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| People line up to register for a land aunction in Hà Nội City. — VNA/VNS Photo |
HÀ NỘI — Starting January 1, 2025, bidders in land and mineral auctions will face a ban ranging from six months to five years if they fail to honour their winning bids.
This new regulation, stipulated by the Revised Auction Law, aims to curb bid bond abandonment and market manipulation in high-value asset auctions.
The Ministry of Justice is drafting a legal proposal to supplement the regulation with specific provisions.
One provision stipulates that the authorities would have 10 days to issue a ban after an auction winner defaults on payment.
The authorities would notify the banned parties within seven working days, and then publish their names on the National Property Auction Portal to ensure public awareness.
Affected individuals and organisations have the right to appeal or initiate legal proceedings if they wish to contest the ban.
Officials believe that the regulation will prevent bidders from manipulating auction outcomes through forfeiture schemes, which can drive up market prices artificially.
The Asset Auction Service Centre in Thái Nguyên Province has expressed its support, stating that the regulation will bolster legal integrity and curb market exploitation.
This sentiment was echoed in recent National Assembly discussions, where concerns were raised about forfeiture-driven inflation in the real estate market.
During the discussions, Deputy Hoàng Văn Cường from Hà Nội proposed requiring bidders to prove their financial capability before participating. This approach, he noted, would deter those with purely speculative or profit-seeking motives.
Deputy Dương Văn Phước from Quảng Nam Province highlighted the role of deposit regulations in addressing forfeiture issues.
Citing a recent auction where the winning bid for a sand mine surged from VNĐ1 billion (US$40,000) to VNĐ370 billion ($14.6 million) with high forfeiture risk, he advocated for progressive deposit increases in each bidding round to ensure that participants carefully consider their financial commitment before bidding. — VNS
