Breaking your lease contract – is it possible?

In the process of renting home in Saigon, there are many reasons to make the tenants would like to cancel the lease prior to the term. Below, Saigonflat will show you some notes for the lessor and the lessee in case of termination of the contract.

break the lease contract

For renters

Under the Consumer Protection Law (CPA), tenants will be allowed to terminate the contract and move away after 20 days notice in advance to the landlord. However, it does not mean that the tenant can leave easily.

The landlord has rights to require the tenant indemnify the cost during looking for a new tenants cause the lessor lost costs such as lost rental income, commission for agent, rent advertising, etc.

Some other notes that the landlord needs to keep in mind is that you will not be able to keep a deposit in case of the lessee has notified you in advance. Keeping a deposit  is illegal even if you have not yet found another tenant.

In addition, the 2005 Civil Law also specifies this issue as follows:

"Article 498.- Unilateral termination of performance of leasing contracts

1. The lessor shall have the right to unilaterally terminate the performance of lease contract when the Lessee has these follow acts:

a / Failing to pay rental for three consecutive months or more without plausible reasons;

b) Using houses for the wrong purposes;

c / Intentionally causing serious damage to houses;

d / Modifying, exchanging or renting the whole or part of the house to other persons without the written consent of the lessor

e) To cause disorder of the public many times and seriously affect the normal activities of the people around;

e) seriously affecting the environmental sanitation.

2. The lessee may unilaterally terminate the performance of the lease contract when the lessor has these follow acts:

a) Not to repair the house when the quality of the house is seriously reduced;

b) Rising rental fee unreasonably.

c / The right to use houses is restricted due to the interests of the third party.

3. The party who unilaterally terminates the performance of the lease must notify the other party one month in advance, unless otherwise agreed. "

According to this provision, the lessee also has the right to unilaterally terminate the lease contract before  expiration. However, this unilateral termination shall be effected only if one of the three conditions specified in Paragraph 2 of Article 498 is fulfilled and the obligation of advance notice provided for in Paragraph 3 of Article 498 of the 2005 Civil Law is fulfilled. If you fail to comply with these regulations, the lessor may claim damages under the terms of the contract.

For tenants

If the tenant rent flat for residential purpose, then being terminated by the landlord can make it difficult for the tenant to find a home.

If the lease is for individuals, families or businesses, being terminated before expiration would make some serious consequences. If the tenant invests large sums of money, the cost of several billions which is levied unilaterally by the lessor to terminate the contract ahead of expiration will cause the initial investment costs of the tenant not to be fully recovered or not collected. Meanwhile, compensation for breach of contract can not offset the loss of investment. At this point, the tenant will fall into misery.

To avoid this risk, you need to be aware of the compensation when terminate the contract before expiration. Make sure the amount of your compensation is the same with your investment amount.

If there is no specific provision in the lease agreement in which case the landlord will terminate the contract unilaterally, it will be based on the following rules.

Section 132 of the 2014 Housing Law provides for cases in which the landlord is entitled to unilaterally terminate the housing lease. In addition to this, the landlord is not allowed to unilaterally terminate the lease before expiration

Article 132.- Unilateral termination of performance of house-leasing contracts

1. During the lease term as agreed in the contract, the lessor shall not unilaterally terminate the lease contract and recover the leased house, except for the cases specified in Clause 2 of this Article.

2. The lessor may unilaterally terminate the performance of the house renting contract and recover the leased house in one of the following cases:

a / The lessors of State-owned or social-rented houses leased ultra vires or subjects not in accordance with the conditions prescribed in this Law;

b) The lessee does not pay the rental under the agreement for 3 months or more without plausible reasons;

c / The lessee uses houses for wrong purposes as agreed in the contract;

d / The tenant voluntarily demolishes, loosens, renovates or demolishes the leased houses;

e / The lessee transforms, lends or subleases the currently rented house without the lessor's agreement

e) The lessee causes disorder and environmental sanitation, seriously affecting the life of the surrounding people

g) Subject to the provisions of clause 2 of article 129 of this Law. "