Methods of leasing public housing not serving residential purposes in Vietnam from October 15, 2024

Methods of leasing public housing not serving residential purposes in Vietnam from October 15, 2024 (Internet image)

On August 23, 2024, the Government of Vietnam promulgated Decree 108/2024/ND-CP regulating the management, use, and exploitation of houses and land as public property not used for residential purposes assigned to organizations with the function of managing local business houses for management and exploitation in Vietnam.

Methods of leasing public housing not serving residential purposes in Vietnam from October 15, 2024

Article 10 of Decree 108/2024/ND-CP stipulates the methods of leasing houses as public property not used for residential purposes as follows:

- The leasing of houses (attached with the right to use land) by the house management and business organization (hereinafter referred to as house leasing) is implemented through the auction method, except for the cases stipulated in Clause 2, Article 10 of Decree 108/2024/ND-CP.

- House leasing is implemented through price listing for the following cases:

+ For prioritized entities renting houses; prioritized entities include:

Society organizations with particular characteristics in accordance with the law about associations renting to use as office headquarters in the absence of other headquarters;

Facilities executing private investments in the fields of education - training, vocational teaching, healthcare, culture, sports, and environment within the detailed list of types and meeting scale criteria, standards decided by the Prime Minister of the Government of Vietnam.

+ Leasing houses with the rental amount specified under Clause 1, Article 16 of Decree 108/2024/ND-CP at the time of price determination for leasing under 50 million VND per year.

+ Leasing houses, land during the waiting period for handling as stipulated by law under Point b, Clause 1, Article 1 of Decree 108/2024/ND-CP.

- Based on the Plan for managing and exploiting houses and lands approved by the provincial People's Committee and the conditions for applying each leasing method specified in Clause 1, Clause 2, Article 10 of Decree 108/2024/ND-CP, the house management and business organization is responsible for deciding the leasing method for each specific case.

Regulations on the lease term and extension of the lease term for public housing not serving residential purposes in Vietnam

Article 12 of Decree 108/2024/ND-CP stipulates the lease term and extension of the lease term for houses in Vietnam as follows:

- The maximum lease term for houses is 5 years. In cases of renting houses and lands stipulated in Point b, Clause 1, Article 1 of Decree 108/2024/ND-CP, the maximum lease term for houses is 3 years.

In case of extending the lease term under Clause 2, Article 12 of Decree 108/2024/ND-CP, the extension period shall not exceed the previous contiguous lease term.

- Extension of the lease term for houses

+ Extension of lease term for houses applies in cases where the organization or individual currently renting houses needs to continue renting, and during the lease period, the use of houses and land is for the intended purpose, and all payments and other obligations are made in full and on time as agreed in the contract signed with the house management and business organization. Auction or price listing procedures are not required when extending the lease term.

In case the State needs to use the houses and lands for other purposes or allocates them to agencies, organizations, or units defined in Clause 2, Article 20 of Decree 108/2024/ND-CP for temporary use or handles them according to legal regulations, the lease term shall not be extended.

+ No later than 3 months before the lease contract expires, organizations or individuals wishing to extend must submit a written request to the house management and business organization.

For lease contracts with a term less than 3 months, no later than 1 month before the contract expires, organizations or individuals wishing to extend must submit a written request to the house management and business organization.

+ Within 15 days from the date of receiving the extension request, the house management and business organization must review and decide whether to extend or not extend the lease term and notify the requesting organization or individual.

+ If the lease term is extended, the house management and business organization and the organization or individual granted the extension must sign an addendum to the house lease contract. The lease price is determined based on the house lease price list (including cases where adjustment is necessary if the land price issued by the provincial People's Committee in accordance with the law on land of houses and lands currently leased changes) effective at the time of extension.

More details can be found in Decree 108/2024/ND-CP which takes effect in Vietnam from October 15, 2024.

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