In Vietnam’s booming real estate market, delayed payments and unpaid debts have become an all-too-common challenge. Whether you’re a developer waiting on buyer installments, a contractor left with unpaid invoices, or an investor whose partner has breached a joint venture agreement, unresolved financial obligations can create significant strain.

The stakes are high-transactions often involve large sums, complex contracts, and cross-border parties. Unfortunately, many creditors wait too long or follow the wrong procedures, making recovery more difficult. That’s why understanding Vietnam’s legal tools and taking early action is key. This guide walks you through the legal options and enforcement strategies to recover real estate-related debts effectively in Vietnam.

Common Real Estate Debt Disputes in Vietnam

Debt-related disputes in Vietnam’s real estate sector are diverse, reflecting the complexity of modern property development and investment. They frequently involve:

• Off-plan property sales: Buyers failing to pay scheduled installments, breaching payment terms, or requesting cancellation after deposit due to market changes.
• Contractor payments: Developers withholding payment from contractors or subcontractors after project milestones are completed, often due to cash flow issues.
• Investor disputes: Joint venture partners disagreeing on capital contributions, profit allocation, or exit terms.
• Handover issues: Buyers seeking refunds or compensation due to missed handover deadlines, failure to transfer land-use rights, or lack of compliance certificates.

In many cases, the root cause is unclear contractual terms or unrealistic timelines, which can escalate into legal disputes without a clear path to resolution.

Legal Grounds for Debt Recovery in Real Estate Transactions

Debt claims in real estate are primarily contract-based and supported by the Civil Code, Law on Real Estate Business, and Commercial Law. These provide a framework for determining obligations, calculating damages, and enforcing performance.

Typical legal bases include:

• Breach of contract: Where a party fails to deliver payment, property, or services per agreed terms.
• Violation of construction milestones: Delays or substandard delivery contrary to schedule or quality standards.
• Failure to transfer land-use rights: Especially in projects involving split legal and financial responsibilities.
• Withdrawal without cause: Refusal to perform contractual obligations without justification.

Contracts often contain liquidated damages clauses, penalty interest, and dispute resolution provisions. Courts typically uphold these if clearly written and not contrary to public policy.

Pre-Litigation Strategies: Negotiation, Mediation, and Demand Letters

Taking legal action isn’t always the first or best step. In many real estate disputes, it’s possible to resolve the issue without going to court. The first step is usually a demand letter a written notice that clearly explains the debt, references the legal basis (such as a breached contract), and gives the debtor a chance to pay or respond within a set deadline.

If the demand letter doesn’t resolve the matter, mediation is another useful option. This involves both parties sitting down often with a neutral third party to try to reach a mutual agreement. Some contracts even require mediation before filing a lawsuit.

Negotiation is often ongoing throughout this process. Creditors may offer payment plans or alternative arrangements to recover at least part of the debt. These efforts should always be documented in writing. Even if they don’t succeed, they show the court that you made a serious attempt to resolve the dispute amicably.

Court Litigation: Filing a Lawsuit for Real Estate Debts

When amicable efforts fail, litigation offers a formal path to resolution. Depending on the nature of the parties and dispute, the case may be heard in a Civil Court or Economic Court.

Essentials for filing:

• A valid written contract and proof of performance or payment default.
• Supporting documents such as construction acceptance minutes, handover records, or invoice logs.
• Evidence of pre-litigation steps (demand letters, correspondence).

Defendants may use tactics like filing counterclaims, disputing contract interpretation, or claiming financial hardship. Legal representation with real estate experience is critical to navigate these challenges effectively and avoid delays or procedural dismissals.

Enforcing Court Judgments in Real Estate Disputes

Winning a case is only half the battle, enforcement is often the hardest part. Creditors may:

• Seize real property owned by the debtor (if registered)
• Freeze bank accounts or secure other assets pending enforcement
• Request asset valuation and court-ordered auction for sale

Enforcement is handled by civil judgment enforcement authorities. Accurate asset information, such as property location, title documents, and ownership data, is essential.

Special Considerations in Projects Involving Foreign Investors

Foreign investors in Vietnam’s real estate market must manage not only contract enforcement, but also navigate regulatory restrictions. Vietnam prohibits direct land ownership by foreign individuals and entities, requiring them to partner with local firms or lease land via project companies. This creates additional layers of documentation and legal structuring.

Enforcing foreign judgments in Vietnam or Vietnamese judgments overseas may require mutual recognition agreements or reliance on treaties like the New York Convention. These procedures can be time-consuming and may require relitigating aspects of the case.

In joint ventures, disputes frequently arise from unbalanced capital contributions, differing risk appetites, or ambiguous exit mechanisms. Structuring agreements with enforceable arbitration clauses, clear capital schedules, and security for performance can help mitigate cross-border enforcement difficulties.

When Criminal Charges Apply in Real Estate-Related Debts

While many real estate debt disputes are handled through civil court, there are situations where criminal law comes into play. If a party intentionally deceives others to gain money or property, it may amount to fraud under Vietnam’s Penal Code.

Examples include:

• Selling the same property to multiple buyers, knowing it can’t be delivered to all of them.
• Collecting deposits for a project that lacks construction permits or land-use rights.
• Falsifying ownership documents or making false promises about the project’s legal status.

These acts can lead to charges under Article 174 (Fraud) or Article 175 (Abuse of Trust) and may result in imprisonment and restitution orders. Victims can file complaints with the police or Public Security Department, and in many cases, pursue civil recovery alongside the criminal investigation.

Debt Recovery from Delayed or Abandoned Real Estate Projects

Delays in high-rise or residential developments can cause serious financial harm, especially when buyers or investors have already paid significant amounts. In some cases, projects are left unfinished or developers disappear entirely, leaving creditors with limited options.

In these situations, creditors may have the right to:

• Terminate the contract and request a refund of deposits or partial payments.
• Demand compensation for losses caused by the delay, especially if the contract includes a penalty clause.
• File claims with project guarantee funds or banks providing construction guarantees, if applicable.

To strengthen their position, buyers should check the project’s legal status before signing and ensure that key protections such as escrow arrangements or clear construction timelines—are included in the contract.

Related article: Case Study: The Green Town Apartment Project Dispute

Recovering Debt from Real Estate Agents or Brokers

Real estate agents and brokers often serve as the key link between buyers and sellers. However, when transactions go wrong due to the agent’s actions—or inaction—it can lead to serious financial loss.

Some common issues include brokers:

• Charging or receiving commission fees even when a transaction falls through.
• Failing to return deposits they’ve collected on behalf of a seller or buyer.
• Misrepresenting the ownership, zoning, or condition of a property.

Buyers and sellers can pursue legal action against brokers through the civil courts, and also report misconduct to the Department of Construction. In more serious cases, such as fraud or unauthorized transactions, the agent may also face administrative sanctions or criminal charges. It’s essential to work with licensed brokers and have clear, written agreements in all transactions.

Secured vs. Unsecured Real Estate Debts: What Matters for Enforcement

In Vietnam, the nature of a debt secured or unsecured significantly affects recovery prospects. A secured debt is backed by collateral such as land-use rights, buildings, or project assets. If the debtor defaults, the creditor can request the court to seize and auction these assets. Priority in liquidation is granted to secured creditors.

Unsecured debts, however, offer fewer protections. These creditors must go through general enforcement procedures and share recovery with other claimants. If the debtor has no assets or is already involved in other enforcement cases, chances of successful recovery decrease substantially.

To safeguard claims, creditors should ensure that mortgages, liens, or pledges are properly registered with Vietnam’s land or asset registries. Failing to register security can result in loss of priority or complete unenforceability in a contested dispute.

Legal Recovery Is Possible With the Right Strategy

Debt recovery in Vietnam’s real estate sector can be legally complex and emotionally charged. However, with the right documentation, clear contracts, and strategic use of Vietnam’s legal tools, creditors can recover funds effectively.

Whether through civil litigation, administrative enforcement, or criminal complaint, success depends on taking swift, well-advised action.

Le & Tran is recognized as a leader in Vietnam’s legal landscape, earning praise from top legal publications like Chambers, Legal500, and Benchmark Litigation, as well as being highly recommended by AmCham Vietnam and the US Consulate. Our top-ranked Litigation Lawyers are known for delivering practical and strategic solutions that protect your rights and interests. Whether pursuing unpaid property debts or enforcing court decisions, we provide trusted support at every stage of the process. For professional support in real estate debt recovery in Vietnam, contact us at info@letranlaw.com.