Regulations on compensation for early termination of rental contracts in Vietnam

The new school year has come, when students enter the school, the rental and rental market begins to bustle again. From here, the issues related to the rental contract are very concerned. Specifically, questions like is it possible to unilaterally terminate the tenancy agreement ahead of time? So, how to regulations on compensation for early termination of rental contracts in Vietnam? The following article of Lawyer X will help readers answer questions about these issues, please follow along.

Legal grounds

Civil Code 2015;
Housing Law 2014;

What is a tenancy agreement?

According to regulations, a property lease contract is an agreement between parties whereby the lessor hands over the property to the lessee for use for a period of time, the lessee must pay the rent. House rental contracts, house rental contracts for other purposes shall comply with the provisions of this Code, the Law on Housing and other relevant laws.
Accordingly, a house lease contract is defined as a property lease contract. Accordingly, the lessor delivers the property to the lessee for use for a certain period of time, the lessee must pay the rent.

Is it possible to unilaterally terminate the tenancy agreement ahead of time?

According to the provisions of Article 132 of the Law on Housing 2014, it is only allowed to unilaterally terminate the rental contract in the following cases:

The lessor unilaterally terminates the performance of the contract

The lessor has the right to unilaterally terminate the performance of the house lease contract and withdraw the house being leased in one of the following cases:

The lessor of state-owned housing or social housing leases without authority. Wrong object. Failing to meet the conditions prescribed by this Law;

– The lessee fails to pay the agreed rent for 03 months or more without a valid reason;

– The lessee uses the house for improper purposes as agreed in the contract;

– The lessee arbitrarily demolishes, expands, renovates and demolishes the rented house;

– The lessee converts, lends or sub-leases the rented house without the consent of the lessor;

– The lessee causes disorder and environmental sanitation, and seriously affects the lives of the people around who have been housed by the lessor or the head of the residential group, the head of the village, hamlet, hamlet or village. Phum, squirrel made a record for the third time but still did not fix it

Be in the case specified in Clause 2, Article 129 of this Law.

Lessee unilaterally terminates the performance of the contract

The lessee has the right to unilaterally terminate the performance of the house lease contract when the lessor commits one of the following acts:

– Failure to repair houses when there is severe damage;

– Unreasonable increase in house rent or increase in rent. Without notifying the lessee in advance as agreed;

– When the right to use the house is restricted due to the benefit of a third person.

Do I have to give advance notice to terminate a tenancy agreement?

During the rental period, regardless of the reason and whether for the lessee or the lessor, the notice period specified in Clause 4, Article 132 of the Law on Housing 2014 must still be met:

The party unilaterally terminating the performance of the house lease contract must notify the other party at least 30 days in advance, unless otherwise agreed by the parties; if they violate the provisions of this Clause and cause damage, they must pay compensation in accordance with law.
When you want to terminate the rental contract ahead of time, the following conditions must be met:

– Comply with the agreement of the parties if the parties have an agreement on the termination of the rental contract.

– Notify the other party at least 30 days in advance of the termination of the tenancy agreement. Otherwise, compensation will be required. (when there is damage due to no prior notice).

Because renting is not the case where a deposit is required because this is just an act to ensure the performance of the rental contract.

At the same time, according to Clause 2, Article 328 of the Civil Code 2015, when the rental contract is performed, the deposit will be returned to the tenant or deducted from the rent. However, in reality, in many cases, the deposit is kept by the lessor. Wait until the tenant terminates the tenancy before returning it to the lessee.

Therefore, to determine if the deposit must be paid when terminating the tenancy agreement early. The two parties need to base on the previous agreement if in the rental contract. And it can be determined that in the following cases the deposit may not be returned:

– The two parties do not make a deposit before signing the rental contract.

– The two parties agree not to pay a deposit when either party terminates the rental contract before the due date.

– The deposit has been deducted from the rent the next month when the tenant moves into the rented house.

– Both parties are at fault or there is a force majeure event, an objective obstacle… as prescribed in Resolution 01/2003/NQ-HDTP…

How to compensate for the early termination of the tenancy agreement?

As specified in Clause 4, Article 132 of the Law on Housing, if either party violates the provisions on notice of the time of termination of the rental contract, causing damage, it must compensate.

However, first of all, the parties can agree on the level of compensation, form (money, kind, performance of work), method (one time, many times). If an agreement cannot be reached, the aggrieved party may initiate a lawsuit to the Court to claim compensation.

Regarding the level of compensation for damage, the types of damage can be determined as follows:

– Property damage: The benefits associated with the use and exploitation of the rented house are lost or reduced; expenses to repair damage caused by the rental house being claimed before the due date…

– Damage to health: Actual lost/reduced income due to early repossession. If it cannot be determined, it is calculated according to the average income of workers of the same type…

Related articles

• Procedures for renting houses for foreigners in Vietnam
• Regulations on the issuance of red books for apartment houses in Vietnam
• Procedures for selling apartments to foreigners in Vietnam

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