Vietnam has become an attractive destination for many foreigners who come to work, study, or live long-term. Among the first and most important steps in starting life here is renting a house. To ensure that the rental process is safe and lawful, the Vietnamese Housing Law 2023 provides clear regulations on the conditions, rights, and obligations of foreigners when entering into rental agreements. This legal update offers an overview of the key provisions, including the conditions for renting, the circumstances under which a rental contract may end, the rights of either party to unilaterally terminate the contract, as well as special cases where tenants are entitled to continue their lease until the agreed term expires.
1. Conditions for foreigners to enter into house rental transactions
According to Point b, Clause 2, Article 161 of the Housing Law 2023, the conditions for foreigners renting houses in Vietnam are as follows:
- The tenant must satisfy the legal capacity requirements for participation in civil transactions in accordance with civil law;
- A foreign individual must fall under the category of persons entitled to own houses in Vietnam as prescribed by the Housing Law 2023 and is not required to have registered residence at the place where the house subject to the transaction is located.
Point c, Clause 1, Article 17 further provides: “Foreign organizations and individuals entitled to own houses in Vietnam include foreign individuals permitted to enter Vietnam.”
Accordingly, foreigners wishing to rent houses in Vietnam must satisfy the following conditions: possess full civil act capacity to engage in housing transactions, and be legally permitted to enter Vietnam.
2. Cases of termination of house rental contracts
Pursuant to Clause 2, Article 171 of the Housing Law 2023, a house rental contract shall terminate in the following circumstances:
- Upon expiry of the contractual term, in cases where the contract does not specify a term, it shall terminate after 90 days from the date the lessor notifies the lessee of termination.
- Upon mutual agreement of the parties;
- Where the leased house no longer exists;
- Where the lessee, being an individual, dies or is declared missing by a Court, and there is no cohabiting family member;
- Where the lessee, being an organization, is dissolved, bankrupt, or ceases operation;
- Where the leased house is severely damaged, at risk of collapse, or falls within an area subject to land recovery, clearance, or demolition under a competent authority’s decision, or where the house is subject to compulsory purchase or requisition for other purposes. In such cases, the lessor must give written notice to the lessee at least 30 days in advance, unless otherwise agreed by the parties or in cases of force majeure.
3. Unilateral termination of house rental contracts
Under Clause 2, Article 172 of the Housing Law 2023, the lessor has the right to unilaterally terminate the house rental contract and repossess the leased property in the following circumstances:
- Where the leased house belongs to public housing, social housing, housing for the armed forces, or worker housing in industrial zones, but is leased out without proper authority, to ineligible persons, or in contravention of housing law;
- Where the lessee fails to pay rent for three consecutive months or more without a justifiable reason agreed upon in the contract;
- Where the lessee uses the house for purposes other than those stipulated in the contract;
- Where the lessee arbitrarily demolishes, renovates, or alters the house;
- Where the lessee subleases, lends, or transfers the house without the lessor’s consent;
- Where the lessee repeatedly (three times or more) causes serious disturbance of public order or environmental sanitation, adversely affecting surrounding residents, and fails to remedy despite recorded warnings by the lessor or competent local authority;
- Where the lessor undertakes renovation with the lessee’s consent and the remaining lease term is one-third or less of the total contract term, the lessor may adjust the rent as agreed. If no agreement is reached, the lessor may unilaterally terminate the contract but must compensate the lessee in accordance with the law.
Under Clause 3, Article 172 of the Housing Law 2023, the lessee has the right to terminate the rental contract in the following cases unilaterally:
- Where the lessor fails to repair the house when it suffers serious damage;
- Where the lessor unreasonably increases the rent or increases it without providing prior notice in accordance with the contract;
- Where the lessee’s right to use the house is restricted by a third party’s interests.
Note: A party unilaterally terminating a rental contract must provide notice in writing, or in another agreed form, to the other party at least 30 days in advance unless otherwise agreed. Failure to comply and causing damage shall result in compensation liability under the law.
4. Cases where the lessee is entitled to continue renting
- Where the house owner dies during the lease term, the lessee shall be entitled to continue the lease until the agreed-upon term expires. The heir is obliged to perform the lease contract unless otherwise agreed by the parties;
- Where the house owner transfers ownership of the leased house to another person while the lease term remains valid, the lessee shall be entitled to continue the lease until the contract expires, and the new owner shall be obliged to perform the existing lease contract unless otherwise agreed.
- Where the lessee dies during the lease term, cohabiting family members of the lessee shall be entitled to continue the lease until the contract expires, except in cases of official-duty housing, or unless otherwise agreed or provided by law.
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Nguyen Duong Anh Vu