THE ISSUE OF COMMON PROPERTY DISPUTES IN DIVORCE BETWEEN FOREIGNERS AND VIETNAMESE

1. Situation

Mr. Lee is Korean, Ms. Nguyen is Vietnamese. They get married legally. Mr. Lee and Mrs. Nguyen live in a house in Ho Chi Minh City, with the majority of Mr. Lee’s contribution. Since determining his love for marriage, Mr. Lee has repeatedly given money to Mrs. Nguyen to buy a house. At the time of buying the house, Mr. Lee was still a Korean citizen and was not allowed to have his name on the certificate of land use rights, so he let Mrs. Nguyen stand out to buy and sell and put her name on the certificate of land use rights and house ownership and other land – attached assets. Due to the conflict, the marriage could not continue, so Mr. Lee filed a lawsuit to ask the court to divorce and divide the common property with Ms. Nguyen.

In this case, how will the common property issue be resolved when the parties’ real estate purchase and sale documents and certificates are only in Mrs. Nguyen’s name?

Conditions: Disputes are resolved by competent courts in Vietnam and disputed properties in Vietnam.

2. Introduction

When getting a divorce, foreigners will have difficulty disputing common property because of restrictions on their real estate ownership regime and their difficulty grasping Vietnamese legal regulations.

3. Regulations of Vietnamese law on the settlement of common property disputes upon divorce between Vietnamese and foreigners

Marriage relations between Vietnamese and foreigners are understood as marriage and family relations involving foreign elements. Vietnamese law shall respect and protect marriage and family relations with foreign elements in accordance with the provisions of Vietnamese law and international treaties to which the Socialist Republic of Vietnam is a signatory. The provisions of the law on marriage and family of the Socialist Republic of Vietnam are applied to marriage and family relations involving foreign elements. Accordingly, for property disputes upon divorce where the property is real estate in any country, the law of that country shall apply. So, disputes over common property which are real estate and land in Vietnam will be resolved by Vietnamese law, specifically the Law on Marriage and Family 2014.

4. Principles of common property dispute settlement upon divorce

Article 59 of the Law on Marriage and Family 2014 prescribed that the settlement of common property disputes upon divorce must adhere to the following principles:

     a. Respect the agreement of husband and wife:

       Husband and wife are equals in rights and obligations in the creation, possession, use, and disposition of common property. Therefore, Vietnamese law respects the agreement on common property of husband and wife, reflected in both the agreed property regime and the statutory property regime.

  • The agreed property regime: Husband and wife have the right to choose the agreed property regime or the statutory property regime. In case choosing the agreed property regime, the husband and wife shall make a notarized or authenticated written agreement on the property regime of the husband and wife (Article 47 of the Law on Marriage and Family 2014), established before marriage. A written agreement on the disposition of the spouse’s property that satisfies the law will have legal effect and serve as an important legal basis for settling disputes over common property upon divorce.
  • The statutory property regime: In the case of husband and wife’s statutory property regime, the law is oriented towards respecting the agreement of husband and wife on the division of common property. Husband and wife agree to divide common property without asking the court to settle, or during the proceedings, the husband and wife reach an agreement and are recorded in writing by the court. The agreement to self-divide property of husband and wife helps to resolve disputes quickly, effectively and without cost of property appraisal.

     b. Dispute resolution when there is no agreement on division of common property

       In case the husband and wife have no other agreement, the common property will in principle be divided in half. This provision is reasonable with the provisions of the Civil Code 2015 on the common property of husband and wife as consolidated common property and in accordance with the general principle on the property regime of husband and wife under the Law on Marriage and Family: husband and wife are equal in rights and obligations in the creation, possession, use and disposition of common property; does not distinguish between labor in the family and labor with income.

       However, when the court considers the settlement of the common property of husband and wife, it will consider the following factors to ensure property ownership of each party:

  • Circumstances of the family and of the husband and wife;
  • Contribution of husband and wife to the creation, maintenance and development of common property;
  • Protect the legitimate interests of each party in production, business and profession so that the parties have conditions to continue working to generate income;
  • The fault of each party in violating the rights and obligations of husband and wife.

Legal basis: Clause 2, Article 59 of the Law on Marriage and Family 2014; Clause 4, Article 7 of Joint Circular No. 01/2016 TTLT-TANDTC-VKSNDTC-BTP on 6th January, 2016

The party making a request for a greater division of the common property is obliged to demonstrate its contribution to the creation, maintenance, and development of the common property.

5. Solving the posed situation:

     a. Considering the case that real estate assets existed before Mr. Lee and Mrs. Nguyen registered their marriage

       Before requesting the division of property, Mr. Lee must prove that the above-mentioned property is the common property of the husband and wife because Mr. Lee is not named on the certificate. Mr. Lee must provide documents and proofs to prove the origin of assets, such as: Mr. Lee’s income at the time of receiving the transfer of the house, having contributed money to the creation and maintenance of the common property, at the time of receiving the transfer of the house and land. Vietnamese law does not allow Korean nationals to have their name on the land use right certificate, so Mr. Lee let Mrs. Nguyen stand in her name; or any document certifying by Mrs. Nguyen that the house and land are the common property of husband and wife.

       In the process of requesting the court to settle a request for division of common property during the marriage period, the party making the request is obliged to provide documents and evidence to prove it according to Article 91 of the Civil Procedure Code 2015.

     b. Considering the case of real estate assets acquired after Mr. Lee and Mrs. Nguyen registered their marriage

       Property created during the marriage is considered the common property of husband and wife, even though only the wife is named on the certificate of land use rights and house ownership and other land – attached assets.

       The court respects the agreement on the division of assets between the parties. If the parties cannot agree, the property will be divided considering the factors analyzed above to ensure the ownership of the parties. In addition, because of restrictions on the land use rights of foreigners in Vietnam, in the case of disputes over the division of common property upon divorce, foreigners will be given priority to divide the property value.