A rental contract sets out the rules landlords and tenants agree to follow in their rental relationship. It is not only a legal contract, but also an immensely practical document full of crucial business details.
Working on the rental contract terms are one of the most important steps in the renting process. Tenant themselves can hardly review all the terms correctly and make sure that they are fully protected against all cases. It’d be better if they have a decent agency who know all the possible cases that could happen and term the contract in the way that it is fair for both landlord and tenant.
Although there would be lots of things to look at in the rental contract, we will try to narrow it down to a few certain points to which you can pay more attention to in the next negotiation.
1) Protection against invalid landlord:
Making sure that the lessor (usually Party A) in the contract has all detailed information and, if possible, check their legal document for the property ownership. Just kindly ask for the documents and they will be happy to show you that they have all the rights to manage the house. Although this is usually ignored by most of the tenants, the contract is simply not valid if the lessor is not the legal owner of the property.
2) Protection against currency devaluation
Due to the fluctuations of Vietnam Dong (VND), house owners prefer to sign house contract with tenants in USD so that they would not suffer from VND devaluation.
Therefore, the advice for any foreigner before entering the lease contract is that make sure it’s legal in terms of currency used for payment. If the rent rate is already in VND, there’s nothing to worry about. If the rent rate is quoted in USD, make sure to check the selling rate announced on Vietnam State Bank (Techcombank or Vietcombank are also fine) and have it included as fixed rate in the contract.
3) Protection against liquidation of the property:
One of the most usual frustrations come from the decision of landlord to liquidize their property to the new owner. We have seen many tenants that had to move out of their house because new landlords want to make a big money out of their property.
So you better check with landlord if he/she has that intention in mind in the near future before signing the contract to ensure your stable stay during the contract. Otherwise, you can include a term to ensure your rental contract remains valid even after the property has changed its ownership.
4) Terms related to Breaking Contract
Those who haven’t read the first part of this series (landlord validity, currency devaluation, property liquidity) can check it out here. In this blog post, we will discuss about one of the issues that many people face when they rent an apartment in Vietnam. While there are many apartments that are designed for short stay from 1 night to several weeks or on monthly basis, majority of the rental options in the market only accept long term rent from 6 months to 1 year and more. As the normal practice of the market, tenant has to issue deposit (usually 1–2 month rent) to the landlord for long term contract and they don’t know how to get back their deposit if they want to leave their apartment in the middle of the contract.
Actually, there are many ways that you can do to protect your deposit when you want to break the contract (let’s assume that you don’t break any furniture because these fixing costs will be deducted from your deposit). I will give some suggestions that you can easily remember in your next negotiation:
Leaving with 1 month notice: negotiating the contract in the way that you can leave with 1 month notice in advanced. Usually, landlord of apartment and townhouse and villa won’t accept this. And if they don’t you can try to put a minimum time limit in the deal, something like after 9 months of staying I could move out with 1 month notice in advanced. This will properly increase your success rate of convincing landlord to accept the terms.
Leaving with a replacement: you can put in the contract the term that you can leave anytime during the contract if you can find a replacement for yourself. This term will be easily negotiated but some landlords may not accept it because they don’t want to handle the hassle of managing people out and in and all the work related to that. Landlord usually relies on agent to finish all these works, and it cost them money for that.
If you did not term some ways to exit the deposit in the middle of the contract duration, you can always ask landlord to get back the deposit when you want to move out. Although, most of landlords will decline the request, some of them may return 50% of the deposit for you if you already finish 70% of the contract. The better relationship you build with the landlord, the easier you can ask the deposit back with greater amount.