What is a property lease? Regulations on contracts for lease of property in Vietnam

What is a property lease? Regulations on contracts for lease of property in Vietnam (Internet image)

1. What are contracts for lease of property?

According to Article 472 of the Civil Code 2015, contract for lease of property means an agreement between parties whereby a lessor delivers property to a lessee for use during a fixed term and the lessee is required to pay rent.

Lease contracts of houses or lease contracts of houses for other purposes shall comply with the Civil Code 2015, the Law on Housing and relevant laws.

2. Regulations on Contracts for lease of property in Vietnam

Contracts for lease of property in Vietnam under Articles 473 to 482 of the Civil Code 2015 is as follows:

* Rent

- Rent for a lease of property shall be as agreed by the parties or determined by a third party at the request of the parties, unless otherwise prescribed by law.

- Where parties reach no agreement or reach an agreement with unclear terms about the rent, it shall be determined according to the market price at the time and place of entering into the contract.

* Lease term

- The term of a lease shall be as agreed by the parties. If there is no agreement, the term of the lease shall be determined according to the purpose of the lease.

- Where parties have not agreed on the term of a lease or where the term of a lease is not able to be determined according to the purpose of the lease, the lease shall terminate when the lessee has achieved the purpose of the lease.

* Sub-leases

A lessee may sub-lease leased property with the consent of the lessor.

* Delivery of leased property

- A lessor must deliver property to the lessee strictly in accordance with the agreed quantity, quality, type and condition and at the agreed place and time, and must provide information necessary for use of the property.

- Where a lessor is late in delivering property, the lessee may extend the time for the delivery of the property or may cancel the contract and demand compensation for damage. If the leased property is not of the quality agreed, the lessee has the right to require the lessor to repair the property or reduce the rent, or to cancel the contract and demand compensation for damage.

* Obligation to assure utility value of leased property

- A lessor must assure that leased property is in the condition agreed and is suitable for the purpose of the lease contract for the entire term of the lease. The lessor must repair any damage to or defect in the leased property, with the exception of minor damage which the lessee must repair in accordance with customary practice.

- Where the utility value of leased property decreases otherwise than due to the fault of the lessor, the lessee has the right to demand the lessor:

+ Repair the property;

+ Reduce the rent;

+ Replace the property or, if the leased property is beyond repair and the purpose of the lease is not able to be achieved as a result or if the property has defects which the lessee did not know of, the lessee may terminate unilaterally the performance of the contract and demand compensation for damage.

- Where a lessee demands repair but the lessor fails to repair in time or at all, provided that the lessee informs the lessor, the lessee has the right to repair personally the leased property and has the right to require the lessor to reimburse the costs of repair.

* Obligation to assure right of lessees to use property

- A lessor must assure the right of a lessee to uninterfered use of the property.

- In the event of a dispute as to the ownership rights with respect to leased property, which interferes with use of that property by the lessee, the lessee has the right to terminate unilaterally the performance of the contract and demand compensation for damage.

* Obligation to take care of leased property

- A lessee shall take care of leased property as if it were its own and shall carry out minor repairs and maintenance. If the lessee causes any loss of or damage to the property, it must compensate the lessor.

The lessee shall not be liable for normal wear and tear due to the use of the leased property.

- A lessee may, with the consent of the lessor, carry out repairs and improvements to leased property which increase its value and may require reimbursement from the lessor for reasonable costs incurred.

* Obligation to use leased property strictly in accordance with utility and purpose

- A lessee must use leased property strictly in accordance with its utility and the agreed purpose.

- Where a lessee fails to use leased property strictly in accordance with its utility and purpose, the lessor has the right to terminate unilaterally the performance of the contract and to demand compensation for damage.

* Payment of rent

- A lessee must pay rent in full and on time as agreed. If there is no agreement on the time for payment of rent, the time shall be determined in accordance with the customary practice at the place of payment. If it is not possible to determine the time of payment in accordance with such customary practice, the lessee must make payment when the lessee returns the leased property.

- Where the parties have agreed on payment of rent in instalments, if the lessee fails to make payment for three consecutive instalments, the lessor has the right to terminate unilaterally the performance of the lease contract, unless otherwise agreed or otherwise provided by law.

* Return of leased property

- A lessee must return leased property in the same condition in which it was received, normal wear and tear excepted, or in the condition agreed. If the value of the leased property has decreased in comparison with its condition at the time it was received, the lessor has the right to demand compensation for any damage, normal wear and tear excepted.

- Where leased property is moveable property, the place for returning the leased property shall be the place of residence or head office of the lessor, unless otherwise agreed.

- Where leased property is livestock, the lessee must return both the leased livestock and any offspring born during the term of the lease, unless otherwise agreed. The lessor must reimburse the lessee for expenses incurred in caring for the offspring.

- Where a lessee is late in returning leased property, the lessor has the right to require the lessee to return the leased property and to pay rent for the period of delay and the lessee must compensate for damage. The lessee must pay a penalty for the late return of the leased property if so agreed.

- The lessee must bear the risk in relation to the leased property during the period of delay.

Quoc Dat

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