?
Many inherited properties remain jointly owned by the heirs before the inheritance is formally divided.
In such cases:
- No individual heir may unilaterally sell the entire property; and
- Any transfer of the property requires the unanimous agreement of all co-owners.
If an heir wishes to transfer only his or her ownership interest, that interest should first be clearly identified. Where the ownership shares have not yet been determined, a partition of the common property should generally be completed before any transfer is made.
7. Is an Unauthorized Transfer of Co-owned Property Invalid?
Not every unauthorized transfer is automatically void.
When determining the validity of a transaction, the Court will typically consider several factors, including:
- Whether the transferor lawfully owned the relevant ownership interest;
- Whether the property was held under ownership in shares or ownership in common;
- Whether the consent of the other co-owners was obtained where required;
- Whether the purchaser acted in good faith;
- The scope of the transferor’s legal authority to dispose of the property.
Where the transfer exceeds the transferor’s lawful authority, the portion of the transaction violating the law may be declared invalid. In such circumstances, the parties may be required to restore to each other the property or benefits received in accordance with the Civil Code.
8. What Is the Proper Procedure for Selling Co-owned Property?
To minimize legal risks and avoid disputes, co-owners should generally follow these steps:
Step 1: Determine the applicable form of common ownership.
Step 2: Identify the ownership interest of each co-owner.
Step 3: Notify the remaining co-owners if an ownership interest is to be transferred.
Step 4: Execute a written agreement among all co-owners if the entire property is to be sold.
Step 5: Execute the transfer agreement before a licensed notarial practice organization.
Step 6: Complete the land registration procedures to record changes in land use rights in accordance with the land legislation.
9. Frequently Asked Questions
May a Co-owner Sell His or Her Share of the Property?
Yes. Where the property is held under ownership in shares, each co-owner may transfer his or her ownership interest, provided that the preferential purchase rights of the remaining co-owners under the Civil Code are respected.
Is a Sale Agreement Valid If Only One Co-owner Signs It?
Not necessarily.
Where the transferor lacks legal authority to dispose of the entire property or fails to obtain the consent of the other co-owners as required by law, the agreement may be declared wholly or partially invalid.
Must All Co-owners Sign the Sale Agreement?
Where the transaction involves the transfer of the entire co-owned property, all co-owners are generally required to execute the transfer agreement personally or authorize a lawful representative to sign on their behalf through a valid power of attorney.
10. Conclusion
In response to the question “Can a co-owner of real property unilaterally sell the property?”, the answer is generally no where the transaction concerns the disposal of the entire jointly owned property without the consent of the remaining co-owners.
Where the property is held under ownership in shares, a co-owner may transfer his or her ownership interest, provided that the statutory pre-emptive rights of the other co-owners are respected in accordance with the Civil Code 2015.
To minimize legal risks and avoid protracted disputes, co-owners should clearly identify the applicable form of ownership, determine the scope of each owner’s disposal rights, and comply with the statutory transfer procedures before entering into any transaction. Seeking legal advice from a qualified lawyer or legal professional is also advisable to ensure that the rights and legitimate interests of all parties are adequately protected.
CONTACT LEGAL CONSULTANT:
TLA Law is a leading law firm with a team of highly experienced lawyers specializing in criminal, civil, corporate, marriage and family law, and more. We are committed to providing comprehensive legal support and answering all your legal questions. If you have any further questions, please do not hesitate to contact us.
1. Lawyer Vu Thi Phuong Thanh, Ha Noi Bar Association
Email: vtpthanh@tlalaw.vn
2. Lawyer Tran My Le, Ha Noi Bar Association
Email: tmle@tlalaw.vn
Nguyen Thuy Duong