Placing a deposit on land in Vietnam looks simple — pay money, reserve the plot, sign the transfer contract — but a single wrongly worded clause can cost the buyer the entire deposit or force the seller to pay double. Vietnamese law provides no statutory template for deposit agreements; all terms are left to the parties, but the sanctions when one side backs out are fixed by Article 328 of the 2015 Civil Code.
1. What is a deposit — and how does it differ from an “advance payment”?
Under Article 328, Clause 1 of the Civil Code, a deposit is the act of one party (the depositor) delivering to the other party (the deposit recipient) an amount of money, precious metals, gemstones or other valuables within a time limit to secure the conclusion or performance of a contract.
The sharp distinction: an advance payment / first instalment is only an early part of the contract price — it carries no deposit-forfeiture sanction. For the Article 328 sanction to apply, the document must expressly state the sum as a “deposit”. Vague wording such as “first instalment”, “reservation fee” or “good-faith money” can trigger lengthy disputes over the nature of the payment.
2. Forfeiture under Article 328: lose the deposit or pay double?
Article 328, Clause 2 sets two directions:
- The depositor refuses to conclude/perform the contract → forfeits the deposited property;
- The deposit recipient refuses to conclude/perform the contract → must return the deposited property plus an equal-value sum, unless agreed otherwise.
Three key points:
- The law sets no cap on the forfeiture penalty. The penalty level is agreed by the parties (it may be more or less than the default “double”).
- The sanction applies only where a party “refuses” — not automatically where conclusion/performance is blocked by objective obstacles (for example, the plot does not meet transfer conditions through no party’s fault). A deposit agreement can still be signed for a plot not yet eligible for transfer, but the transfer contract will not be executable — so the document needs a dedicated clause for this scenario (refund, partial forfeiture… as agreed).
- Always state the deposit time limit in the document (Article 328, Clause 1 stresses “within a time limit”) — if the deadline passes without the transfer contract being signed, the breaching party bears the agreed sanction.
3. Check before paying: the 5 land-transfer conditions
Before paying any deposit, the buyer should verify that the plot meets the 5 transfer conditions of Article 45, Clause 1 of the Land Law 2024 (No. 31/2024/QH15):
- (a) Has a land use right certificate (red book/pink book);
- (b) The land is not in dispute, or the dispute has been settled;
- (c) The land use right is not distrained and is not subject to judgment-enforcement security measures;
- (d) The land use term has not expired;
- (dd) No temporary emergency measures apply.
Never cite the 2013 Land Law for transfer conditions — it expired on 01/8/2024. Land plots in real-estate projects must additionally meet conditions under the 2023 Law on Real Estate Business and the Housing Law (Article 45, Clause 2).
4. Two completely different scenarios
Scenario 1 — Titled land plot, bought from an individual: a civil transaction under the Civil Code. Secondary buyers purchasing from individuals apply Article 45 of the Land Law on transfer conditions.
Scenario 2 — Project land, bought from the developer: the Law on Real Estate Business 2023 applies:
- 5% deposit cap: Article 23, Clause 5 provides that the developer may collect deposits of no more than 5% of the sale price once the houses or construction works are eligible for market; the deposit agreement must state the sale price clearly. The biggest trap: collecting “reservation fees” or “good-faith money” while the project is not yet eligible for market violates this rule.
- Land subdivision conditions (Article 31): 8 conditions, including the developer sending a written notice to the provincial real-estate business management authority before transfer; the authority replies within 15 days.
- Requirements for the transferring party (Article 32): must be the project developer and have fulfilled land-related financial obligations.
Detailed guidance is in Decree 96/2024/ND-CP (guiding the 2023 Law on Real Estate Business). For project-land deals, check the written confirmation of transfer eligibility from the provincial real-estate business management authority.
5. Notarization: mandatory for the transfer contract, not for the deposit agreement
Article 27, Clause 3 of the Land Law 2024: land use right transfer contracts must be notarized or certified; the exception at point b — where one or more parties are organisations engaged in real-estate business, notarization/certification is done at the parties’ request.
By contrast, a deposit agreement is not legally required to be notarized — but it should be in writing, and the signatures may be notarized to prevent future disputes.
6. Minimum content for a deposit agreement
With no statutory template, a reference draft under the Article 328 framework should at minimum include:
- Full details of both parties (name, ID, address; or enterprise name, tax code, legal representative);
- Plot description (plot number, map sheet, area, location, certificate number);
- Deposit amount and handover method;
- Deadline for signing the transfer contract;
- Handling of the deposit on breach or where the transaction cannot proceed (per Article 328 and the agreement);
- The seller’s warranty of the plot’s legal status against the 5 conditions of Article 45.
FAQs
What is the maximum deposit for project land?
No more than 5% of the sale price — Article 23, Clause 5 of the Law on Real Estate Business 2023, applicable once the houses or construction works are eligible for market; the agreement must state the sale price.
Must a deposit agreement be notarized?
No. Only land use right transfer contracts must be notarized/certified (Article 27, Clause 3 of the Land Law 2024). A written deposit agreement, with optionally notarized signatures, is recommended.
The seller refuses to sign the transfer contract — what happens?
The deposit recipient who refuses to conclude the contract must return the deposit plus an equal sum, unless the agreement sets a different penalty (Article 328, Clause 2).
Can I sign a deposit agreement for land not yet eligible for transfer?
Yes, but the transfer contract will not be executable — the deposit agreement needs a dedicated clause for this scenario.
Cited legal bases
- Civil Code 91/2015/QH13: Article 328 (deposits).
- Land Law 31/2024/QH15: Article 27, Clause 3 (notarization of transfer contracts); Article 45 (transfer conditions).
- Law on Real Estate Business 29/2023/QH15: Article 23, Clause 5 (5% deposit cap); Article 31 (subdivision conditions); Article 32 (transferring party).
- Decree 96/2024/ND-CP guiding the Law on Real Estate Business 2023.
About to place a deposit on land and need the deposit agreement and the land plot’s legal status reviewed before signing? Contact FLAT Law Firm via the Contact page.
The information above is for reference only and does not constitute legal advice.
Transparency note: This article was drafted by FLAT Law Firm’s AI content production system and reviewed by the internal review board (AI Legal Council QA). It has not been reviewed by a human lawyer.