When renting a house, the landlord usually requires the tenant to pay a security deposit to ensure the conclusion and performance of the lease contract in Vietnam. So, in the event that the landlord does not return the security deposit to the tenant, what actions will be taken?
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What are penalties for landlords who fail to return security deposits to tenants in Vietnam (Illustrative image)
A deposit is an amount of money or precious metal, gemstone, or other valuable item (deposit property) given by one party to the other for a period of time to secure the conclusion or performance of a contract under the law in Vietnam.
According to the provisions of Clause 2, Article 328 of the Civil Code 2015 of Vietnam, in the event that a contract is concluded and performed, the deposit property shall be returned to the depositor or deducted to perform the payment obligation. If the depositor refuses to conclude or perform the contract, the deposit property belongs to the recipient. Conversely, if the recipient refuses to conclude or perform the contract, they must return the deposit property and an amount equivalent to the value of the deposit property to the depositor.
Thus, according to the above regulations, a deposit is understood as money or precious metal, gemstone, or other valuable item that the depositor gives to the recipient to secure the conclusion and performance of a transaction contract. Therefore, to ensure the contract will be performed, the law specifically provides for the following cases regarding the deposit money between the two parties:
Case 1: The depositor refuses to conclude or perform the contract
In this case, if the tenant refuses to conclude or perform the contract, the landlord has the right to not return the deposit to the tenant, to compensate for potential losses the landlord might suffer, such as not being able to rent to others due to having signed the rental contract. Hence, the tenant will not receive the deposit back unless the two parties agreed otherwise on the return of the deposit in case the contract is not concluded or performed.
Case 2: The recipient refuses to conclude or perform the contract
If the landlord refuses to conclude or perform the rental contract or unilaterally terminates the rental contract, the landlord must return the deposit to the tenant. Additionally, the landlord must pay an amount equivalent to the deposit if the deposit contract does not stipulate the exemption of penalty for the tenant.
Case 3: The contract is concluded and performed according to the agreement
In the event that the contract is concluded and performed as agreed, the landlord will return the previously deposited amount to the tenant, or the deposit amount will be deducted to fulfill the rental payment obligation (if agreed by both parties).
It can be seen that the law does not clearly stipulate penalties in case the landlord does not return the deposit to the tenant but only regulates that whoever violates the rental contract conclusion or performance will lose the deposit. However, compared to the tenant, the landlord who refuses to conclude or perform the contract must also bear a penalty equivalent to the deposit value. Therefore, if the tenant does not violate the rental contract conclusion or performance, they have the right to request the landlord to return the deposit. In case the landlord does not return the money, the tenant can file a petition to the Court for resolution.
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