Can lessors terminate unilaterally the lease agreement when their lessee is in financial difficulty in Vietnam?

Can lessors terminate unilaterally the lease agreement when their lessee is in financial difficulty in Vietnam?

In Article 132 of the 2014 Housing Law, unilateral termination of lease agreement as follows:

1. During the lease term, the lessor may not unilaterally terminate the lease agreement and withdraw the house, except for cases prescribed in Clause 2 of this Article.

2. The lessor is entitled to terminate unilaterally the lease agreement and withdraw the house in one of following cases:

a) The lessor lease out the state-owned houses or social houses ultra vires and not satisfying requirements as prescribed in this Law;

b) The lessee has not paid the rent for 3 months or more without reasonable explanation;

c) The lessee uses the house for improper purposes as agreed in the agreement;

d) The lessee expands, renovates, or demolishes the house under lease agreement without the consent of the homeowner;

dd) The lessee exchanges, lends, sublets the house under lease agreement without consent of the lessor;

e) The lessee still creates disorder or breaches hygiene an environment conditions causing negative effects on activities of the neighborhood although he/she is warned for the third time by the lessor or the chief of neighborhood, the chief of village;

g) Cases prescribed in Clause 2 Article 129 of this Law.

3. The lessee is entitled to terminate unilaterally the lease agreement:

a) The lessor does not repair the house when it is seriously damaged;

b) The lessor increases the rents unreasonably or increases the rents without notification to the lessee;

c) The right to enjoyment of the house is restricted by interests of a third party.

4. If any party unilaterally terminates the lease agreement, the other party must be informed for at least 30 days, unless otherwise agreed; if he/she commits violations mentioned in this Clause and cause damage, he/she must pay compensation as prescribed.

Thus, according to the above provisions in Vietnam, the lessor is entitled to unilaterally terminate the contract with a lessee who does not pay rent for 3 months or more without reasonable explanation. 

Ms. V has not paid your rent for 4 months and using the excuse of financial difficulty, you must find out why Ms. V is in financial difficulty. If she is sick, hospitalized, can't go to work, leading to no money to pay, this case does not unilaterally terminate the contract. If for other reasons that do not affect her health to work, you can unilaterally terminate your agreement in Vietnam.

Are there deposit penalties for unilaterally terminating the agreement when the tenant has financial difficulties in Vietnam?

According to subsection 1, Section I, Resolution 01/2003/NQ-HDTP stipulating disputes over civil contracts with deposits as follows:

Under the provisions in Article 130 of the Civil Code, the agreement on deposit is a civil transaction; deposit, therefore, shall be valid only if it satisfies all conditions specified in Article 131 of the Civil Code and is made in writing (either in a separate document or inscribed in the principal contract). Where deposit-related disputes arise and the involved parties have no otherwise agreement on the handling of deposit, the handling shall be as follows:

a/ Where deposit is paid only to secure the entry into the contract or the performance of the contract or both, the party whose fault causes the non-entry or non-performance or invalidation of the contract shall have to pay a deposit fine under the provisions in Clause 2, Article 363 of the Civil Code.

b/ Where deposit is paid only to secure the entry into the contract, and breaches arise only in the contract performance process and make the contract performance impossible or the contract is detected to be invalid, deposit fines shall not be imposed. The settlement of disputes over contract breaches or the handling of invalid contracts shall follow general procedures.

c/ Where it is agreed by the involved parties or prescribed by law that if deposit is invalid, so is the contract, the contract shall be automatically invalid when the deposit is invalid. The handling of invalid deposits and invalid contracts shall comply with the provisions in Article 146 of the Civil Code.

For example: A and B enter into a house purchase/sale contract. When entering into the contract, they reach an agreement that B (buyer) must hand over to A (seller) a sport car as deposit to secure the entry into and the performance of the house purchase/sale contract on the condition that when the house purchase/sale contract is entered into and performed, such sport car will be included in the house purchase/sale amount and if A fails to receive such car for the reason that the deposit is invalid and, therefore, the contract is also invalid. When the performance of the contract starts, it is discovered that such car belongs to Mr. C (B's father), who refuses to let B include such car in the house purchase amount, which means that the deposit is invalid and in this case, therefore, the house purchase/sale contract is also invalid.

d/ For cases guided at Points a and c of this Section 1, if both involved parties are at fault or if force majeure events or objective obstacles emerge, deposit fines shall not be imposed.

Therefore, in case you terminate the lease contract in Vietnam on the grounds that the lessee has financial difficulties, the agreement of the two parties must be reviewed at the time of signing the contract. If at the conclusion of the contract, both parties do not agree on this, you will be fined a deposit.

Best Regards!