EFFECTIVE DATE OF A CONTRACT FOR THE TRANSFER OF LAND USE RIGHTS

As a general principle, Article 401 of the 2015 Civil Code provides that a contract takes effect from the time of its conclusion, “unless otherwise agreed or otherwise provided by relevant law”. Accordingly, the 2015 Civil Code affirms that where specialized laws provide otherwise with respect to civil relations, such specialized laws shall prevail (Clause 2, Article 4 of the 2015 Civil Code). This demonstrates that the provisions of the 2015 Civil Code merely serve as general law and do not constitute the sole legal basis for determining the validity of real estate transfer contracts. For this type of contract, land law and notarization law impose mandatory requirements as to form. Specifically, under Point a, Clause 3, Article 27 of the 2024 Law on Land, contracts for the transfer of land use rights must be notarized or authenticated in accordance with law. On that basis, Clause 1, Article 6 of the 2024 Law on Notarization clearly provides that: “A notarized document shall be effective from the time when a notary signs and appends the seal of his/her notarial practice organization to it”

Accordingly, the effective date of a real estate transfer contract between the parties cannot be determined by the time of its conclusion under the Civil Code; rather, it is determined as the time when the contract is notarized (or lawfully authenticated). Only from that moment are the parties legally recognized as having the capacity to give rise to and perform rights and obligations toward each other on the basis of the contract.

If one were to apply solely the provisions of the 2015 Civil Code on contractual effectiveness, it would follow that, at the moment a real estate transfer contract becomes effective, the parties may immediately commence the performance of their respective rights and obligations. This would mean that the transferor could hand over land use rights to the transferee without any confirmation or oversight by the State. Such an approach would dilute the State’s role in the unified management of land and would fail to reflect the true legal nature of land use rights and/or assets attached to land as rights established and recognized by the State. Therefore, the effective date of a real estate transfer contract between the parties must be determined as the time of completion of notarization or lawful authentication procedures, rather than the time of contract conclusion under the 2015 Civil Code.