Vietnam's strongly pro-landlord rental market
Rents are paid well in advance, interests are charged for late payments, and a 3-day notice is enough to evict a non-paying tenant.
Q: Can landlord and tenant freely agree rents in Vietnam?
A: The rent can be freely negotiated by both parties. The rent is usually fixed for the duration of the lease term, typically 1 to 2 years.
Security deposits are not yet commonly required for rental of houses, but are gaining in popularity. Most contracts specify the exact amount of the security deposit.
The first rental payment can vary between 3 to 12 months, depending upon the size or location of the property. Hence, for a one year lease it is possible that the tenant will pay all the rent in advance. Otherwise, rent is paid quarterly in advance.
What rights do landlords and tenants have in Vietnam, especially as to duration of contract, and eviction?
The tenant has the priority to renew the lease for another period, given that a thirty day written notice is provided to the landlord before the expiration of the current term.
A "break clause" can usually be inserted in the contract in case the tenant is transferred to another city or country or if the organizations for which the tenant is working for closes. Two months notice is usually required.
The property cannot be subleased without the prior consent of the landlord.
Depending upon the terms of the contract, a delay in payment of rent could cost the tenant 0.1% of the unpaid rent for every day of delay. If payment is delayed by 15 days, the landlord has the right to terminate the tenancy agreement by sending a 3-day written notice to the tenant. The landlord is entitled not to return the security deposit and to charge the tenant one month rental as penalty.
How effective is the Vietnamese legal system?
If there are disputes or breach of lease by either party, it is typically solved through negotiation and conciliation.
If the matter remains unresolved, the case is brought to the appropriate court for judgment.
The New Land Law of 2003 covers all concerns regarding land use. Several other decrees cover specific provisions for the regulation of landlord and tenant relations, especially for foreign tenants.
Brief History: Recent changes in Vietnamese landlord and tenant law
Legally, foreigners cannot buy buy-to-let properties in Vietnam. However, there are several schemes and ways that people can have virtual ownership of properties. In anticipation of the changes, several contracts stipulate that given a change in law that would allow foreign ownership of properties, right to long term lease would automatically be converted to right of ownership.
Source: World Property Guide