Question 86: When resolving a divorce, there are common properties of the spouses that need valuation but the spouses cannot always reach an agreement on the value of the properties and/or the selection of an appraisal property service provider. Does the Court have the right to appoint a third party to provide appraisal property service or is this option only available to the Court if requested by either or both spouses? If the Court is entitled to appoint, upon request, who shall pay this appraisal fee?

376

The valuation of the common properties of the spouses during the divorce is based on the agreement which is firstly and reasonably unified upon by the spouses, based on the market price at the time of agreement and not aiming at avoiding any other obligations with third parties, including obligations to the State.

If the spouses cannot reach an agreement on the value of the common properties of the spouses, they may request the Court to settle the division. The determination of these common properties value shall be conducted as follows:

First, the spouses agree to select an organisation which provides property appraisal service. This organisation will conduct the appraisal and submit the appraisal results to the Court as a basis for settlement. The appraisal expense is agreed upon by the two spouses or in case of a failure to reach an agreement, the Court could divide according to the principle that each spouse must bear the expense of property appraisal corresponding to his or her proportion of the divided properties[2];

In cases where the spouses cannot agree on the designation of a third party who will perform the above common properties appraisal or on the property appraisal provider, property prices, as well as offers different prices, the spouses may request the Court to appoint a property appraisal service provider to conduct the appraisal. The Court, therefore, reserves the right to appoint a third party to provide the property appraisal service in the case of a request by either or both spouses. The expenses of the appraisal, in this case, shall be determined by the Court according to this principle. It means each spouse will bear the portion of the appraisal expense corresponding to the portion of the common properties divided between the spouses;

In cases there are grounds to indicate that the property appraisal provider has violated the appraisal works, or in cases where the appraisal price as agreed upon by the two spouses and the price as determined by the appraisal provider are lower than the market price at the time of appraisal for the purpose of evading obligations with the State or relevant third parties, the Court has the right to appoint a third party to provide the property appraisal service. The appraisal expense in this case shall be determined as follows[4]:

The spouses must bear all property appraisal expenses if the valuation result proves that the Court’s decision on property valuation is grounded. The determination of the expense that each spouse must bear is still based on the fact that each spouse shall bear the portion of the appraisal expense corresponding to the portion of the properties divided for that spouse;

The Court shall pay property valuation expense if the property valuation result proves that the Court’s decision on property valuation is groundless.

Although in the cases of (b) and (c).(i) above, the Court will determine the cost of the appraisal basing on the principle that the evaluation cost corresponds to the portion of the properties divided, the spouses may also reach an agreement and request the Court to recognise such agreement regarding the obligation to bear the appraisal expenses in the Court’s judgements and decisions.

The above is the whole regulation in theory but the application of the law faces many difficulties, such as the regulation in case the property appraisal organisation offers low prices. For special types of properties such as land use right, the Court may base its reasonings on the annual land price framework issued by the provincial People’s Committee. However, the question is that if it is not only land use rights, houses but also other assets such as vehicles, machines, appliances, etc., it is difficult to consider whether the valuation of the property appraisal organisation is reasonable. In case where the spouses hire a property appraisal organisation, it is even more difficult for the Court to determine the price when there is an agreement between the property appraisal organisation and the spouses, issues only arise when there is a dispute or conflict between the spouses [6].

In addition, as prescribed, if the price agreed upon by the spouses or that with the property appraisal organisation is lower than the price of the market where the properties are valued at the time of valuation in order to avoid State or third party obligations, the Court shall issue a decision on the appraisal price. However, understanding the price of the market where the properties are valued at the time of appraisal is another story. The market price is a rather vague concept and it is particularly difficult to determine the price for volatile assets such as land use rights, houses, stocks, etc. Besides, the determination of the appraisal time is also very incorrect, because proceedings for a civil case can go on for a very long time, through many trial stages such as first instance, appellate, cassation and retrial. Thus, the time of appraisal is the time of the first instance or that of each stage of proceedings to match with the market price at the time of trial is a legal issue which is still open[8].


[2] Article 165.2 of the Civil Proceedings Code 2015.

[4] Article 165.3 of the Civil Proceedings Code 2015.

[6] Nguyen Nam Hung, “Some problems about property valuation, asset price appraisal in the Civil Proceedings Code 2015”, Prosecutorial Magazine No. 9/2018, https://tapchitoaan.vn/bai-viet/phap-luat/nhung-bat-cap-ve-dinh-gia-tai-san-tham-dinh-gia-tai-san-trong-blttds-nam-2015.

[8] Nguyen Nam Hung, “Some problems about property valuation, asset price appraisal in the Civil Proceedings Code 2015”, Prosecutorial Magazine No. 9/2018, https://tapchitoaan.vn/bai-viet/phap-luat/nhung-bat-cap-ve-dinh-gia-tai-san-tham-dinh-gia-tai-san-trong-blttds-nam-2015

If you would like more information on how we can assist you with divorce issues, please contact us at: +84 (28) 36223522 or email us at info@phuoc-partner.com