Currently, the number of foreigners coming to Vietnam to work and live is increasing, so the demand for housing also increases. Therefore, how can foreigners limit/avoid the disputes from the lease contract?.
As per our experience, there are some following common disputes when foreigners rent houses in Vietnam for your reference:
- The house is not distrained;
- There is no decision on land revocation, notification of housing clearance or demolishment issued by the competent agency;
- Satisfy requirements pertaining to quality, safety regarding the lessee, electricity system, water supply and drainage, hygiene and environment.
Therefore, to limit some risks, the tenant should request the landlord to provide legal documents showing their house ownership before signing the lease contract. Moreover, in case where the lessor leases the house from the landlord and then sub-lease to the tenant, to avoid any trouble from the landlord, the tenant should request the lessor to show the evidence that the lessor has right to sub-lease the house.
1. No refund of deposit to the tenant upon termination of the lease contract
Under the laws of Vietnam and in practice, the landlord often requests the tenant to deposit an amount to ensure the fulfillment of the tenant's obligations upon termination of the lease contract. Accordingly, when the lease contract is terminated or the tenant fails to fulfill their committed obligations, the landlord will only return this deposit after deducting any compensative amount and/or penalty as well as any payables or in some cases detailed in the lease contract, the deposit may be lost.
2. The landlord is not entitled for lease
Under the Law on Housing of Vietnam, any house regarding transactions in housing sale, lease purchase, lease, mortgage, or capital contribution shall meet the requirements below:
- Certificate of land use right, the ownership of the residential house and other assets associated with the land or legal documents in relation to the ownership/use right of the properties (the "Certificate");
- There is no dispute, complaint, or proceedings for homeownership; the term of homeownership has not expired if the house is under a term contract on housing;
3. The landlord unilaterally increases rental without the prior notice to the tenant.
As practice, the landlord often explains about the rental increase of the surrounding area and cost of living changes and other reasons to propose the rental increase. If the tenant does not agree, the landlord will conduct some actions to make the tenant unhappy to leave. To avoid this trouble, the tenant should discuss with the landlord about the rental before deposit and signing the lease contract and keep it unchanged during the contract term. In case of change of the rental, it should increase by time, such as for the 1st year, the rental is kept unchanged and from 2nd year, the rental will increase 5-10%.
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This alert is for general information only and is not a substitute for legal advice.
