15/07/2022 09:40

Is it possible to claim compensation for damaged rental property in Vietnam?

Is it possible to claim compensation for damaged rental property in Vietnam?

Currently, the rental of properties is quite popular in Vietnam, the properties for rent are also quite diverse due to the nature of each industry, each job is different. However, surely not all tenants understand the rights and obligations of the parties as well as the responsibilities arising in relation to the property you rent, such as the responsibility to compensate for damage when the property is damaged.

Therefore, when does the liability arise for property damage and how is the compensation principle, please refer to the following article.

Judgment 591/2020/DS-PT dated June 24, 2020 on the dispute over the factory lease contract and claim for property damage

“In June 2014, Ms. L signed a factory lease contract with Mr. Poon Chiu L2 for 65,000,000/month. Mr. L2 makes a deposit of 6 months in the amount of 390,000,000. The content of the contract shows that the leased property includes: 01 house for office use, 01 factory, 33 guest rooms, 320KVA high voltage battery, and the rest of the land area has been used stably. to build factories, warehouses and auxiliary facilities to serve production and business. These properties were built and invested on a land area of ​​4540m2 in parcel 1485, 1486 map sheet No. 6, commune H, district C in the name of Mrs. Ho Thi D.

On June 6, 2016, Ms. L and Mr. L2 made a certificate confirming that Mr. L2 returned the motels and adjusted the rent to 60,000,000/month, paid every month.

On March 4, 2017, Mr. L2 terminated the contract, but Ms. L prevented the company's machinery assets from being moved out of the factory. On October 23, 2018, the People's Court of District C issued a Decision to apply temporary emergency measures to prohibit Ms. L from obstructing Company A from transporting goods, machinery and equipment out of the factory. Immediately after that, Mr. L2 and Company A moved all assets, machinery, and equipment elsewhere.

Ms. L filed a lawsuit asking: Mr. L2 and Company A must pay her 02 months' house rent of 120,000,000 VND; compensation for damage 02 items including a damaged factory building with a value of 1,597,000,000 VND and damage due to being unable to rent a house from March 2017 to January 2019 is 1,380,000,000 VND, a total of 2,977,000,000 VND”.

First, consider the claim for damage caused by the demolition of the factory leading to the following damage:

When both parties entered into the contract in June 2014, the content of the contract clearly stated which properties were to be leased, Mr. L2 was also handed over and put into use. Until the contract was terminated, the owner of The factory is no longer in its original state.

Ms. L's side has asked the Company to appraise damaged properties including canteen, security house, factory 2, wall of office area. All of the above damage is said to have occurred during Mr. L2's lease of her factory. Total value of damage is 1,597,000,000 VND.

The 2015 Civil Code of Vietnam stipulates the grounds for arising and the principles of compensation for damage as follows:

Article 584. Grounds giving rise to liability to compensate for damage

1. A person intentionally or unintentionally harming the life, health, honor, dignity, reputation, property, or other legal rights or interests of a person, must compensate for such damage, unless otherwise prescribed in this Code or relevant laws.

2. The person who causes damage shall be discharged from liability for compensation in case where the damage incurs due to force majeure events or at entire fault of the aggrieved person, unless otherwise agreed or otherwise prescribed by law.

3. If a property causes damage, its owner or possessor must compensate for the damage, except for the damage prescribed in Clause 2 of this Article.

Article 585. Principles of compensation for damage

1. Actual damage must be compensated in full and promptly. Unless otherwise provided by law, parties may agree on the amount of compensation; on the form of compensation, which may be money, in kind or the performance of an act; lump sum payment or payment in instalments; and on the method of compensation.

2. The compensation payable by a person having caused damage may be reduced if such damage was caused unintentionally and is very large in comparison to the financial positions of such person.

3. If the amount of compensation determined becomes unrealistic, the aggrieved person, or the person having caused damage, has the right to request a court or another competent authority to change the amount of compensation.

4. If the aggrieved party is partly his/her fault for causing the damage, that part of damage shall not be compensated.

5. The party having rights and interests infringed shall not be compensated if such damage incurs due to his/her failure to adopt necessary measures to prevent the damage.

Therefore, Ms. L's claim for property damage is grounded and appropriate. Because, Company A has caused damage to the factory, in principle, all damage will be compensated and the parties will agree with each other.

Second, about the claim for damages due to the inability to lease the factory from March 2017 to January 2019.

When unable to continue business due to not being licensed and forced to relocate. For objective reasons, Mr. L2 has sent a written notice of contract termination to Ms. L since March 15, 2017, and has been signed by her. But because Ms. L repeatedly prevented her, it led to a delay in relocation.

Therefore, Ms. L's claim that Mr. L2 is responsible for compensating for the loss of income from factory rental from March 2017 to January 2019 in the amount of VND1,380,000,000 is unfounded.

Third, for 02 months the house rent is 120,000,000 VND, Mr. L2 also admitted. In addition, when signing the contract, Mr. L2 made a deposit of VND 390,000,000 6 months in advance, which was also agreed upon by both parties.

The People's Court of Ho Chi Minh City accepted part of Ms. L's appeal, forcing Mr. L2 and Company A to jointly be responsible for compensating the damaged factory, and Mr. L2 was obliged to pay 02 The house rent and Ms. L's return of 06 months' deposit to Mr. L2's side are completely reasonable and well-grounded.

Damages arising in the process of renting property are unavoidable. However, when the parties enter into the contract, it is necessary to clearly discuss the rights and obligations of the two parties, as well as hand over the current status of the leased property. The civil law already has provisions related to compensation for property damage, but besides that, the lessor or the lessee also needs to prove where the actual damage was caused and when it occurred. In this way, the rights and interests of the parties will be guaranteed.

Anh Dao

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