Guidance on payment of rent for public housing not serving residential purposes in Vietnam from October 15, 2024

Guidance on payment of rent for public housing not serving residential purposes in Vietnam from October 15, 2024 (Image from the Internet)

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 property not used for housing purposes, assigned to local housing management and business organizations for management and exploitation.

1. Guidance on payment of rent for public housing not serving residential purposes in Vietnam from October 15, 2024

According to the provisions of Clause 3, Article 16 of Decree 108/2024/ND-CP, the payment of rent and handling of violations of payment obligations for public property not used for housing purposes are as follows:

- Rent is paid quarterly before the 10th of the first month of that quarter and must be specified in the Lease Agreement, Lease Agreement Appendix. In case the organization or individual renting the house does not pay the rent on time, it shall be handled according to the provisions of Points b and c, Clause 3, Article 16 of Decree 108/2024/ND-CP.

- If more than 01 month has passed since the payment date specified in Point a, Clause 3, Article 16 of Decree 108/2024/ND-CP and the organization or individual renting the house does not pay or fully pay the rent, the housing management and business organization shall determine and collect the late payment interest according to the Lease Agreement; the late payment interest should be equivalent to the late payment interest applicable to state budget revenue managed by tax administration agencies as stipulated by tax management law.

- If more than 02 months have passed since the payment date specified in Point a, Clause 3, Article 16 of Decree 108/2024/ND-CP and the organization or individual renting the house does not pay or fully pay the rent, the housing management and business organization shall terminate the Lease Agreement and recover the rented house and land; the tenant is responsible for handing back the rented house and land to the housing management and business organization; the security deposit to ensure the tenant's obligations shall be used to pay the unpaid rent and late payment interest of the tenant. In this case, the organization or individual renting the house still has to pay the remaining unpaid rent and late payment interest (if any) after using the security deposit.

2. Principles for managing and exploiting Houses and Land Assigned to the Housing Management and Business Organization in Vietnam

The principles for managing, using, and exploiting houses and land assigned to the housing management and business organization in Vietnam are specified in Article 3 of Decree 108/2024/ND-CP, including:

- The management, use, and exploitation of houses and land must ensure efficiency, meet the needs for houses and land to serve the local economic and social development tasks; be public, transparent, and in compliance with the law.

- The assignment of houses and land to the housing management and business organization for management and exploitation is carried out by increasing the asset and the asset value is not counted as state capital in the enterprise.

- The housing management and business organization; organizations and individuals renting houses; agencies, organizations, and units temporarily allocated houses and land must fulfill their responsibilities as prescribed in Articles 28, 29, and 30 of Decree 108/2024/ND-CP.

- The management, use, and exploitation of houses and land must be subjected to supervision, inspection, and auditing as prescribed by law; any violations of the law on the management, use, and exploitation of houses and land must be promptly detected and strictly handled according to the law.

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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