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As an Expat renting an apartment in Vietnam: what are my risks and financial liability? 

Only buildings have compulsory insurance to purchase for ‘reconstruction costs’; so the owners are protected and get their property back.

As opposed to what Expat owners or tenants are used to in their home country,, they may consider that any rental property is insured. This can be a costly mistake in case of damage or death/disability.

Vietnamese landlord owners never insure their apartment

Forget whatever you know and think exists in your home country, home rental in Vietnam is based on the written agreement/contract between tenant and landlord/owner. 

You will need to check many contracts and write your own or with the protection of your broker agent. Don’t forget to put penalties and indemnity clauses for whatever you are afraid to lose. Even though laws are not protective, Vietnamese hate litigations as a big chunk of money will go to the lawyers or the judges pockets, sometimes well beyond your deposit.Real estate agents and landlords never explain you may need home insurance by pure ignorance as it is not compulsory to purchase as opposed to any developed country. Actually both owner and agents don’t want to add to your costs of renting and it is a tacit understanding that the tenant is responsible for anything happening in the apartment and to the neighbors or the building damages and injuries.

Is home apartment insurance compulsory in Vietnam?

Yes for building since the Carina building case in 2018, the law has been drafted and enforced to buy property insurance enough to repay for the reconstruction costs for the owners to recoup their money. The building will purchase compulsory construction insurance for the minimum value of reconstruction by law decree 23/2018/ND-CP .

No, for individuals there is no obligation to purchase insurance in case you are found responsible for a property damage or death and disability, you can self pay based on family request with or without legal court ruling.

Is the building management and insurance protecting tenants

In Vietnam, there is nothing more rosy than a rental property sold by a broker agent, the commission of 1-month is sometimes equivalent to 6-month yearly salary to them. What would you do if your position was reversed, she is the prospective tenant and you are the salesman -consultant is their wording-.The law requires the insurance for the property of the landlords to be repaid or rebuild so that no loss is incurred in case of damage by the owners.

Nevertheless, there is now law provision to repay for the death and bodily injury of other residents in the case of a damage caused by a faulty resident. If the building has not purchased a third party liability to cover for loss of life and disability of other residents in the building, then individual responsibility and liability is engaged. That is a limit of the law on compulsory insurance.

How can I be liable to repay damage costs

Your responsibility has to be proven by a court of the law or police investigation, then you become liable. Word of mouth, denunciation and gossip have no value. There are 3 possible cases of liability by you or your family members (usually included in the insurance) to a 3rd person -for property damage or bodily injuries- when living in an apartment or a villa: 

  • to your guests at home
  • to 3rd party strangers during your activities at home or outside within Vietnam
  • to your landlord or the building property

Your liability to guests at home

This is usually accidental breaking someone’s belongings or a home injury at the barbeque or the swimming pool. What we call home accidents

See also : Risks for an Expat Renting an Apartment in Vietnam

The 3rd party public property and injury

As our family participates in activities like school trips, social gatherings or holidays within your country of insurance and you cause damage. Some insurers will cover those cases in-country but sometimes extended to a short trip abroad for holidays or work. 

Tenant liability to landlord building or content property

Sometimes you rent and the equipment, fridge, stove or TV belongs to your landlord. The decoration and furniture as well may be not yours therefore you have a property and content’ to assume financial risk for any damage. It could also extend to reconstruction costs in case of fire or water leakages.

What are my risks and how to protect myself best

Expats in Vietnam hear stories of rogue landlords asking them to repay some damages by defective buildings and construction. Being forced to repay some costs due to floods or thunder strokes. Unfortunately whoever is ‘responsible’ when the landlord argues ‘it would not have happened if you were not living in my apartment’ is an argument quite difficult to counter.

If your responsibility is engaged to pay damage as per the court

You may argue and it is quite easy for a Vietnamese to lodge an official legal action at the local court and to win against an expat who don’t really know the local rules (of power and money), the language and judges tend to favor the Vietnamese over the Expat

Pay by law order or deduction of your deposit

The result may be that the court orders you to pay. If you stubbornly refuse the landlord can pay but in his mind this amount will come in deduction of your deposit anyway.

Emigration ban to exit Vietnam

Something most expats in Vietnam dont know is once a procedure for legal action is in progress under your name and passport number, you can not exit the country until the accusation and judgment outcome is completed and agreed by both parties. Anything pending may result in withdrawal of your passport or not authorized to quit Vietnam.

Conclusion: how to protect myself

All is contractual and anything written -not against the law- is acceptable in front of any lawyer, policeman or court of law. Therefore the initial contract you sign is very important and you can add disclaimers like the maximum liability or penalty the landlord agrees to ask you for.

Even better, a home insurance including a reasonable public liability with a foreign or Vietnamese insurer will back you up efficiently as insurers do know what is reasonable and local rules and practices. They are generally not abused by landlords because:

  • they deal with abusive claims almost daily
  • they are owned or dependent of the Ministry of Finance 
  • they can hire an army of lawyers to work on your case

Remember that the business laws in Vietnam are very new and bear low consumer protection, you can consider the lease contract you sign is the law, so read and amend to get peace-of-mind. Of course a reputable rental agent specialized in Expats will screen both tenant and landlord for a win-win agreement.

Read more on Home or Office insurance in Vietnam.

insurance in Asia

Not only health insurance is different but most general insurance: accident, life, home, travel, office or even car insurance will be different than your past experiences.