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

Regulations on lease term and lease term extension of public housing not serving residential purposes in Vietnam (Internet image)

On August 23, 2024, the Government of Vietnam issued Decree 108/2024/ND-CP regulating the management, use, and exploitation of houses and land as public assets not used for residential purposes, assigned to local housing business and management organizations for management and exploitation.

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

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

- The maximum leasing duration for houses is 5 years. In cases of leasing houses and land as stipulated in point b, clause 1, Article 1 of Decree 108/2024/ND-CP, the maximum leasing duration for houses is 3 years.

In case of extension of the leasing duration for houses under clause 2, Article 12 of Decree 108/2024/ND-CP, the extension duration shall not exceed the previous leasing duration.

- Extension of the leasing duration:

+ The extension of the leasing duration for houses applies in cases where organizations or individuals leasing the house wish to continue the lease and during the leasing period, use the house and land for the intended purpose, make full and timely rental payments, and fulfill other obligations as per the contract signed with the housing business and management organization. There is no need to conduct a bidding process or price listing when extending the leasing duration.

In cases where the State needs to use the house or land currently leased for other purposes or allocate it to agencies, organizations, or units specified in clause 2, Article 20 of Decree 108/2024/ND-CP for temporary use or disposal according to legal regulations, the leasing duration will not be extended.

+ At the latest 3 months before the lease contract expires, the organization or individual leasing the house must submit a written request for extension to the housing business and management organization.

For lease contracts with a duration of fewer than 3 months, the written request for extension must be submitted at least 1 month before the lease contract expires.

+ Within 15 days from the date of receiving the extension request from the leasing organization or individual, the housing business and management organization will review and decide on the extension or non-extension of the leasing duration and notify the requesting party.

+ In cases where the leasing duration is extended, the housing business and management organization and the extending parties shall sign an addendum to the lease contract. The rental price will be determined according to the house rental price list (including adjustment cases if the land price issued by the Provincial People's Committee according to the land laws changes) effective at the extension time.

Regulations on management, use, and exploitation cost contents for houses and land when the housing business and management organization is a public service provider

- Operating costs for the management, use, and exploitation of houses and land as per the assigned functions and tasks: Salaries, wages, allowances according to salaries; contributions to social insurance, health insurance, and other contributions according to current regulations; payments for public services: electricity, water, environmental sanitation, and other services; costs for hiring auction services for house leasing; listing costs for house leasing; costs for purchasing tools and instruments for the unit's activities; regular maintenance and repair costs for fixed assets (including rental houses); costs for guarding and preserving assets while waiting for leasing or disposal; costs for hiring valuation enterprises to determine rental prices and other expenses according to legal regulations.

- Costs for purchasing fixed assets, renovating, repairing, constructing new buildings, upgrading, expanding houses, constructions attached to the land, and other expenses according to legal regulations.

- Taxes, fees, charges payable according to legal regulations; other legitimate costs as per legal regulations (if any).

Article 24 of Decree 108/2024/ND-CP)

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

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